Market Environment
Market Opening In market opening up, Shanghai always runs among the foremost in China. There has been lots of No.1 achieved in Shanghai’s opening up of service trade to foreign investment particularly after China’s accession to WTO. Shanghai is the only city, which firstly opens up in all the area of retailing, banking, insurance and telecommunications.
1. Market System
In order to make it the best ordered city in China, Shanghai is now actively integrating the loose market to enhance market level and improve legal environment to protect intellectual property rights.
Shanghai issued “Suggestions of Shanghai Municipal Government on M&A of SOEs by Foreign Investors” in 2002. In this year, non-public economy increases 18% higher than public economy，accounting for 32% of the GDP. In intellectual property protection, Shanghai has formulated 6 intellectual property laws and regulations. Besides, there are 3.78 lawyers among 10000 Shanghainese, which is 3.5 times that of Chinese average. There are over 50 foreign law firms in Shanghai，accounting for 1/3 of the total in China. Shanghai’s 160 municipal-level industrial associations also play important role in government decision-making and industrial self-discipline.
2. Social Credibility
Shanghai is particularly proud of its social credibility information system, the largest in China. In July 2000, Shanghai opened individual united credibility information system firstly in China. And in March 2002, Shanghai enterprises united credibility information systems was opened. Today 2.93 million persons’ (1/4 of Shanghai’s registered population) credibility files are covered by individual credibility system. Some 480, 000 enterprises have been incorporated into the enterprise credibility system, covering all enterprises in Shanghai.
3. Financial Market
As the financial center of China, Shanghai boasts the most comprehensive financial market system in China mainland.
In 2002, Financial Service Office was established to strengthen the service function of local government. The financial market in Shanghai includes securities, inter-bank offerings, bonds, futures, foreign currency and gold, etc. Among it, there are 730 listed companies and 775 stocks are issued on Shanghai stock market (54 B shares, total amounts up to USD3 billion, which have attracted many foreign investors and pave a new path for them to invest in China. The exchange value of stock on Shanghai stock market in 2002 accounted for 60% of China’s total, with amount up to RMB2800 billion. Shanghai Gold Exchange opened in 2002, which indicated China has established all the Exchange Markets for main financial products and made Shanghai be the domestic financial center of China.
4. Foreign Invested Financial Organizations
As more and more foreign financial units speeding up their coming into Shanghai, Shanghai’s financial market will be more complete and active towards world-level financial service.
Shanghai has more than 3300 Sino-foreign financial units among which there are about 70 operative foreign financial units with 54 foreign banks and 15 foreign insurance companies. Four foreign banks have set up their Chinese headquarters in Shanghai, which consist of Citibank, HSBC, Standard Chartered and overseas Chinese bank. The lending and borrowing business made by Shanghai’s foreign bank accounts for China’s half and lending and borrowing in RMB even accounts for 80%. Thirty foreign banks have been approved to engage in RMB business and twenty-three have been approved to operate foreign exchange business in full scope in Shanghai. Undoubtedly, Shanghai is the financial center of China and is moving towards the international financial center rapidly.
5. International Exhibition
Shanghai’s burgeoning exhibitions and conferences greatly promote the formation of an international market and indicate Shanghai’s rapid rising in its international standing.
The area of exhibition industry increases at the rate of 30%. Many world famous conferences have been held in Shanghai, such as Fortune forum, APEC, Shanghai 5 States Summit, ADB annual meeting, the 32nd ICC. Shanghai International mould expo has been listed in UFI. World Expo. 2010, which will be held in Shanghai, will make several records, for instance, the first time to be held in a developing nation, the largest in area and visitors. Shanghai will make an investment of over USD3 billion to it.
Social Resources
1.Educational Conditions
Shanghai boasts not only an adequate educational system, which consists of various universities, colleges, middle schools, primary schools and adult education schools, for domestic education, but many schools for the children of working staff from overseas, Hong Kong, Macao and Taiwan. A survey in 2002 showed that there were 25 international schools covering kindergartens, primary schools, junior schools and senior schools in Shanghai.
2.Human Resources
Shanghai is divided into 18 districts and 1 county, encompassing 153 towns and 3 townships. Some 13.34 million people are the permanent residents and the city has a total population of 16.74 million (including the floating population). By the end of 2001, Shanghai had employed 7.52 million people. Of the total, 24.5% were hired by the state-owned enterprises and institutions, 35.5% were employed by collectively owned units, and 40% found jobs in foreign invested companies, private units and other economic entities.
Shanghai’s talent qualification is at the leading position of China, and the productivity of unit human cost is rather high. Shanghai is well known not only as a city possessing abundant talent reserves, but also as one gathering talents from both at home and abroad. Some 50 universities and colleges are located in Shanghai and the students have exceeded 330 thousand. Shanghai has different level of the technical personnel up to 696.8 thousand, and in average there are 525 different kinds of technical personnel per 10000 persons. More than 1000 research and development institutions are located in Shanghai.
3. Talents Attracting
So far Shanghai has taken practical measures, with Talents Flexible Flow and Shanghai Green Card as the most famous ones, to attract demanded talents. Talents Flexible Flow encourages free-flow of talents, while Shanghai Green Card provides them with residence permit. In Shanghai there are over 32 thousand talents coming from overseas, accounting for 20% of the total in China and nearly 50 thousand permanent experts from overseas, Hong Kong and Macao, taking up 40% of the aggregate.
4. Public Health
With regard to medical security, there are about 4,600 medical institutes in various types, having more than 70 thousand sickbeds, including over 460 comprehensive hospitals, 26 CDCs, 10 women and children health centers. There are more than 100 thousand professionals in this field, including about 50 thousand doctors in Shanghai. Shanghai also has an extensive health care service network among the communities. So far, among the 18 foreign-invested hospitals and over 60 foreign-invested clinics approved by the government of China, 25 are located in Shanghai.
5. Urban transportation
Shanghai has built 2 subway lines and 1 light railway line. Furthermore, it has the 1st magnetic levitation railway in China. It is scheduled that the total length of rail transportation will increase to 233 kilometers in 2005 from the present 65 kilometers and the lines of rail transportation will grow to 15 with the length totaling 400 kilometers.
6. Foreigners in Shanghai
Shanghai is an ideal city to live in for foreign investors. According to the survey by the famous journal Economists, Shanghai has been appraised as the city that is most suitable for foreigners to live in.
At present, the number of foreigners living and working in Shanghai is far ahead of that in other cities of China. According to statistics, in 2002 lived in Shanghai about 100 thousand foreigners and 250 thousand Taiwanese, among which some 34,735 foreigners, coming from 126 countries, were employed.
There are 3 main reasons for so many foreigners choose to live in Shanghai: first, the relatively lower house price; second, convenient and leisure life; and third, they are optimistic about the future development of Shanghai.
7. Entertainments and Travel
As a historic city, by the end of 2001, there had been 16 state key protective relics, 110 city key protection relics, 21 historic memorial spots and 15 protective spots in Shanghai. Among the relics and spots, stand as the most famous the 1000-year-old Longhua Ancient Temple, the Three Kingdoms period built-in Jing’an Ancient Temple, the world-known Jade Buddha Temple, the famous eastern China’s Garden Yuyuan, as well as Jiading Confucian Temple, Songjiang Square Pagoda and Songjiang Zuibai Pond, retaining the historic relics and preserving the typical Chinese garden elites that originated in the Dynasties of Tang, Song, Yuan, Ming and Qing.
Since the beginning of 1990s, many well-known functional buildings have been erected continuously, adding a fascinating modern city’s scenery to Shanghai, as well as becoming the new sightseeing spots in Shanghai. The buildings include the People’s Square, called the city green lung, the Oriental Pearl Broadcasting & Television Tower that has made 10 world records, the Jinmao Mansion, the highest building in China, Nanjing Road Pedestrian Street, the Shanghai Museum, the Shanghai Grand Theater and the Shanghai City Plan Exhibition Hall.
The residents of Shanghai enjoy rich entertainments, with operas and concerts visiting Shanghai constantly in a year and fireworks making up the city very well on holidays. In addition, there are over 20 golf courses and several hundreds gyms in Shanghai and around areas. What’s more, Hengshan Road and Xin taindi, which are famous for their bars, often attract foreigners.
Transportation and Information
1.Shipping In the field of ocean transportation, Shanghai port has established shipping and trading connections with more than 600 shipping companies and 500 more ports in 200 countries and regions around the world. The throughput of Shanghai port reached 8.61million TEUs, which ranked the 4th in the world, only after Hong Kong, Singapore and Busan in 2002.
2.Overland Transportation
Shanghai also enjoys a developed inland transportation: you can reach all the railway terminals in China from Shanghai railway station. In terms of highway, Shanghai plans to build 650km of expressway network in 2005 when it takes 15 and 30 minutes from any major industrial zones, hubs of communications and satellite towns to the nearby expressway and downtown respectively. The total length of high way in Shanghai has reached 238Km. A comprehensive transportation network connecting Shanghai, Jiangsu, Zhejiang and even Yangtze Delta is coming into shape. Now starting from Shanghai, it takes only 4 hours to reach any of the cities in Yangtze Delta.
3. Air Transportation
In 2002, Shanghai’s airfreight volume ranked the first and air passengers number ranked the second among all cities in China. In domestic air routes, Shanghai has flights with all the provinces, national autonomous regions (except Taiwan) in China while Shanghai has flights with 59 cities in the world in international air routes. 31 international airline companies now have operations in Shanghai.
4. Deep-Water Port Construction
In order to satisfy the increasing throughput in container transportation, Shanghai started the Dayangshan and Xiaoyangshan deep-water port project that is the focus of China’s deep-water port construction in Yangtze River Valley and Delta. Its positioning is to be the hub port of northeast Asia, finally building a port with 15m deep, 50 more large container berths and 25 million TEU capacity. In the meantime, a 95km2 harbor city holding 300 thousand residents will be built up as the complete project.
5. Airport Hub Construction
Shanghai will build a combination-style international airport hub with Pudong international airport as the core and Hongqiao airport as the supplement. Currently, Pudong international airport has an annual capacity for 20 million passengers and 750 thousand tons airfreight. It is planned to be preliminarily confirmed as the air port hub in Asia-pacific in 2005 and finally build up 4 4E-level runways, 200 parking berths, 80 million passengers and 5 million tons air freight. (As we know, general international airport hub requires over 2 runways, 30 million passengers and 1 million tons airfreight. Pudong airport will greatly surpass such standard).
6. Information Harbor Construction
Shanghai’s digitalization is in the lead in China. It is planned that Shanghai’s level will reach the average standard of the central cities in developed nations in 2005 and the framework of “digital city” will be preliminarily built up in 2007.
Main and complete projects for Shanghai information harbor include intensive information pipelines projects, broadband network construction projects, 2 key application projects construction, and some complete application projects. Objectives to be realized in 2010 include:
1)Internet international access broadband reaches over 1000MB；
2)Optical fiber coverage in building and residential area over 95%；
3)Family broadband linking coverage reaches 50%；
4)Narrow band linking capacity over 60 thousand lines，reaching 1 million users；
5)Local intranet bandwidth reaches over 100MB;
6)Family telephone coverage reaches 85%, mobile phone coverage reaches 23.8%, cable TV family coverage reaches 85.4%.
To be continued
