1) To what extent has Shanghai followed the development strategy of Singapore?

2) Has foreign direct investment been important for Shanghai's development?

3) How has China's entry into the WTO in 2001 influenced the development of Shanghai?

4) Assess the role of the Chinese coastal area in the economic development of China.

Use Shanghai as a case study.

http://www.sfisc.com/en/shgk.asp

See Special Economic Zones
http://en.wikipedia.org/wiki/Shenzhen
http://en.wikipedia.org/wiki/Guangdong

For background information on China see http://news.bbc.co.uk/2/hi/in_depth/asia_pacific/2004/china/default.stm

Shanghai Overview

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The word "Shang Hai" is literally translated to "above the sea" as the city of Shanghai was built 500 years ago on the bank of the Yangtze River Delta, with East Sea in the east and Hangzhou delta in the south. Shanghai summers are hot and humid with temperatures reaching 40 degrees Celsius. The rainy season begins in June. Fall is mostly mild. In winter (January to February) temperatures can reach below freezing. Spring begins again in March.

Housing a population of over 16 million at present, it was once a small town supported by fishing and weaving before the first Opium War. Late in 1990, the central government started developing the area, and Shanghai has since become the well-known booming metropolis city.

A first sight at Shanghai is an overwhelming impression of towering skyscrapers and the sheer number of bicycles. Shanghai story usually begins at the Bund, where many buildings constructed in various foreign styles are well preserved. Western tourists will feel a sense of familiarity when strolling around the long street, which resembles those in European cities. This blending of eastern and western styles has given the Bund a reputation as a "World's Fair of Architecture." A visit to the Old City section gives an overview to buildings of the 1920s and 1930s style. A good collection is displayed in Yu Garden, a well-restored Suzhou-style garden created during the Ming Dynasty. The garden is immensely popular with local residents and visiting Chinese. Jade Buddha Temple in northwest is the most popular Buddhist temple in Shanghai, drawing both worshippers and tourists.

Pudong, the east side area of the Huangpu river, has been transformed from farmland to mega-metropolis. The Oriental Pearl TV Tower, with a giddy height of 468 meters, stands as the world's third tallest TV tower and has become the new symbol of Shanghai. The 88-floor Jin Mao Mansion is another outstanding building in the Pudong New Area. Because of its brightly illuminated skyscrapers, Shanghai enjoys international fame as the "Pearl of the Orient".

Economic Development

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Incredibly crowded, densely packed, Shanghai is the biggest port and the center of technique, trade, finance, information and culture in China. With energy and confidence, Shanghai is having new dreams. The polluted rivers are being cleaned up and greenways and new parks are emerging. Historic neighborhoods, both Chinese and colonial, are being spared the bulldozer and transformed into avenues of shops and cafes. New theaters and cultural centers are attracting top performers from China and abroad.

Shanghai plays an important role in China's social and economic development. With a population of 16 million, Shanghai contributes 1/12 of China's total industrial output value, 1/6 of China's port cargo handling volume, 1/4 of China's total exports and 1/8 of China's financial revenue. In 2003, Shanghai's GDP reached 622.8 billion RMB (equivalent 75.31 billion USD) up around 90 times over that of 1952 according to the comparable prices. The average annual growth rate became double digit during the last several decades and hit 11.8% last year.

In 1952, Shanghai's average per capita GDP was only 430 Yuan (equivalent USD 52). In 1978, it reached 2,498 Yuan (USD 302), surpassed 10,000 Yuan (USD 1,209.2) for the first time in 1990 and soared to 34,600 Yuan or 4,180 USD in 2000.

Shanghai has long been a major textile manufacturer, producing material for China's domestic fashion industry. It is also China's second largest iron and steel producer and a major refining centre for copper, lead, and zinc. An oil refinery supplies materials for the city's petrochemical and synthetic fibre industries. Chemicals, plastics, cars, pharmaceuticals, electrical appliances, and fertilizers are also produced, in addition to paper, agricultural machinery, precision instruments, and shipbuilding. Other industries include vegetable oil milling and oil refining.

Foreign capital has been floating to this booming city since it began overall reforms over a decade ago. Up to the end of last year, Shanghai had received 31,440 foreign invested projects, total value of which amounted to over 73 billion USD.

Shanghai's well-deserved reputation as China's commercial capital has grown faster in recent years as infrastructure development has resulted in vastly improved transportation (including new highways, bridges, tunnels, subway lines, a new international airport and increased port capacity). Business centers in Puxi have continued to be a magnet to foreign executives overseeing their operations in China, and the Lujiazui financial district in Pudong is home to China's largest stock exchange¡ªthe Shanghai Stock Exchange. The newly built magnetic levitation train enhances Shanghai's stature as a world class business center.

Role of specialised industrial parks

The automobile & auto parts manufacturing park in Shanghai International Automobile City
Shanghai Auto Parts Global Sourcing Center provides the manufacturing park an interface between home and abroad, which expands the potential market. The manufacturing park is a key base of the auto sedan and spare parts in China. About 100 enterprises from more than 10 countries and regions such as Germany, U.S, Japan, Singapore and Taiwan have already settled down.

II Main functions of Shanghai Auto Parts Global Sourcing Center
Main functions：
Exhibition:a key factor of modern and advanced sourcing modes
Trading: to meet the requirements of auto parts vastitude sourcing
Information: data base of resources for trading and exhibition development Other functions:
Commerce: facilities to support the commercial activities
Finance: an essential part of the modern and advanced sourcing mode
Service: to provide clients with completed services

III Advantages of the project
＊The goal of Shanghai municipal government: make the city an International merchandising base within 5 years. The project is one important part of this development strategy.
＊Supported by Shanghai municipal government, Jiading local government, China Association of Automobil Manufacturers and other institutes.
＊Based on the global platform of Shanghai International Automobile City.
＊Get orders from big overseas manufacturers by the professional capabilities.
＊Test and verify the members for their prestiges and capabilities and ensure the members' professions and top brands.

http://www.smudc.com/en/ground/changfang.htm

FDI by Shanghai multinationals

MG Rover-SAIC Incompleted Negotiation

In August 2004, it was learned that SAIC was in talks to buy Britain's MG Rover Group. In November, it was announced that SAIC could take a 70% stake in a joint venture company shared with MG Rover in return for its £1 billion investment.

In March 2005, Shanghai Automotive Industry Corporation (SAIC) and Nanjing Automobile Corporation (NAC) announced their intentions of acquiring 50% and 20% shares of MG Rover respectively.

However, in April 2005, it emerged that SAIC would not proceed with the MG Rover deal, after concerns about the British automaker's financial stability. This news sent MG Rover into administration.

SAIC had claimed that it had already acquired Intellectual Property Rights in some Rover products for £67 million in the autumn of 2004, including the Rover 25, the Rover 75 and the Rover Powertrain K-series engine, but the Administrators advised that there was still interest in saving some other parts of the company, including MG, and Friday, May 13, 2005 was set as the deadline for bids from potential investors.

In June 2005, it emerged that SAIC held the rights to the MG TF sports car. Commentators in the British media claimed that the rights were transferred by its former owner, MG Rover, to SAIC accidentally.

SAIC bid for MG Rover assets but on July 22nd 2005, the Nanjing Automobile Corporation purchased the British Group for £53 million.

Having bought the rights to a number of Rover models, the group tried to purchase the Rover name from BMW Group for £11m, but this bid also failed and the Rover brand eventually went to the Ford Motor Company Inc. of the USA after its exercised its right over the name following its purchase of Land Rover in 2000.

The company has plans to release an updated version of the Rover 75 under the Lu-sheng 75 ('Road-Splendor' 75) name, under the main brand name of Roewe.

http://en.wikipedia.org/wiki/Shanghai_Automotive_Industry_Corporation

Importance of the Port

http://www.atimes.com/atimes/China_Business/HA07Cb02.html

Asian Times 07/01/2006

Shanghai now the world's largest cargo port

SHANGHAI - Shanghai port has become the world's largest cargo port, with processed cargo topping 443 million tons in 2005, higher than that of Singapore's port, according to the latest statistics of the Shanghai Port Management Department.

The rapid development of the Chinese economy and the large industrial and trade base of the Yangtze River Delta region are the main reasons underlining Shanghai's achievement. It only took

Shanghai port five years to double cargo handling capacity from 200 million tons to 400 million tons.

However, there is still a big gap between Shanghai and Singapore in container handling capacity. The latest statistics show that Shanghai handled 18.09 million TEUs (twenty-foot equivalent units) of containers in 2005, rising 24.2% over the previous year and taking the third position in the world. In contrast, Singapore handled 21.2 million TEUs in the first 11 months of 2005, rising 8.4%. In terms of growth rate, the container handling capacity of Shanghai grew much faster than that of Singapore.

The economic development of Shanghai, the Yangtze River delta and Yangtze River valley has also fueled the development of Shanghai port. At present, Shanghai has opened shipping lines around the globe, extending to Europe, America, Australia, Japan and Southeast Asia. The number of voyages mounted from the port amounts to 1,967 monthly, including 942 to international ports.

Development of Commerce and Financial Centres

http://www.shanghai.gov.cn/shanghai/node8059/BasicFacts/Infrastructure/userobject22ai22013.html

Lujiazhui Financial and Trade Zone has enjoyed increasing number of financial institutions, and a modern service system has been established . By the end of 2005, a total of 360 Chinese and foreign financial institutions had started operation in this zone. A number of world multinational corporations, such as Citibank’s Asia-Pacific headquarters, Pacific Insurance, UPS, Siemens and Wal-Mart, and some of China's largest corporations have moved their headquarters to Lujiazhui. Its function as venues for conference, exhibition, tourism and commercial space leasing further expanded. In the year, 1,420 major meetings, including more than 180 international ones, were held in the zone. By the end of 2005, there were ## skyscrapers either completed or under construction in the district, with an occupancy rate of 92.5%.

Growth into the periphery

Growth is being directed away from Shanghai because of the increasing congestion in that city, as more companies are locating industries in places like Suzhou and Hangzhou. Suzhou is located about 90 kilometers west of Shanghai and Hangzhou is located 180 kilometers southwest of Shanghai.

Both Suzhou and Hangzhou are populated by about six million people with about one million or so living in the central core and each city is quickly upgrading its road network to cope with rising transportation demand.

The centre of Suzhou, known as the Oriental Venice with its famous gardens and nine-story pagoda, is listed by the United Nations as a World Heritage site. However, two new industrial parks located adjacent to this centre have forced the city to build a “motorway” to link the two parks. But in doing so, a large Right-of-Way was built directly through the cherished city centre, creating opposition from groups wanting to protect their special cultural heritage. While the necessity to link these parks was great, Vice-Mayor Du Gou-Ling vowed that no further intrusions will be allowed through the historical centre.

Hangzhou is regarded as the “Paradise Silicon Valley” where in 1990, the Hangzhou Hi-tech Industry Development Zone was established. It is dedicated to the commercialization, industrialization and internationalization of scientific and technological achievements to transfer high technology into direct productive forces. Its industries include: micro-electronic information, biomedicine, new materials, optical-mechanical-electrical integration, computer technology, and software. The success of this venture has brought substantial economic benefits to Hangzhou.

Hangzhou is so well regarded in Asia, that the city has been named as the best place to do business according to the Forbes China Report. However, its growing economic success has also increased pressure on its urban transportation infrastructure, forcing the city to expand the road network. Predictably in Hangzhou, there are similar environmental and heritage concerns about expanding the road network. www.magplane.com/html/word/Hangzhou%20September%20(3.1).doc

Plans for development

Shanghai: an opening-up and modernizing city

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Speech by Ms. Yang Dinghua, Secretary General of Shanghai Municipal People's Government (2006/04/17)

India, April 11, 2006

China and India are close neighbors with increasing trade and economic exchange. Last year, the bi-lateral trade between China and India stood at $18.7 billion, up by nearly 40% over last year. It's projected that the bi-lateral trade this year will exceed $20 billion. In this context, Shanghai's economic and trade exchange with India has also grown rapidly. Last year, the import and export between Shanghai and India reached $1.7 billion, an increase of 37% over last year. As of the end of 2005, India had 28 investment projects in Shanghai with contractual value of $25 million, covering sectors such as software, information and biology. We are delighted to see that the Sino-Indian relations have entered a brand new stage featuring overall development.

Today, senior officials from the government, entrepreneurs and scholars come together to have extensive and in-depth discussions of urban construction and economic development at this forum, which is a very important platform as well as a very good opportunity for us to promote communication and cooperation and benefit from each other's strength. I would like to avail myself of this opportunity to make a presentation on Shanghai's latest development.

Shanghai is an international megacity with a permanent population of 18 million. Shanghai is also an economic center, holding a very important position in the national economy. Since China adopted its reform and opening-up policies, in particular, after the central government made the decision to carry out pilot reforms and opening-up measures in Pudong, Shanghai has ushered in a new period and scored enormous achievements in its modernization drive, becoming an epitome of China's rapid socio-economic development.

Shanghai has realized sustained, smooth and relative fast socio-economic development. Since 1992, Shanghai's GDP has been growing at a double-digit speed for 14 consecutive years. The GDP of Shanghai in 2005 reached $11 billion. With rapid economic development, the social undertakings including science and technology, education, culture, public health and sports also made great progress. As a result, the living standards and quality of the Shanghai people have improved significantly. Now, the per capita floor area of urban residents reached 25M2, and the average life expectancy is 80 years old.

Shanghai stands at the forefront of China's reform and opening up. By the end of 2005, Shanghai has attracted more than 40,000 foreign-invested companies and received actualized Foreign Direct Investment (FDI) of nearly $60 billion. 430 out of the Fortune Global 500 have established presence in Shanghai. More than 400 regional headquarters of the multinational companies (MNCs), investment companies and R&D centers are now in Shanghai. What's more, Shanghai has successfully hosted many international conferences, such as the APEC meeting and the Fortune Global Forum. In December 2002, Shanghai won the bid to host the 2010 World Expo.

Shanghai is transforming from an industrial and commercial city to an economic center of China. Shanghai hosts a number of national-level factors market including securities, foreign exchange, gold, futures, IPR, technology and human resources, making Shanghai an economic center of China. The volume of tradable securities of Shanghai Stock Exchange (SSE) accounts for nearly 80% of the national total, and the volume of the futures market 50% of the national total. Shanghai also hosts the largest number of foreign-invested financial institutions in China. As of the end of 2005, there were more than 300 foreign-invested and Joint Venture financial organizations.

Shanghai has strengthened its position as a trading port and boosted its shipping capacity. Shanghai is the biggest port in China. As a shipping center, Shanghai's capacity has been constantly enhanced. In 2005, Shanghai handled foreign trade worth $350 billion, up by 24.1% over last year, accounting for more than a quarter of the national total. The cargo throughput reached 443 million tons, up by 16.9% over last year, becoming the world's largest port. The container throughput of Shanghai reached 18 million TEUs, 3.5 million more TEUs than last year, remaining the third largest container terminal. Meanwhile, the Pudong and Hongqiao airports of Shanghai handled over 41 million passengers, up by 15.3% over last year. The throughput of air cargo and mail reached 2.2 million tons, up by 14% over last year.

Ladies and Gentlemen, from this year on, Shanghai will be implementing its 11th five-year program. The first two decades of the 21st century is an important period of strategic opportunities for China. By 2020, Shanghai will become one of the economic, financial, trade and shipping centers of the world ("Four Centers"). Focusing on this development goal, in the coming 5 years, Shanghai will implement in earnest the scientific approach to development, make efforts to build a harmonious society, stick to development as our top priority, forge ahead with reform and opening up, improve people's lives and rally our work around the central objective of increasing Shanghai's international competitiveness. Shanghai will put in place the general framework for the "Four Centers" initiative, host a successful, wonderful and unforgettable World Expo and continue to improve the living standards of our people through rapid and sound economic and social development. To this end, we would focus on the following priorities.

1. We will transform the model of economic growth and put in place a service sector-driven industrial structure. We will unswervingly promote industrial restructuring, giving priority to the modern service sector and the manufacturing sector. The tertiary sector will contribute more than 50% to the city's GDP, and in the central districts, the percentage should be higher than 70%. On the one hand, by leveraging the strength of information and communications technology (ICT), We will place a premium on the financial and modern logistics industries and create modern service clusters so as to raise the level, size and added value of the modern service sector. On the other hand, we will introduce new technologies, processes and equipment to the advanced manufacturing sector so as to reach higher levels of technological sophistication, develop more proprietary core technologies and strong brands, thereby boosting the competitiveness of this sector.

2. We will increase the capacity for independent innovation and build an urban innovation system. Innovation capacity is crucial for a city's international competitiveness. By 2010, R&D expenditure will reach 2.8% of Shanghai's GDP. The contribution rate of technological progress will be around 65%. Therefore, We are committed to developing an innovation system with stronger capacities for locally pioneered innovation, innovation through integration and re-innovation through the internalization of imported technologies. The development of a business-led innovation system will gain further momentum. Shanghai will become an innovation-oriented city.

3. We will forge ahead with reform and opening up by taking full advantage of Pudong's head start gained by the pilot projects being implemented there. Reform is a strong driving force for economic and social development. Spearheaded by Pudong's pioneering efforts in development and opening-up, reforms will firmly maintain their socialist market economy orientation. We will intensify the comprehensive and simultaneous reforms of the government, the business, the market and society. We will also implement the opening up policies unswervingly in accordance with our WTO commitments and the master plan of the country.

4. We will build a harmonious society and continue to improve the living standards of the people. The ultimate objective of development is to improve people's lives. We will adopt a putting-people-first approach, accelerate the development of social undertakings, improve public service and promote overall human development. We attach great importance to the living standards of our people by focusing our work on employment, housing and social security.

5. We are making proactive efforts to prepare for the 2010 World Expo with a view to presenting a successful, wonderful and unforgettable World Expo. Regarded as "Olympics in the areas of economy, culture, science and technology", World Expos are top-level comprehensive exhibitions of far-reaching influence. The theme of 2010 Shanghai World Expo is "Better city, Better life". It is the first time for a developing country to host World Expo. It is estimated that nearly 200 countries, international organizations and companies will participate in it with an audience of more than 70 million people. Planning against high technological, ecological and cultural standards, we are now making all out efforts to make the 2010 World Expo in Shanghai a platform to show the fruits of world's economy, science and technology, to share cultures and arts and to promote friendly communication.

Ladies and Gentlemen, a city's development would not be possible without the development of modern infrastructure. This is particularly so in Shanghai. In order for Shanghai to become an international economic, financial, trade and shipping center, Shanghai's role as the regional hub must be strengthened by laying emphasis on key projects of infrastructure. In this regard, Shanghai has formulated a good plan, the three pillars of which are transportation, environmental protection and regeneration of old neighborhoods.

First, we will forge ahead with the development of key infrastructure focusing on hubs, functionality and networks. Our objective in the area of seaport development is to rank Shanghai among ports with the largest container throughput and to establish Shanghai as one of the international shipping centers by 2010. Last year, the phase one project of Yangshan Deepwater Port and the Yangshan Free Port Area were officially put into operation. We will expedite the development of follow-up projects and improve the soft environment for the shipping industry. In the area of airport development, our objective is for Shanghai to become an aviation hub by 2010. By then, there will be five runways in the Pudong International Airport, handling 80 million passengers and 5.7 million tons of cargo annually. For the Hongqiao International Airport, there will be two runways, handling 30 million passengers every year. In the area of Information Port, our objective is to build Shanghai into an ICT-enabled city by 2010. At present, Shanghai already has a relatively sophisticated information infrastructure. The next step of our work is to further expand ICT applications in economic and social development while improving the existing infrastructure. Our objective in the area of rail transport is to put in place a basic network with 13 lines and total length in operation of 512 km. The target for 2010 is 11 lines and 400 km. In the area of expressways, our objective is to put in place a full-fledged network with 880 km of roads open of traffic. In the area of waterways, we will step up the development of a high-grade inland waterway network featuring one ring and 10 spoke-like major waterways.

Second, we will strengthen environmental protection and ecological conservation. Since the 1990s, Shanghai has implemented the strategy of sustainable development. In particular, Shanghai implemented two rounds of the Three-Year Plan of Action for Environmental Protection. For 6 years in a row, the investment in environmental protection has been more than 3% of Shanghai's GDP with a total of $14 billion. In 2002, Shanghai was awarded by the United Nations for its special contribution to urban sustainable development. Aiming at building an eco-friendly city, Shanghai will implement the third round of the Three-Year Plan of Action for Environmental Protection. We will further improve water quality, control air pollution, development treatment facilities to handle solid wastes, industrial and agricultural pollution. Meanwhile, we will also accelerate industrial restructuring so as to phase out heavily polluting enterprises and promote clean production. As a result, we hope Shanghai will have bluer sky, greener land and cleaner water.

Third, we strike a good balance between preserving the historical cultural heritage and regenerating the old neighborhoods in our efforts to improve the living conditions and living environment of our people. We will further increase the green area in the central districts and public space, control over development and the layout of high buildings so as to provide a better environment for the people.

Ladies and Gentleman, through our unremitting efforts, Shanghai will become a more glorious international metropolis. A thousand mile journey begins with the first step.We will march towards our set goals confidently. We are also very clear that Shanghai can learn so much from the experience of many famous cities of the world, including Delhi. Our friends from India are more than welcome to pay a visit to Shanghai. I believe we can strengthen our mutual understanding and cooperation to write a new chapter of friendship.

Thank you for your attention!