1. Project Summary and Relationship to China's Agenda 21 This project of the Xinfan satellite town of Chengdu city aims to strengthen the Townís own capacity of sustainable development. It plans to establish a green production base, an industrial park of clean production with intensive technology and introduce new building materials. These works will improve the living environment and optimise the industrial structure of the suburban area. In addition, the project aims to protect the historical relics and the endangered species in the area. The satellite town will make efficient use of excessive rural labour and promote sustainable development by incorporation of population, resources and environment. This project is based on programme areas of 10A, 10B, 11C and 11G of China's Agenda 21, and is related to programme areas of 6C, 7C, 10C, 12B and 15A.

2. Background Sichuan province has a total population of 118 million, ranking first in all provinces in China. The total rural population in Sichuan is over 93 million, among which more than 50 million are rural labourers. However, the surplus rural labourers are 25 million, comprising 50% of the total. The farmland per capita is decreasing and urbanisation is increasing. Xinfan is situated at the junction of the rural areas and Chengdu city. As a result, it faces serious population and labour force problems. Xinfan Town is located 20 kilometres Northwest of Chengdu city and is 35 kilometres from the Shuangliu International Airport. It is the crossing point of the Chengdu-Pengzhou highway and the Xindu-Pi county highway. It has a total area of 45.67 sq. kliometres and a population of 55,800, in which 35,800 live in the rural areas. Farmland per capita is 500 square meters. The urban area has 2.8 sq. kliometres with 20,000 dwellers. Its GDP was RMB 320 million in 1995 at the 1990 price. The township enterprises produced RMB 130 million in the same year. This resulted in an average per capita income of RMB 1,800, which lays a good foundation for development. Xinfan is a cultural town with 3,000 years of history. The East Lake Park is in the western part of the town. It is a well-preserved garden that was built in the Tang Dynasty. Rare egrets stay in this garden from May to September every year. Establishment of satellite towns is the solution for large cities like Chengdu to deal with pressures from population, environment and development. Satellite towns can be the centres for secondary industries, which will create more job opportunities. As a result, they will attract residents from large cities to relieve their population pressure. However, the city needs to take the following measures to enhance the sustainable development of the city: (1) Enhancing a managerial system and training program. This will develop human resources comprehensively; (2) Utilising resources rationally, optimising the industrial structure and creating job opportunities; (3) Improving human residential environments and protecting the historical and cultural relics of Tang Dynasty. Chengduís Ninth Five-Year Plan and the Long-term Targets for the Year 2010 has listed Xinfan as one of eight satellite towns in its suburbs. The county also listed Xinfan Town and Sichuan Xinxing High Technology Industrial Park as the one of the three key towns and areas for development. It will become a model for effective agriculture production, modernisation of suburbs and reducing population growth of the metropolitans areas. Xinfan has devoted its efforts to building infrastructures and protecting the environment in the process of economic development. It has been listed by the State Planning Commission and Sichuan province as the pilot town for economic development. In recent years, the town has invested more than RMB 40 million annually in infrastructure construction. A computer-controlled telephone switching system with 30,000 channels and a 110,000 volt power transformer are already in operation. Furthermore, the city now can provide 150,000 cubic meters of natural gas to its residents every day. These infrastructure enhancements have improved the investment environment remarkably. Xinfan now has 300 technicians, or 6 technicians in every 1,000 residents. Xinxing Group Company, the core enterprise of Xinfan Town, is qualified as a State Grade II enterprise. Its total asset reached RMB 280 million and has 13 factories including 3 joint ventures.

3. Objectives

3.1 Long-term Objective Xinfan Town is to be transformed into a reasonably-sized satellite town with a balanced industrial structure. It will have sufficient infrastructures and a convenient transportation system. These will be the foundation for providing more job opportunities and improving the living environment.

3.2 Immediate Objectives * To adjust and revise the medium-and-long-term plan for development. The revision will ensure continuous education and strengthen the capacity building; * To optimise industrial structure, the town will focus on establishing green production bases and developing an industrial park of cleaner production with intensive technology. The reform will utilise the labour force more efficiently; * To protect historical and cultural relics of the Tang Dynasty and to construct affluent housing to improve the living environment of the area.

4. Outputs and Activities

4.1 Revision of the medium-and-long-term plans and establishment of a modern management and training system. * To revise the Xinfan Townís Ninth Five-Year Plan and the Long-term Targets for the Year 2010 according to the sustainable development principles. In addition, the overall planning strategy of the town will be revised with reference to foreign experience in satellite town planning; * To establish a database for the townís administration. The database will consist of data on and images of the townís population, economy, environment and information; * To establish a training center for township entrepreneurs in Southwest China; * To compile a set of case studies for training managers and technicians of the Southwestís township enterprises. Monitoring Indicators: Revised Townís Ninth Five-Year Plan and the Long-term Targets for the Year 2010; Overall Planning Strategy of the Town; Database for town management and relevant regulations and documents; establishment of the training center of 10,000 square meters; a set of practical case study materials; and training of 500 managerial and technical staff every year. Implementing Agencies: Xinfan Township Government, Xinxing Group Company

Time Schedule: June 1996 - December 2000

4.2 Establishment of green production bases and an industrial park of cleaner production with intensive technology. * To establish green production bases, including a flower farm and Xindu Orange Farm; The project also plans to expand the Xinfan pickle vegetables export base. In addition, a pig farm and a biological pesticide factory will be built; * To establish an industrial park of clean production with intensive technology. The park will consist of plants that produce high-resolution colour monitors, computer keyboards; type 1250 offset printers; and modern home and office furniture; * To introduce new building materials to an existing plant. It will produce type 80 steel frames of windows and doors. Furthermore, the plant will expand production lines of galvanised steel with new technology. Monitoring Indicators: Completion of the flower farm with 13.5 hectares and Xindu Orange farm with 68 hectares; completion of pickle vegetables production base of 10,000 tons per year on 135 hectares; production of 100,000 pieces of high-resolution colour monitors per year; production of 200,000 pieces of computer keyboards per year; production of type 80 steel window/door frames, 10,000 tons per year; production of new-type galvanised steel tubes 120,000 tons per year. Implementing Agencies: Xinfan Township Government, Xinxing Group Company, Xinfan Pickle Factory, Chenglong Company

Time Schedule: June 1997 - December 2005

4.3 Protect the historical relics of Tang Dynasty and improve the living environment * To protect the historical and cultural relics of the Tang Dynasty as well as the environment for rare egrets' breeding and living areas; * To construct demonstration blocks of affluent housing. Monitoring Indicators: Maintenance of more than 10 Tang-Dynasty historical and cultural sites, including East Lake Park and Longzang Temple; completion of demonstration blocks of 100,000 square meters of affluent housing. Implementing Agency: Xinfan Township Government

Time Schedule: June 1996 - December 2005

5. Inputs

5.1 Chinese Inputs The local communities will be the main contributors to this project. The municipal government will try to obtain grant and loans from the central government. It will also look for investments for the project that will provide economic returns.

5.2 International Inputs The government hopes to obtain bilateral and multi-lateral aid and technical support for those sustainable development activities. As in the Chinese input, the government wish to co-operate with foreign investors in the project that will provide economic returns. The form of investment can be 100% foreign investment, joint ventures and BOT. In addition, the government would also like to obtain loans from international institutions and foreign governments.

5.3 Budget The total capital needed for this project is US$ 60 million, among which, the Chinese side will raise US$ 36 million from domestic sources, while foreign aid and investment will cover the other US$ 24 million.

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Table 1. Budget by Item (in million US dollars)

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Table 2. Budget by Output (in million US dollars)

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6. Benefits It is projected that in 2010, the GDP of Xinfan Town will reach RMB 2 billion at the 1990 price. After restructuring, the ratio of the primary, secondary and tertiary industries will be 3%, 55% and 42% respectively. The average net income per capita will amount RMB 11,243. The township enterprises which will be led by Xinxing Group, will actively promote technology-intensive industry with clean production. These enterprises will head towards high-tech, large scale and export oriented direction. They will employ 10,000 rural labourers in the area. As a result, the Xinfan Town will become a new-typed developed satellite city .

7. Risks Governments of Chengdu city, Xindu county and Xinfan Town will provide economic incentives to attract investments. In case that funds for the project are not available from the above-mentioned channels, the implementing agencies will try to raise funds for the project through other channels, such as bank loans and foreign investment, to ensure a smooth process of the project.

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