Overview On Shanghai

Commonwealth Bank Australia, Shanghai

1. Sketch of Shanghai

Shanghai, one of the municipalities directly under the Central Government, views Yangtze River in the north, faces East Sea in the east, overlooks the Hangzhou Bay in the south and has two neighboring provinces, Jiangsu and Zhejiang, in the west. Situated at the east end of the yangtze Delta where China’s golden water course (Yangtze River) and China’s golden seacoast (East Seacoast) intersect, Shanghai enjoys a convenient transportation, wide and open hinterland and advantageous geographical location. Covering a total area of 6,340.5 square kilometers, Shanghai witnesses about 100 kilometers in the distance between the east and west and about 120 kilometers between the north and south.

2. Improvement in the investment climate of Shanghai

Rapid growth of national economy

Freed from the predicament of being stagnant and slow-growing, Shanghai’s national economy has boosted since 1992, the year which saw a 14.8% increase over 1991 in terms of national output value. Despite of Asian crisis in 1997, Shanghai has been immune from the flue and enjoyed 2-digit growth rate over the past two years. With a sustained momentum of rapid development, Shanghai’s overall economic strength has been substantially reinforced. Through years of adjustment, there have been strategic changes in Shanghai’s economic structure: the share of the tertiary industry in GDP has gone up from 31.8% to 40% around and become the focus of economic development. The development of the secondary industry has also shifted its reliance on the traditional industries (textile, light industry, etc.) to the newly developed pillar industries and hi-tech industries. Hence the six pillar industries (automobile, electronic information facilities, complete equipment for power plants, petroleum and fine chemicals, iron and steel, and home appliances) have a surprising growth, accounting for more than 50% of the city’s total industrial output value.

Important changes in the image of the city

The congestion by which Shanghai has been long perplexed is being eased with the initial formation of three-dimensional traffic network through the construction of Yanpu Bridge, Nanpu Bridge, under-river tunnels, inner-ring viaduct, No.1 underground railway and many overpasses. Via leasing out pieces of land, a new way has been found to transform the old town. Modern commercial buildings, guest houses and hotels, office buildings have arisen from the horizon, delineating a graceful international metropolis. The working and living environment has been changing greatly. In Pudong (Eastern Shanghai), the greenery area has account for 40 percent of total area.

Deepening reform of economic system

Having set up more than 580 various primary markets, 17 regional markets and 8 state-level markets, Shanghai witnesses an initial formation of a market system with state-level markets as its head, regional markets as its backbone and primary markets as its base. The function of Shanghai as a financial center has been gradually strengthened. The total turnover of securities, foreign exchange, etc. reached more than RMB 3000 billion. The domestic and foreign financial institutions in Shanghai increased from more than 70 before 1992 to more than 1000. Some foreign banks, Hongkong & Shanghai Bank Corporation for example, have move their regional headquarter to Shanghai. China Foreign Trading Center, located at the Bund of Shanghai, has shouldered the task of making public the quotations of foreign exchanges in China on each trading day. Shanghai Branch of People’ Bank of China (Central Bank) has been authorized to be in change of regional financial institutions including Shanghai, Zhejiang, Jiangsu and Fujian provinces where are the most dynamic area of China’s economic development. Shanghai is becoming a market where the flows of funds, commodities, information and personnel from other areas of the country and even abroad meet and is playing the key role in allocating the resources. The state-level large and medium-sized enterprises have reaped first fruits in the transformation of operating mechanism.

Expanding opening to the inside and outside worlds

With a comprehensive opening to the world, Shanghai has become an area which attracts large sums of domestic and overseas investment. The foreign investment items reached a high rate of success over 95% and more than 80% of the foreign enterprises that have begun their operation gain profit. Shanghai’s import and export are also ever increasing. Its export has been growing synchronously with GDP for years running, and predictable to reach USD 15 billion in 1998, an increase of 2-digit rate against the period of early 1990s.

New stage in the development of Pudong

The Chinese government made a strategic decision to develop and open up the Pudong New Area of Shanghai in April 1990. Pudong is therefore playing a role known as the dragon head in the economic revitalization of the Yangze River basin. History has pushed Pudong development to front-line of China’s reform and opening up in the 1990s and it has become the focus of China’s economic development. Giving priorities to the development of infrastructure, finance, trade and hi-tech industries, pudong, a land full of promise, is approaching the harvest festival after 8-year-development.Among global top 100 industrial companies, more than half have rooted or been rooting in Pudong. Shanghai General Motor, with total investment of USD 1.52 billion, will come to production at the end of 1998 after surprised two-year-construction. In accordance with the principle of "overall planning, starting of the development of subzones and keeping the development rolling", the four key subzones of Lujiazui Financial and Trade Zone, Jigqiao Export Processing Zone, Waigaoqiao Free Trade Zone and Zhangjiang High-tech Park which started development earlier, are in full swing of development and have achieved substantial progress. IBM, Intel, HP, GM, Bosch, Sharp, Sony, Roche, Allied-Signal...have announced their long-term commitment to China and taken solid steps in Pudong.

Shanghai has been the window of China’s economic development. Focus on Shanghai, feel the pulse of Chinese economy.

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