Primary Factors Dominating the Development .& Changes
of a Metropolis
Qifan Wang
Jin Yin
School of Management, Fudan University,
Shanghai 200433, China
ABSTRACT
City grew, stagnated and then declined in the past two
centuries. This is a general pattern in history in our
world. Clearly, there must have been some powerful
factors at work. This paper tries to make an explanation
of such phenomena.
Primary forces behind economies of agglomeration and
urbanization and behind diseconomies of agglomeration
are explained and revealed.
Furthermore, in order to avoid such passage, some
principles and ways are explored by system dynamic
theory and modeling.
The development pattern of a metropolis is closely
related to its inner dynamic structure. Policymakers
should be well informed and adjust the structure
accordingly.
Developing new zones adjacent to a metropolis is an
effective way to pump the new life into the city.
Meanwhile, the coordination and equilibrium between the
new and the old areas should be appropriately arranged
and incorporated.
The paper makes a study of the macro relationship among
the flows of population, manpower, raw materials, funds
and information between two zones and the impact of
transportation problem on the whole city.
Taking an example of Shanghai, a megalopolis, a series
of policies for rebuilding up the fuctions of the city
are suggested.
I. Urban Dynamics
There exist major problems in central cities or
metropolises attracting many scholars and researchers.
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Books are published in 1960's, among which the famous
one was Urban Dynamics, written by Jay W. Forrester. It
disclosed the dynamics of metropolis, the inner
machanism of its development, its culmination and its
stagnation. There is no exception that the main
metropolises in U.S.A. all followed that mode, peaking
during the period of 1930 and 1950, then damping,
stagnating, and taking 150 years to the peak.
Statistical material also reveals the industry
production of these cities have similar modes.
Interestingly, the colapse in Shanghai, the biggest city
of China, began in the ealy 1980's. It almost take the
same mode of its development, although conditions are
different. However this coincidence indicates that there
must be some inner facts and causes that dominated this
movement. But what and where are they?
Gernerally speaking, the development of city originates
in its architecture. (Urban Dynamics- Forrester, ,:1969)
According to the principle of attractiveness, the
gradual improvement of the road, transportation,
housing and infrastructure and the growth of economy
attract more and more people to immigrate from the area
of high population density to low one. As people and
ecnomoy grows, jobs must be created, thus employment is
enlarged. This helps to build a city of certain economy,
politics and culture. However, the effect’ of this
agglomeration is bilateral, positive and negative. When
the agglomeration outranges its capacity, the negative
side takes dominant part. It leads the city toward
decline.
Shanghai just serves an example. It is now decling.
Here, we try to analyze its economic situation, industry
structure and population by System Dynamics (SD) theory
to find a new mechanism for its development.
II. Background of the Study
Shanghai is a modern city characterized in its industry.
Its GNP is 75 billion RMB and population density is 2013
persons per KMsquare in 1990. Shanghai took leading part
in its national industry before: 1980's. However, the
economic reform around the whole China deteriorate it on
account of its material and energy shortage. The main
problems shanghai now facing are:
1. It's tertiary industry has sustained a small portion
and a slow growth rate, making its metropolitan
function imcomplete and imperfect.
2. The superiority of leading industries in Shanghai is
decling. The competitiveness of Shanghai's products is
weakening in both the domestic and international
markets.
3. The provision of raw material and energy for industry
in shanghai is not regular.
Several investigation are made in order to find a
solution. We agreed with that one way to get rid of the
city's problems is to rebuild the whole Shanghai by
developing its eastern area and adjusting the
unreasonable structure in the .western part. The
following questions are being explored:
1. How to transform an industry concentrated city into a
multifunction metropolis, i.e. as a financial center,
trade center and information center?
2. How to change the strategy to cope with the situation
which requires broad regional cooperation and more
efficient international transaction?
3. How to. coordinate the development of western and
eastern part of Shanghai?
III. The Structure of the Model
In order to reveal the relation between the weatern and
eastern part of Shangahai, we devide the model into two
parts respectively, each consisting of subsystem of
trasportation, population and production etc. The
general structure are shown in Figurre 1.
GNP is the main index reflecting the economy. It is the
sum: of three industries. (1st industry: agriculture,
2nd: light industry, textile, machinery, electronic
industry, etc. 3rd (tertiary industry): commerce,
finance, service industry, etc.) The general trend of
GNP from 1988 to 2018. is provided in Figure 2.
The production closely relates to the transportation,
raw material and energy supply. The production increase
gives rise to extra demand of transportation imposing
greater stress on transportation. So does it do to the
raw material and energy supply. If the economic
structure of Shanghai remains unchanged, then the demand
structure of raw material and energy supply will be
unchanged and the contradiction of demand and supply
will become much more severely imbalanced, constituting
a negative effect on the production. That is why there
is a damping in about 2003 in Figure 2.
Population is another crucial factor in the urban
development. From the simulation, the population in
Shanghai will rise from 105.4 million in 1988 to 115.0
million in 2000, among which 19.79 million in the
eastern area while 75.23 million in the western band. If
we don't foresee the potential problem in the population
increase, we will face the serious population explosion
later.
The above situation analysis encourages us to take some
policy tests in the model to search for the dynamic in
urban development.
IV. Policy Tésts
1. Comparison Tests of Different Investment Ratio: .
We assume that the unit capital output value of the
tertiary industry is higher than that of the second.’ We
differenciate the ratio between these two industries to
find a maximum value of GNP.The comparitive tests are
shown below:
Table 1. Results of policy test of investment ratio
between second an tertiary industry
According to the above value, we are able to draw a
curve reflecting the relationship between the investment
ratio and GNP in Figure 3.
It is clear that the about equal ratio between second
and tertiary industries is a better combination to bring
a higher GNP. Because the excessive input’ in second
industry will increase the demand. of transportation
which inversely inhibits production when its capacity is
exhausted. But the situation in the tertiary industry
case than the former.
2. The Investement Allocation between the Western and
Eastern Areas
We have tested the investment allocation between the
western and eastern parts. We draw the conclusion that
we should put stress on the development of finance,
commercial and service industry in the eastern area in
order to turn Shanghai into a multifunction, open and
modern wmetrpolis. (please refer to the following
simulated results in Table 2.)
Table 2. Results of investment allocation between
western and eastern part
2nd Indusry 3rd Indusry GNP
in GNP (1) in GNP (2)
Value % Value % Value %
1018.7
35.2 1189.1
29.7 1193.9
* GNP is the sum of (1), (2) and GNP of agriculture
3. Search for the Dominant Industries
We observed the changes in GNP by replacing the dominant
and non-dominant industries in the model. Finally, we
obtain that the dominant industries in Shanghai at
present should be light industry, chemical, machinery
and electronic industries.
4. Comprehensive Test
We made a comprehensive study of the above tests and
simulated the model according to the following
conditions:
1) Assume the investment ratio between second and third
industry is 0.5:0.45.
2) Assume the allocation of the fund between western and
eastern part is 0.85:0.15.
3) Assume the transportation capacity increases 20%
The sharp damping around 2003 in Figure 2. has been
moved out. Refer to Figure 4. The optimal GNP in the
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comprehensive test is 156.8 billion RMB. The tendency of
GNP is shown in Figure 4.
Iv. The Improvement of the Model
In reality, it is impossible for a country to have its
demand and supply absolutely balanced in every
department of its industries. On the contrary, there is
real stock in almost every department. And there is
without exception for China. For this reason, we
modified the model by introducing inventories into the
model shown in Figure 5:
The results with inventories and without inventories are
compared in Table 3.
Table 3. Comparison of GNP between with and without
inventories
GNP(billion) 1988 1991 1994 1997
With Inventory 66.55 78.64 95.75 126.8 153.5
Without’ Inventory 66.55 83.3 105.9 141.0 163.3
By comparison, we conclude that the modified model is
more realistic.
VI. Conclusions
From the above analyse, we hold that the urban
development is closely related to its economy, culture
and policy. Every metropolis should settle its backbone
industries according to its inner characteristics.
Moreover, developing the areas adjacent to the
metropolis is an effective way to pump the new vigor
into the city.
To modernize. Shanghai into a multifunctional, open and
central city in China, we should develop tertiary
industry by appropriate allocation of fund between its
western and eastern parts. Adjusting the industral
structure is another way to help reach our goal.
VI. References
1. Wang, Qifan. 1988. System Dynamics. Tsinghua
University Press.
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2. Wang, Qifan. 1987. et al. The Theory and Application
of System Dynamics. New Times Press.
3. Forrester, Jay W. 1969. Urban Dynamic. MIT Press.
4. Statistics Almanac of Shanghai. 1987-1990.
VII. Appendix
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TRANSPORTATION
PRODUCTION PRODUCTION
GNPE
: TECHNOLOGY
POPULATION }— POPULATION
Figure.1. Block diagram of the model
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Figure. 2. GNP development tendency
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Figure. 3. The relationship between
investment ratio and GNP
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Figure 4. The GNP tendency of comprehensive simulation
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Consumption Rate
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Figure. 5. The flow diagram of improved model
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