The Shanghai Economic Sphere and its Evolution as a Mega-Region —Geographical Expansion and the Rising Added Value of Shanghai— By Keiichiro Oizumi, Senior Economist Junya Sano, Senior Researcher Center for Pacific Business Studies Economics Department Japan Research Institute
Summary 1. This article examines characteristics of economic development of the Shanghai economic sphere, which is defined as consisting of Shanghai Municipality, Jiangsu Province and Zhejiang Province. Income levels in this region are by far the highest in China. 2. With a population of 140 million, the Shanghai economic sphere has a gross re- gional product similar to that of South Korea. At over $5,000, the region’s per capita GRP is close to that of Malaysia. Development has been driven by export-based in- dustrialization. In 2007, the region’s exports were worth $482.0 billion, equivalent to 40% of the total exports of China. This is higher than the total for South Korea. Foreign-owned enterprises are the main driving force behind this performance. In 2007, foreign direct investment reached $40.2 billion. 3. Also significant is the region’s expansion as a consumer market. The Shanghai economic sphere accounts for approximately 20% of total retail sales in China. In urban areas, diffusion rates for televisions, washing machines, refrigerators and other electrical appliances have reached nearly 100%, and ownership of air conditioners, computers and mobile telephones is also rising. It is estimated that over 2 million households in the region have annual incomes in excess of $20,000. 4. Since the 1990s, the economic development of the Shanghai economic sphere has been accelerated by the active involvement of the central government in the de- velopment of the economic sphere, including the Pudong development in Shanghai, and by a continual influx of Japanese and Taiwanese companies in the area around Shanghai under the open-door policy. In the 21st century, the region’s development has moved into high gear under the Yangtze River Delta Economic Zone concept. Activities based on this concept, which encompasses municipality and provinces, are expected to raise the level of development even higher. 5. The geographical extent of the Shanghai economic sphere is also expanding. This is apparent from changes in the number of prefecture-level cities, which form the next tier of government administration below the provinces. In 2000, apart from Shanghai itself, there were just three prefecture-level cities with per capita GRP in excess of 20,000 yuan. By 2007, the number had risen to 18. At the same time, there has been a dramatic improvement in the productivity of manufacturing and service industries in the region’s core cities, such as Shanghai and Suzhou. 6. However, there is major economic disparity between the Shanghai economic sphere and other regions. This is particularly true of Anhui Province and the northern part of Jiangsu Province, where massive population outflows triggered by the slow pace of development appear to be causing depopulation. When this factor is taken into account, it seems unlikely that the Shanghai economic sphere will be able to maintain its present rate of expansion. 7. The global economic recession that began in the autumn of 2008 has inevitably caused economic activity in the Shanghai economic sphere to decelerate signifi- cantly. Despite this, the region’s growth potential remains high compared with other export-dependent Asian economies, which have all slipped into negative growth. Yet there are indications that the region’s capacity to supply labor, which has sustained industrialization in the past, may be nearing its limit. Improvements to the competi- tiveness of manufacturing and service industries will therefore be essential to the sustainable development of the Shanghai economic sphere in the future. This is es- pecially true of service industries, which will need to encourage increased inflows of foreign capital and technology and attract talented human resources from overseas. Next year’s Shanghai Expo is expected to play a key role in this context.
2 RIM Pacific Business and Industries Vol. IX, 2009 No. 33 Introduction the Beijing area, the Shanghai area, and the Shen- zhen-Hong Kong area. Over a short period of In this article we will examine characteristics time, these areas are expected to evolve from fac- of the economic development of the Shanghai tories for the world into new production centers municipality and the neighboring provinces of Ji- for innovation and creativity (Florida, R. [2008]). angsu and Zhejiang, which together form a single An understanding of these areas, which are economic area known as the “Shanghai economic smaller than the national level but bigger than cit- sphere.” The decision to analyze a single eco- ies or provinces, is also important when consider- nomic area reflects the size of China, which has a ing business development in China. For example, population of 1.3 billion and a land area 25 times there is a major regional economic disparity in the size of Japan. The authors felt that a study lim- China, and it would be erroneous to assume, based ited to a specific region would provide a more ac- on the prosperity of Shanghai and Beijing, that curate picture of current growth patterns in China. China is a market of 1.3 billion people. Instead, With a per capita GDP of just over $3,000, China business strategies need to be based on specific as a whole is still classed as a developing country. perspectives, such as the geographical extent of However, there are areas, such as Shanghai, where the prosperity generated by Shanghai and Beijing. per capita GDP is already above $10,000, and This perception is reflected in the author’s de- there is a risk that assessments based solely on na- cision to define Shanghai Municipality, Jiangsu tional indicators will fail to provide a true picture Province and Zhejiang Province as the Shanghai of the remarkable development that is occurring economic sphere. Economic conditions in this in coastal regions. It also seems meaningful to ap- economic sphere were analyzed using data from proach an area in which there are many high-in- statistical yearbooks for each municipality and come direct-controlled municipalities and regions province. This article is structured as follows. in close proximity to each other as a single region. In Part I, we will ascertain the level of regional In recent years, economic spheres encompass- economic disparity in China and clarify the eco- ing multiple cities and provinces have also at- nomic status of the Shanghai economic sphere. tracted growing interest within China. For ex- This will be followed in Part II by a review of the ample, the National Bureau of Statistics of China region’s development processes from a policy per- now publishes economic yearbooks covering the spective. This review will also show that initiatives Yangtze River Delta, the Pearl River Delta, Hong by central and regional governments are starting Kong, Macao and Taiwan from 2003. Also, a 2007 to move into high gear. In Part III we will ana- report published by Shanghai Jiao Tong Universi- lyze the direction of industrialization and service ty on urban areas in China includes a comparative industry development in the Shanghai economic study of 18 economic spheres(1) (Gao, R., Wu, X., sphere and examine changes in areas of activity Che, C. [2008]). One of the conclusions of that and industrial structures from the perspective of study is an estimation that the greater Shanghai prefecture-level cities. This analysis will show that area will overtake New York and Tokyo to become areas of activity have expanded, and that there has the world’s biggest urban area by 2018(2). been a shift toward high-added-value activities in There is also international interest in economic the central region, including Shanghai. In Part IV, spheres centering on major cities. For example, an analysis of the impact of the global economic Richard Florida, a well-known urban studies recession on Shanghai and the Shanghai economic theorist, has used the term “mega-region” to de- sphere will be followed by an examination of me- note the areas that power the world economy. dium- to long-term issues. His group identifies these areas by using satellite photographs to measure the strength and extent of the light emitted by them at night. The 40 mega- regions listed by Florida include three in China:
RIM Pacific Business and Industries Vol. IX, 2009 No. 33 3 I. The Economic Status of the Table 1 Economic Disparity and Shanghai Economic Sphere Migration in China
Real GDP Population Population Per Capita GDP Growth Rate Inflow inflow rate (1) Economic Growth Driven by Three Re- Region 2000 2007 2000-07 gions ($) ($) (%) (10 thousands) (‰)
Shanghai 3,284 8,623 12.2 301.4 170.0 China has achieved amazing economic devel- Beijing 2,167 7,529 12.3 224.5 146 opment since shifting to its reform and open- Tianjin 1,978 5,954 14.2 90.9 87 Zhejiang 1,559 4,879 13.4 506.1 103.0 door policy in 1978. Between 1979 and 2008, its Jiangsu 1,394 4,438 13.5 329.1 44.0 real GDP growth rate averaged 9.8% per annum. Guangdong 1,351 4,324 13.6 1,199.6 131.0 Shandong 1,137 3,644 13.5 92.3 10.0 Obviously, not all regions within China achieved Fujian 1,364 3,395 12.0 193.4 55.0 the same high level of growth. Until the 1990s, Liaoning 1,331 3,371 12.0 67.4 16.0 China’s approach was increasingly permeated by Inner Mongolia 712 3,329 17.7 39.4 17.0 Hebei 912 2,596 11.8 61.2 9.0 a policy of allowing regions with development po- Jilin 806 2,545 12.0 21.8 8.0 tential to achieve prosperity first. This stance, to- Heilongjiang 1,065 2,429 11.0 19.5 5.0 Shanxi 602 2,221 13.1 21.0 6.0 gether with increased economic freedom, resulted Xinjiang 856 2,211 10.5 57.8 29.0 in rapid growth in coastal regions. The resulting Hubei 857 2,129 11.2 50.1 9.0 Henan 670 2,108 12.3 28.0 3.0 economic disparity with inland regions would Chongqing 621 1,924 11.7 42.7 15.0 eventually emerge as a social problem. However, Shaanxi 557 1,917 12.2 25.5 7.0 by the start of the 21st century, inland regions were Ningxia 571 1,916 11.5 7.5 13.0 Hunan 692 1,903 11.1 49.4 8.0 also starting to achieve high growth. All direct- Hainan 796 1,903 11.1 19.1 23.0 controlled municipalities, provinces and autono- Qinghai 615 1,866 12.1 7.4 14.0 Sichuan 582 1,699 11.9 76.4 9.0 mous regions (referred to below as “provinces”) Jiangxi 584 1,655 11.9 49.9 12.0 except Yunnan recorded double-digit average real Guangxi 552 1,642 11.8 39.7 9.0 Tibet 542 1,584 12.7 2.5 9.0 GDP growth rates between 2000 and 2007 (Table Anhui 613 1,582 11.3 66.8 11.0 1). Yunnan 551 1,381 9.9 46.9 11.0 However, there is still considerable economic Gansu 464 1,357 11.1 11.8 5.0 Guizhou 340 958 10.9 53.1 14.0 disparity between regions. According to statistics National 928 2,742 10.3 3,802.2 – for 2007, Shanghai’s per capita GDP, which was Notes: Dollar exchange rates are yearly averages. Population in- the highest in China at $8,623, was nine times flows were estimated using data from a 1% national popu- lation sampling survey in 2005. Population inflow rates are higher than Guizhou’s, which was the lowest at calculated by dividing population inflows by populations $958. Levels are extremely high in the top-rank- and are shown in thousandths (‰). Source: China Statistical Yearbook, 2005 1% national population ing provinces. The top six provinces—Shanghai, sampling survey, etc. Beijing, Tianjin, Zhejiang, Jiangsu and Guang- dong—together account for 20.2% of China’s to- In recent years, there have been dramatic popu- tal population but 39.7% of gross regional product lation movements from rural areas into these eco- (GRP). Beijing and Tianjin are close together, as nomic spheres. Rural people who move to cities are Shanghai, Zhejiang and Jiangsu. Guangdong for work are known as nong-min-gong (peasant has close links to Hong Kong. Beijing and Tianjin workers). Some estimates place the number of are known as the “Bohai Rim region,” Shanghai, people in this category as high as 250 million at Zhejiang and Jiangsu as the “Yangtze River Delta the end of 2008. According to data from the 2005 economic sphere,” and Guangdong and Hong 1% national population sampling survey, the top Kong as the “Pearl River Delta economic sphere.” six municipalities and provinces accounted for In this article, we will focus on the Yangtze River 70% (approximately 26.51 million people) of total Delta economic sphere, and Shanghai, Zhejiang population movement across city and provincial and Jiangsu will be referred to as the “Shanghai boundaries between 2000 and 2005. It is estimated economic sphere.” that 30%, or approximately 11.37 million people,
4 RIM Pacific Business and Industries Vol. IX, 2009 No. 33 moved into the Shanghai economic sphere. Shanghai’s registered population and resident population are both below 2% of the totals for (2) Economic Scale Comparable to South Ko- all of China. However, its gross regional product rea (GRP) of 1,218.9 billion yuan is equivalent to 4.7% of the national total. In dollar terms, Shang- Table 2 analyzes the economic scale of the hai’s GRP of approximately $160 billion is similar Shanghai economic sphere. To ascertain the rela- to that of Malaysia ($186.7 billion). At $8,627, the tive ranking of Shanghai, data for all of China, per capita GRP of Shanghai’s resident population the Bohai Rim region (Beijing, Tianjin), the Pearl is substantially higher than the Malaysian figure River Delta economic sphere (Guangdong Prov- of $6,872. Per capita GRP for the registered popu- ince), South Korea, Thailand and Malaysia were lation is in excess of $10,000 ($11,624). also included. According to the World Bank classifications, Population statistics for Shanghai show that the countries with per capita gross national income registered population was 13.79 million and the (GNI) of $935 or lower are low-income coun- resident population 18.58 million in 2007. The tries. Countries with per capita GNI over $935 resident population represents the number of peo- and under $11,456 are classed as middle-income ple actually living in Shanghai, including peasant countries, and those with figures over $11,456 workers. The resident population will be higher are regarded as high-income countries(3). A per than the registered population in regions that re- capita GNI of $3,705 is the dividing line between ceive large inflows of peasant workers, and lower lower middle-income and higher middle-income than the registered population in regions from countries. If GDP and GNI are treated as equiva- which peasant workers migrate. Because large lent, Shanghai has reached the level of a high- numbers of migrant workers flow into Shanghai, income country if the per capita figure is based on its resident population is over 4 million greater its registered population and would rank among than its registered population. higher middle-countries based on the figure for its
Table 2 The Scale of the Shanghai Economic Sphere (1990, 2007)
Population GDP, GRP Per Capita GDP, GRP Upper: registered population, Upper: 100 million yuan, Upper: registered population, Lower: resident population Lower: 100 million dollars Lower: resident population % = percentage of total % = percentage of total 1990 2007 1990 2007 1990 2007 (ten thousand (ten thousand (100 million (100 million (%) (%) (%) (%) (yuan) (dollars) (yuan) (dollars) people) people) of yuan, $) of yuan, $) All of China 114,333 100.0 132,129 100.0 18,668 100.0 257,306 100.0 1,633 341 19,474 2,561 – – – – 3,903 33,838
Shanghai eco- 12,190 10.7 13,392 10.1 3,104 16.6 56,710 22.0 2,546 532 42,346 5,569 nomic sphere 12,185 10.7 14,543 11.0 649 7,458 2,547 533 38,995 5,128 Shanghai 1,283 1.1 1,379 1.0 782 4.2 12,189 4.7 6,095 1,274 88,390 11,624 Municipality 1,334 1.2 1,858 1.4 163 1,603 5,862 1,226 65,603 8,627 Jiangsu 6,672 5.8 7,354 5.6 1,417 7.6 25,741 10.0 2,124 444 35,003 4,603 Province 6,706 5.9 7,625 5.8 296 3,385 2,113 442 33,759 4,440 Zhejiang 4,235 3.7 4,659 3.5 905 4.8 18,780 7.3 2,137 447 40,309 5,301 Province 4,145 3.6 5,060 3.8 189 2,470 2,183 456 37,115 4,881 Bohai Rim eco- 1,898 1.7 2,172 1.6 812 4.3 14,403 5.6 4,278 894 66,312 8,721 nomic sphere 1,961 1.7 2,748 2.1 170 1,894 4,141 866 52,413 6,893 Pearl River Delta 6,246 5.5 8,156 6.2 1,559 8.4 31,084 12.1 2,496 522 38,112 5,012 economic sphere 6,283 5.5 9,449 7.2 326 4,088 2,481 519 32,897 4,326 (ten thousand people) (ten thousand people) ($100 millions) ($100 millions) ($) ($) South Korea 4,287 4,846 2,638 9,698 6,153 20,012 Thailand 5,584 6,575 853 2,458 1,528 3,738 Malaysia 1,810 2,717 440 1,867 2,432 6,872 Source: Compiled using data from the China Statistical Yearbook, the Asian Development Bank and other sources
RIM Pacific Business and Industries Vol. IX, 2009 No. 33 5 resident population. In other words, if Shanghai pendence (the ratio of exports to GDP [GRP]) and is viewed in isolation from the rest of China, it is foreign direct investment inflows. now approaching the income levels seen in devel- In 2007, exports from Shanghai Municipality oped nations. amounted to $137.3 billion, or 11.3% of the to- The Shanghai economic sphere, which includes tal for China. This total is close to the figures for Jiangsu Province and Zhejiang Province as well Thailand ($152.2 billion) and Malaysia ($176.0 as Shanghai, has a resident population of 145.43 billion). The pace of growth has been especially million, which is greater than Japan’s population fast in recent years. Between 2000 and 2007, ex- of 127.69 million. Its GRP of 5,671.0 billion yuan ports increased by an average 27.8% per annum. ($745.8 billion) is approaching the level of South This is reflected in Shanghai’s export dependence, Korea ($969.8 billion)(4). The importance of the which has climbed from 32.4% in 1990 to 85.7% Shanghai economic sphere can be gauged from in 2007. This is higher than the ratio for Thailand the fact that it has only 11.0% of China’s total (61.9%) and close to that for Malaysia (94.3%), population but generates 22.0% of GRP. which is a trading country. At 38,995 yuan ($5,128), per capita GRP is In 2007, exports from the Shanghai economic lower than the figure for Shanghai alone but twice sphere reached $482.0 billion, or 39.6% of the na- as high as the national average of $2,561. Given tional total (Fig. 1). In 1990, Guangdong Province the region’s high growth rate, which has averaged was China’s biggest exporting center, accounting 13% in recent years, its per capita GRP can be for 35.7% of total exports, while the Shanghai expected to reach Malaysia’s level ($6,872) in the economic sphere contributed only 16.7%. In 2004, not-too-distant future. Jiangsu Province and Zhe- the Shanghai economic sphere overtook Guang- jiang Province still include many impoverished re- dong and has remained China’s biggest exporting gions. If these are excluded, per capita GRP rises center ever since. to almost $7,000 (see Part III). Not only Shanghai but also Jiangsu Province and Zhejiang Province have achieved high export (3) 40% of National Production growth. Between 1990 and 2007, their exports increased by an average of 28.6% and 27.5% re- Export-oriented industrialization has driven the spectively per year. Their export dependence rose high growth achieved by the Shanghai economic from 9.8% and 11.6% respectively in 1990 to sphere. Table 3 traces trends in exports, export de- 61.4% and 55.5% respectively in 2007.
Table 3 External Performance of the Shanghai Economic Sphere (1990, 2007)
Export Foreign Direct Exports Dependence Investment Inflows 1990 2007 1990 2007 1990 2007 ($100 millions) (%) ($100 millions) (%) (%) (%) ($100 millions) (%) ($100 millions) (%) All of China 621 12,178 15.9 36.0 31.7 835.2 Shanghai economic sphere 104 16.7 4,820 39.6 16.0 64.6 3.5 10.9 401.8 48.1 Shanghai Municipality 53 8.5 1,373 11.3 32.4 85.7 1.7 5.5 79.2 9.5 Jiangsu Province 29 4.7 2,077 17.1 9.8 61.4 1.2 3.9 218.9 26.2 Zhejiang Province 22 3.5 1,370 11.2 11.6 55.5 0.5 1.5 103.7 12.4 Bohai Rim economic sphere 29 4.7 684 5.6 17.1 36.1 3.1 9.8 103.4 12.4 Pearl River Delta 222 35.7 3,734 30.7 68.1 91.3 14.6 46.1 171.3 20.5 economic sphere ($100 millions) ($100 millions) (%) ($100 millions) ($100 millions) South Korea 650 3,715 24.6 38.3 8.0 105.1 Thailand 231 1,522 27.0 61.9 24.4 112.4 Malaysia 294 1,760 66.9 94.3 23.3 84.6 Source: Compiled using statistics from the China Statistical Yearbook, the Asian Development Bank, the IMF and other sources
6 RIM Pacific Business and Industries Vol. IX, 2009 No. 33 Fig. 1 The Shanghai Economic Sphere: lion. If the U.S. market, which is currently the China’s Biggest Exporting Center world’s biggest, continues to contract, it is possi- ble that China will emerge as the world’s leading (%) market in 2009. 50 Table 4 analyzes indicators relating to the con- 45 sumer market of the Shanghai economic sphere. 40 35 Between 1990 and 2007, retail sales increased 30 14.9 times, from 120.3 billion yuan to 1,790.0 bil- 25 lion yuan. After deflation to reflect the CPI rate 20 15 of increase, this is equivalent to an average yearly 10 growth rate of 11.7%, compared with the national 5 average of 9.5% per annum. The region’s share of 0 1992 95 98 2001 04 07 the national total has risen from 14.5% in 1990 to (Calendar years) 20.1% in 2007. In other words, the consumer mar- Shanghai Municipality Jiangsu Province ket is growing at an even faster pace than China’s Zhejiang Province Shanghai economic sphere Guangdong Province rapidly expanding market. A more detailed picture of market conditions Notes: Based on point of origin (manufacture) of export in the Shanghai economic sphere emerges from items Source: National Bureau of Statistics of China, China Sta- the results of household budget surveys published tistical Yearbook (various years) by provincial statistical bureaus. This analysis is based specifically on items relating to living stan- In 2007, exports from the Shanghai economic dards in household budget survey data included sphere exceeded the total for South Korea ($371.5 in the statistical yearbook of each province. There billion), and export dependence was also high at are issues with these surveys, including the small 64.6%. Foreign-owned enterprises are heavily in- size of samples and the fact that their surveys are volved in the region’s export trade. Direct invest- divided into urban (cities, towns) and rural (town- ment into the region has increased from just $400 ships, villages) categories. However, the data are million (including $200 million into Shanghai useful for ascertaining the situation in general Municipality), or 10.9% of the figure for all of terms. China, in 1990 to $40.2 billion in 2007, includ- One fact that can be confirmed from the data is ing $7.9 billion for Shanghai. This is equivalent that both per capita household incomes and ex- to 48.1% of all direct investment into China and penditure have both risen dramatically in Shang- is higher than the combined total for Thailand hai and urban areas of Jiangsu Province and Zheji- and Malaysia. Companies from Japan and Taiwan ang Province. The extent of income growth can be have particularly high hopes for the Shanghai eco- gauged by comparing figures for 1990 and 2007. nomic sphere. In Shanghai, income increased by a factor of 10.8 between those years, from 2,182 yuan to 23,623 (4) Rapidly Expanding Consumer Market yuan. In Jiangsu Province, income increased 11.2 and Wealth times, from 1,464 yuan to 16,378 yuan, while in Zhejiang Province the 2007 figure of 20,574 The Shanghai economic sphere is also signifi- yuan is 10.6 times higher than the 1990 result of cant as a consumer market. The Chinese consum- 1,932 yuan. There were similar rises in expendi- er market is also expanding at the national level, ture over the same period. The figure for Shanghai and the pace of that expansion has attracted world increased 8.9 times, from 1,937 yuan in 1990 to interest in recent years. For example, in 2008, the 17,255 yuan in 2007. In Jiangsu Province, expen- number of motor vehicles sold in China was 1.8 diture increased by a factor of 8.0, from 1,339 times higher than the Japanese total at 9.36 mil- yuan to 10,715 yuan, while in Zhejiang Province
RIM Pacific Business and Industries Vol. IX, 2009 No. 33 7 Table 4 Purchasing Power in the Shanghai Economic Sphere
Urban Household Urban Household Engel's Retail Sales Incomes Expenditure Coefficient 1990 2007 1990 2007 1990 2007 1990 2007 (100 million yuan) (%) (100 million yuan) (%) (Yuan/person/year) (Yuan/person/year) All of China 8,300 89,210 1,510 13,786 1,279 9,998 54.2 36.3 Shanghai economic sphere 1,203 14.5 17,900 20.1 – – – – Shanghai Municipality 334 4.0 3,848 4.3 2,182 23,623 1,937 17,255 56.5 35.5 Jiangsu Province 515 6.2 7,838 8.8 1,464 16,378 1,339 10,715 55.5 36.7 Zhejiang Province 354 4.3 6,214 7.0 1,932 20,574 1,604 14,091 55.1 34.7 Bohai Rim economic sphere 448 5.4 5,404 6.1 – – – – – – Beijing Municipality 308 3.7 3,800 4.3 1,787 21,989 1,646 15,330 54.2 32.2 Tianjin Municipality 140 1.7 1,604 1.8 1,639 16,357 1,440 12,029 57.9 35.3 Pearl River Delta economic sphere Guangdong Province 667 8.0 10,598 11.9 2,303 17,699 1,984 14,337 57.2 35.3 Source: Compiled using data from the China Statistical Yearbook and statistical yearbooks for each province it rose 8.8 times, from 1,604 yuan to 14,091 yuan. Table 5 Urban Income Strata (2007) During this process, Engel’s coefficient (food (Yuan/person/year) expenditure as a percentage of total expenditure) Shanghai Jiangsu Zhejiang China fell from over 50% to below 30%. Ownership of Municipality Province Province household goods, such as televisions, washing ma- Urban population 16.48 40.57 28.94 593.79 chines and refrigerators, expanded, and by 2007 (millions) almost 100% of urban households possessed these 10% 45,533 51,555 36,785 47,149 items. Current statistics indicate that ownership of 20% 26,273 31,342 22,234 30% air conditioners, mobile telephones and computers 27,286 18,980 23,518 16,386 40% has started to increase rapidly. 50% 20,249 13,575 17,219 12,042 Growth in household ownership of consumer 60% 70% durable goods can be ascertained by subtracting 15,131 9,758 12,911 8,901 numbers of units owned in 2000 from the figures 80% 90% 6,926 9,533 6,505 10,297 for 2007. This formula yields increases of 22 mil- 100% 4,456 6,347 4,210 lion units for color televisions, 9 million for re- Average 23,623 16,378 20,574 13,786 frigerators, 18 million for washing machines and Source: Compiled using data from statistical yearbooks for 34 million for air conditioners. The numbers of each province and other sources computers and mobile telephones owned rose by 18 million and 47 million respectively. These fig- 20%. There is similar income disparity in Jiangsu ures simply represent changes in numbers of units Province and Zhejiang Province. owned. If replacement demand is also included, Of particular interest is the wide gap between the consumer market appears even larger. the highest average income stratum and the stra- However, we also need to be aware that there is tum immediately below that level. In Shanghai, significant income disparity within the urban sec- the average income of those in the top 20% are 1.7 tor, and that the consumer market is not expand- times higher than those in the next quintile (20- ing uniformly. Table 5 divides urban and provin- 40%). In Jiangsu Province, the average incomes cial populations into the income strata used in the for the top 10% is similarly 1.7 times higher than 2007 household budget survey, though it should the figure for the 10-20% stratum, while in Zhe- be noted that the standards used to classify income jiang Province the multiple is 1.6 times. High- levels vary according to the city and province. The income people are obviously the main drivers of average income for the top 20% in Shanghai is growth in the consumer market. The top quintile 47,149 yuan. This is over three times higher than in Shanghai and the top decile in Jiangsu Prov- the 10,297 yuan average for those in the bottom ince and Zhejiang Province represent an aggregate
8 RIM Pacific Business and Industries Vol. IX, 2009 No. 33 population of 10.25 million(5). as a major source of government revenues(8), and Assuming that the average household consists freedom under the policy was limited. This situa- of 3.5 people, these figures translate into 2.93 mil- tion gradually began to change in the 1980s. lion households with an average household in- In 1984, the Chinese Communist Party and the come of 167,000 yuan (approximately $22,000). State Council (referred to below as the “central Recalculation using the World Bank’s purchasing government”) selected 14 cities as Coastal Open power parity rates(6) increases this household in- Cities. A total of five cities in the Shanghai eco- come figure by a factor of 2.2 to $46,000, which is nomic sphere were chosen, including two in Ji- higher than the average for a Japanese household. angsu Province (Lianyungang, Nantong) and two While this analysis has focused mainly on ur- in Zhejiang Province (Wenzhou, Ningbo), as well ban incomes and expenditure, it should be noted as Shanghai itself. This decision indicated the that household incomes and expenditure in rural central government now saw the lower reaches of areas of the Shanghai economic sphere are also the Yangtze as an engine for economic growth. relatively high. The average per capita yearly in- China’s open-door policy began with the es- come in rural areas of Shanghai Municipality is tablishment of four special economic zones in 10,145 yuan, which is similar to the figure for Guangdong Province and Fujian Province in urban areas in Guizhou Province (10,678 yuan). 1980, with the goal of actively introducing foreign This indicates that the consumer market in the money and technology. Under the 1984 policy, Shanghai economic sphere is spreading outwards this concept was expanded to include Shanghai, from the urban sector into the rural sector(7). Jiangsu Province and Zhejiang Province. The central government gave its approval for foreign- owned companies that moved into economic and II. Development History of the technology development zones (industrial parks) Shanghai Economic Sphere established in the open coastal cities to receive the same concessions as were available in special (1) 1980s: Designation under Reform and economic zones in Guangdong Province and Fu- Open-Door Policy jian Province, including business tax exemptions and reduced tax rates(9). The regional governments We will next examine the development history of Shanghai Municipality, Jiangsu Province and of the Shanghai economic sphere from a policy Zhejiang Province began to develop economic and perspective. Specifically, we will look at events technology development zones while actively en- between the 1980s, when China began to imple- couraging foreign-owned companies to move into ment its reform and open-door policy in earnest, their regions. and 2009, with particular emphasis on the de- In 1985, the central government designated ar- velopment strategies and concepts of central and eas of the Pearl River Delta in Guangdong Prov- regional governments and related policies, and ince and the Minnan Delta in southern Fujian investment by foreign-owned enterprises. By Province, as well as several cities in the Yangtze comparing development in this region with devel- Delta(10) (Shanghai, together with Wuxi, Suzhou opment in the rest of China, we will also seek to and Changzhou in Jiangsu Province, and Jiax- identify characteristics of the Shanghai economic ing and Huzhou in Zhejiang Province) as coastal sphere (Table 6). open economic zones. Incentives offered by the By the late 1970s, Shanghai was flourishing as central government to foreign-owned companies China’s biggest industrial city. However, develop- established in the designated areas included 20% ment activity was inadequate because government reductions in business taxes. In addition, foreign- policies, such as the Third-Front Construction pol- owned companies that invested in long-term proj- icy, gave priority to inland regions. Furthermore, ects worth $30 million or more were also eligible Shanghai, like Beijing and Tianjin, was positioned for a 15% reduction in business tax rates(11).
RIM Pacific Business and Industries Vol. IX, 2009 No. 33 9 Table 6 Chronology of Policy Measures Relating to the Development of the Shanghai Economic Sphere
Year Events • The CCP Central Committee and the State Council (referred to below as the “central 1984 government”) select Shanghai, Lianyungang and Nantong in Jiangsu Province, and Wenzhou and Ningbo in Zhejiang Province as Coastal Open Cities. • The central government designates the Yangtze River Delta a Coastal Open Economic 1985 Zone. • Three districts in Shanghai Municipality (Minhang, Hongqiao, Caohejing) are designated 1986-88 State-Level Economic and Technology Development Zones. 1988 • China’s first expressway is built in Shanghai. • The Pudong development scheme proposed by the Shanghai Municipal government is 1990 approved by the central government. • The Caohejing Economic and Technology Development Zone is also designated a State- 1991 Level High-Tech Industrial Development Zone. • At the 14th National Congress of the CCP, then General Secretary Jiang Zemin stated that the development of Pudong would bring prosperity to the entire Yangtze Delta re- 1992 gion. • A conference of sector leaders from 14 Yangtze Delta cities was held as a forum for the discussion of inter-city cooperation. • The China-Singapore Suzhou Industrial Park is established. (This is the first industrial 1994 park development project involving a foreign government.) • The concept of developing cities in the Yangtze Delta and along the Yangtze River as a 1996 single economic zone is approved by the National People’s Congress (9th 5-Year Plan). 2001 • The development of the Pudong New Area is included in the 10th 5-Year Plan. • The Shanghai government announces a policy putting quality before quantity when solic- 2005 iting foreign investment. • In addition to the reinforcement of systems in the Pudong New Area and the improve- ment of its capacity to drive development in the Yangtze Delta region, the 11th 5-year 2006 plan also calls for the improvement of the total potential of cities in the region through complementation based on inter-city divisions of labor and cooperation. • The governments of one municipality and two provinces (vice-governor level) sign a memorandum on customs clearance collaboration in the Yangtze Delta region. 2007 • Premier Wen Jiabao convenes a roundtable meeting on economic and social develop- ment in the Yangtze Delta region. • The Executive Meeting of the State Council adopts a guidance opinion on reform and open-door measures and increased economic and social development in the Yangtze 2008 Delta region. • The Sutong Bridge and Hangzhou Bay Bridge are completed. • The Shanghai government submits a bill calling for the construction of an international finance center to the Shanghai People’s Congress. • The Executive Meeting of the State Council adopts an opinion “Concerning the Con- 2009 struction of an International finance Center and Shipping Center in Shanghai”. • The Executive Meeting of the State Council designates Shanghai and four cities in Guangdong Province (Shenzhen, etc.) as model cities for yuan-denominated trade set- tlements. Notes: Taizhou City in Jiangsu Province joined the 1992 council. The Yangtze Delta City Economic Co- operation Forum was established in 1997. Taizhou City in Zhejiang Province became a member in 2003. Source: Xinhuanet and other media sources
While the incentives were inferior to those an important influence on the evolution of the available in the special economic zones and eco- Shanghai economic sphere. nomic and technology development zones, the Initiatives during the 1980s were generally lo- designation of these areas as coastal open eco- calized, and there was no direct linage to the de- nomic zones expanded the scope of the foreign velopment of economic spheres encompassing investment introduction policy from individual multiple provinces and direct-controlled munici- points in the form of special economic zones and palities. However, by creating an environment economic and technology development zones conducive to investment by foreign-owned busi- to entire geographical areas encompassing mul- nesses, the government laid foundations for the tiple cities(12). The selection of Yangtze Delta as a rapid development of the Shanghai economic coastal open economic zone at the same time as sphere in the 1990s and beyond. Guangdong Province and other areas would have
10 RIM Pacific Business and Industries Vol. IX, 2009 No. 33 (2) 1990s: Accelerated Economic Develop- volumes. In addition, large number of foreign fi- ment Driven by Foreign Capital Inflows nancial institutions opened offices in Shanghai(15). Shanghai’s evolution as a service economy ac- Interest in the development of Shanghai, Ji- celerated the shift of manufacturing industries in angsu Province and Zhejiang Province intensified neighboring Jiangsu Province and Zhejiang Prov- rapidly in the early 1990s. The impetus came from ince, and the economies of both provinces flour- two factors. ished because of their status as the hinterland for First, the Pudong Area Development scheme Shanghai (See Part III). was launched in Shanghai. A previously undevel- Second, the renewed acceleration of the reform oped area on the east side of the Huangpu River and open-door policy provided additional impetus was turned into a trade and finance center and for the shift to offshore operations on the part of modern housing area. The project had been pro- foreign companies. posed by Shanghai Government itself as a way of During the late 1980s and early 1990s, the cen- revitalizing the city(13). tral government maintained a tight macroeconom- Interestingly, the Central Government contin- ic stance and was reluctant to expand its open- ued to promote the development of Pudong even door measures. This cautious stance was prompt- after it had approved the project in 1990. This was ed by a steep inflationary trend triggered by the because the central government had started to be- rapid pace of reform and open-door measures. It come keenly aware that the development of Pu- was also a response to political and social unrest, dong would give Shanghai the potential to drive as symbolized by the Tiananmen Square incident development in the Yangtze Delta and throughout of June 1989. the Yangtze Basin. For example, then General However, Deng Xiaoping, who was then the Secretary Jiang Zemin stated at the 14th National most powerful man in China, became increas- Congress of the CCP (in 1992) that the govern- ingly concerned about the economic stagnation ment intended to make the development and open- that inevitably resulted from this stance. During ing of the Pudong district of Shanghai the nucleus a tour of southern China in January and February of a program that would also include the estab- 1992, he stated in his “speeches during a visit to lishment of more open cities along the Yangtze the south” that China should accelerate its reform river and the rapid development of Shanghai as an and open-door line, even if that meant accepting international economic, financial and trade center reasonable risks. The CCP did an about-face and that would trigger a new phase of economic pros- began to accelerate market Chinas’ transition to a perity by acting as a driving force for the Yangtze market economy basis by implementing measures Delta and the entire Yangtze Basin. designed to encourage foreign investment inflows. The central government and the Shanghai Mu- Measures affecting the Shanghai economic sphere nicipal government shared this vision of the de- included the establishment of the China-Singapore velopment of Shanghai (the Pudong district) as a Suzhou Industrial Park in 1994 under an agree- finance and trade center. The scope of open-door ment with the government of Singapore. policies implemented during this period was wid- Japanese companies were meanwhile mov- er than in the 1980s. For example, bonded areas ing more and more of their production operations were established in Pudong, and foreign-owned offshore to counter the effects of the rising value financial institutions were allowed to open of- of the yen in the wake of the Plaza Accord. This fices there. In 1990, the Shanghai Stock Exchange trend began in labor-intensive industries, notably opened its doors in Pudong and began to function the textile industry. Eventually companies across as China’s biggest stock market(14). The Port of the entire manufacturing sector, and more recently Shanghai meanwhile grew into one of the world’s even those in tertiary industries such as retailing leading ports in terms of cargo volumes and was and finance, would begin to see China—especially soon the biggest in the world based on simple Shanghai, Jiangsu Province and Zhejiang Prov-
RIM Pacific Business and Industries Vol. IX, 2009 No. 33 11 ince—as important locations for their business was renamed the Yangtze Delta City Economic strategies. This shift was motivated not only by Cooperation Forum. This organization is still in the need to reduce production costs, but also by existence today. It has a permanent secretariat and the desire to develop consumer markets. functions as a forum for regular meetings among In 1990, the Taiwanese government lifted its major cities in the Shanghai economic sphere. Ac- ban on investment in China through third coun- cording to explanatory articles on the official Xin- tries and regions, and Taiwanese companies huanet site and other sources, the meetings were stepped up their development of business opera- initially held every two years but have been con- tions in China. Compared with alternative regions, vened annually since 2004. China was seen as offering better growth potential This growth in cooperation among key cities ap- as a market and a deeper pool of engineers. These pears to have prompted the signing of a number of factors, together with the easing of Taiwan’s re- agreements, including an agreement on closer co- strictions on high-tech investment in China, led operation on customs clearance systems in Shang- Taiwanese capital to establish large number of hai, Jiangsu Province and Zhejiang Province, and contract manufacturing facilities for notebook an agreement between Shanghai and Hangzhou computers and semiconductors between Shang- City, Zhejiang Province covering cooperation in hai and Suzhou. The presence of these facilities seven areas, including the Shanghai Expo, infra- attracted related companies from other countries structure development and environmental protec- into the region, further raising the profile of the tion. Both agreements were signed in 2007. The Shanghai economic sphere as an area with a high Yangtze Delta City Economic Cooperation Forum concentration of electrical and electronic indus- has created a number of cooperation frameworks, tries (Seki, M. [2005], Mukoyama, H., Sano, J. including structures to promote cooperation [2007]). among mayors and in specific sectors. According to Akinori Myoi [2008] it has contributed to better (3) 2000s: Formation and Implementation of understanding and communication among Shang- Frameworks for Economic Development hai, Jiangsu Province and Zhejiang Province. In the early 2000s, the emphasis was on the During this process, major cities in the Shang- continuation of existing policies, notably the Pu- hai economic sphere (Shanghai and two provinc- dong development scheme. However, as the gov- es) began to form frameworks for cooperation and ernment began to formulate the 11th 5-Year Plan consultation. As early as the 1980s, there were (2006-2010), central and regional governments forums for city leaders (mayors) and managers both adopted policy programs and concepts that in the Yangtze Basin. For example, an economic defined the future direction of development in cooperation forum for key cities along the Yang- the Shanghai economic sphere. In the 11th 5-Year tze began to hold meetings in 1985. However, its Plan, the central government specifically referred membership was wide-ranging and even included to the Yangtze Delta as a region with a highly de- cities in the middle reaches of the Yangtze, such veloped group of cities, ranking it alongside the as Chongqing and Wuhan. As a result, there were Pearl River Delta area and the Beijing-Tianjin-He- not sufficient opportunities for discussions of co- bei Province area. It also called for the strength- operation limited to specific regions, such as links ening of the Yangtze Delta’s economic traction among major cities in Shanghai Municipality, Ji- potential, and for the improvement of overall angsu Province and Zhejiang Province. competitiveness through divisions of labor and in- There were further initiatives in the 1990s. dustrial cooperation among the cities. In 1992, a conference of sector leaders from 14 In August 2008, the Executive Meeting of the Yangtze Delta cities was held as a forum for the State Council, which consists of senior minis- discussion of inter-city cooperation. When Tai- ters, adopted a “guidance opinion” on reform and zhou City in Jiangsu Province joined in 1997, it open-door measures and increased economic and
12 RIM Pacific Business and Industries Vol. IX, 2009 No. 33 social development in the Yangtze Delta region. emphasis from quantity to quality in its policies This opinion, which was made public in Septem- on the solicitation of foreign investment. Lianyun- ber, defined the Yangtze Delta as the region that gang City in Jiangsu Province has announced that includes Shanghai Municipality, Jiangsu Province it will cooperate more closely with Shanghai on and Zhejiang Province. In China the Yangtze Del- port-related policies. Huaian City, also in Jiangsu, ta is normally defined as consisting of 16 major has indicated that it will accept industries relocat- cities in Shanghai, Jiangsu Province and Zhejiang ed from major cities in the Yangtze Delta. Province. However, the opinion included no ex- ceptional provisions and also encompassed initia- tives targeting municipalities other than the 16 cit- III. Geographical Expansion and ies, including the development of Lianyungang in Rising Added Value in the Jiangsu Province, and the expansion of small and Shanghai Economic Sphere medium-sized cities. The opinion also included three major goals for As shown in Part I, the GRP of the Shanghai the future development of the region: (1) the de- Economic Sphere has risen from 16.6% of the to- velopment of internationally competitive world- tal for China in 1990 to 19.6% in 2000 and 22.0% class cities, (2) the establishment of key interna- in 2007. Per capita GRP has meanwhile soared tional gateways in the Asia-Pacific region, and (3) from $533 in 1990 to $1,727 in 2000 and $5,128 the establishment of production centers for the in 2007. According to the World Bank definitions world’s advanced manufacturing industries. These cited earlier in this article, the Shanghai Econom- goals reflect the government’s determination to ic Sphere has advanced from the level of a low- support the development of Shanghai, Jiangsu income country to that of a lower middle-income Province and Zhejiang Province. and then a higher middle-income country over a In 2009, the Executive Meeting of the State period of less than 20 years. Council has announced concepts calling for However, the Shanghai Economic Sphere, Shanghai’s evolution into a world finance and which centers on Shanghai Municipality, cov- trade center. For example, on March 25, the Stand- ers an area with a population of 140 million, and ing Committee adopted an opinion “Concerning the economic growth has not occurred uniformly the Construction of an International Finance Cen- throughout this region. In Part III we will examine ter and Shipping Center in Shanghai,” as referred the way in which the Shanghai Economic Sphere to in the guidance opinion. This opinion identified has expanded. We will also examine regional vari- five priorities for Shanghai’s development as an ation in the added value of manufacturing, servic- international finance and shipping center by 2020, es and other activities. To ascertain the geographi- including further opening up of the financial sec- cal extent of Shanghai Economic Sphere, we tor to foreign participation, and increased coop- divided Jiangsu Province and Zhejiang Province eration among ports in the Yangtze Delta(16). into prefecture-level cities(17). We also included In April, Shanghai was designated as a model Anhui Province, which adjoins Jiangsu Province city for yuan-denominated trade settlements, and Zhejiang Province, in the survey. alongside Shenzhen and three other cities in The area examined in Part III consists of Shang- Guangdong Province, and measures were imple- hai and 42 prefecture-level cities, of which 13 are mented to achieve this goal. In addition to Shang- Jiangsu Province, 11 in Zhejiang Province and 17 hai, Jiangsu Province and Zhejiang Province have in Anhui Province (Fig. 2). also launched their own initiatives. The municipal government of Shanghai has ad- (1) Geographical Expansion opted a ordinance stipulating measures to facili- tate the construction of an international finance We will begin our analysis of the characteristics center in Shanghai. It has also signaled a shift in of the Shanghai Economic Sphere by looking at
RIM Pacific Business and Industries Vol. IX, 2009 No. 33 13 Fig. 2 Administrative Divisions in Shanghai Municipality, Jiangsu Province, Zhejiang Province and Anhui Province (Prefecture-Level Cities)
1 Shanghai Municipality
Jiangsu Province Anhui Province 7 2 Nanjing 26 Hefei 4 3 Wuxi 27 Huainan 13 Jiangsu Province 4 Xuzhou 28 Bengbu 29 Wuhu 34 5 Suzhou 36 8 9 6 Nantong 30 Huangshan 31 Maanshan 42 7 Lianyungang 8 Huaian 32 Anqing 39 28 9 Yancheng 33 Tongling 10 Yangzhou 34 Huaibei 27 10 35 12 11 Zhenjiang 35 Chuzhou 12 Taizhou 36 Suzhou 11 6 13 Suqian 37 Chizhou 26 Anhui Province 2 14 Changzhou 38 Xuancheng 39 Fuyang 14 40 3 Zhejiang Province 40 Liuan 41 31 41 Chaohu 29 5 1 15 Hangzhou 42 Bozhou 33 Shanghai 16 Ningbo 19 18 17 Wenzhou 32 18 Jiaxing 38 37 19 Huzhou 23 20 Shaoxing 21 Jinhua 30 15 16 20 22 Quzhou 23 Zhoushan Yangtze 24 Taizhou River 25 Lishui 21 22 24 Zhejiang Province
25
17
per capita GRP. Fig. 3 traces changes in per capita number of regions could be classed as belonging GRP between 2000 and 2007. The different tones to the Shanghai Economic Sphere, and income of shading represent areas where per capita GRP levels remained low in other areas. is less than 10,000 yuan (approximately $1,500), Subsequent economic development was ac- 10,000 yuan or higher but less than 20,000 yuan companied by the geographical expansion of the (approximately $3,000), 20,000 yuan or higher Shanghai Economic Sphere. By 2007, the num- but less than 40,000 yuan (approximately $6,000) ber of prefecture-level cities with per capita GRP and 40,000 yuan or higher. above 20,000 yuan had risen to 18 out of a total of In 2000, the only areas where per capita GRP 24 prefecture-level cities in Jiangsu Province and was over 20,000 yuan were Shanghai and three Zhejiang Province. Furthermore, per capita GRP prefecture-level cities: Wuxi (Jiangsu Province), had risen above 40,000 yuan in eight cities, in- Suzhou (Jiangsu Province) and Hangzhou (Zhe- cluding Shanghai itself and seven prefecture-level jiang Province). There was nowhere in the region cities (Wuxi, Suzhou, Hangzhou, Changzhou, with per capita GRP in excess of 40,000 yuan. Per Nanjing, Ningbo, Shaoxing). Income was espe- capita GRP was below 10,000 yuan in nine of the cially high in Shanghai (65,600 yuan), Suzhou 24 prefecture-level cities in Jiangsu Province and (64,600 yuan)and Wuxi (64,400 yuan). Zhejiang Province, and in 15 prefecture-level cit- As shown in Fig. 3, the upward trend in per ies in Anhui Province, where the only exceptions capita GRP has spread out laterally from Shang- were Maanshan and Tongling. Only a limited hai to the north, west and south. According to
14 RIM Pacific Business and Industries Vol. IX, 2009 No. 33 Fig. 3 Per Capita GRP in the Shanghai Economic Sphere
2000 2007
7 7 4 4 13 13 Jiangsu Province 34 36 8 9 Jiangsu Province 34 36 8 9 42 42 39 28 39 28 27 10 27 10 35 12 35 12 6 6 26 11 26 11 2 2 40 14 40 14 41 31 3 41 31 3 29 5 1 29 5 1 33 Shanghai Municipality 33 Shanghai Municipality 32 19 18 32 19 18 38 38 37 37 Anhui Province 23 23 30 15 16 Anhui Province 30 15 16 20 20
21 21 22 22 24 24
25 25 Zhejiang Province Zhejiang Province 17 17
40,000 yuan or higher 20,000 or higher, less than 40,000 yuan 10,000 or higher, less than 20,000 yuan Less than 10,000 yuan Source: Statistical yearbooks for each province
Richard Florida [2008], the capacity to drive the tze Delta to include all prefecture-level cities in Ji- world economy is a characteristic not of a megac- angsu Province and Zhejiang Province. However, ity, which drives expansion in the area around a the economic level of five prefecture-level cities single city, but rather a megaregion, which is an in northern Jiangsu Province is low, even though expanding economic sphere in which a core city their per capita GRP is above 10,000 yuan, indi- absorbs other cities. The area centering on Shang- cating that these cities may have been left behind hai, where per capita GRP has risen above 20,000 by the development occurring in surrounding ar- yuan, has become an economic sphere that clearly eas. (This aspect will be reexamined in Part IV.) merits classification as a megaregion. According While Anhui Province includes prefecture-level to United Nations statistics, this area has 17 cities cities where per capita GRP is above 20,000 yuan, with populations in excess of 1 million. the areas of Jiangsu Province and Zhejiang Prov- Of particular interest is the fact that the area ince that remain after prefecture-level cities with has spread to Maanshan and Tongling in An- per capita GRP below 20,000 yuan are excluded hui Province, where per capita GRP has risen to (Shanghai and 22 prefecture-level cities) have a 41,900 yuan and 39,800 yuan respectively. For the total population approximately 20 million smaller purposes of this article, the Shanghai Economic than that of the Shanghai Economic Sphere at Sphere has been defined as consisting of Shang- 121.87 million, but the per capita GRP of these ar- hai, Jiangsu Province and Zhejiang Province. eas is about 5,000 yuan higher at 44,100 yuan (ap- However, these other two cities should perhaps proximately $5,800). If the scope is further nar- also be included. As noted in Part II, the Chinese rowed to areas with per capita GRP above 30,000 government aims to expand the scope of the Yang- yuan (Shanghai and a total of 14 prefecture-level
RIM Pacific Business and Industries Vol. IX, 2009 No. 33 15 cities), the population shrinks to 83.26 million, Fig. 4 Industrialization Ratios for Shanghai, Jiangsu Province and but per capita GRP is about 8,000 yuan higher at Zhejiang Province 51,700 yuan (approximately $6,800). (%)
(2) Manufacturing and Service Industry De- 70 velopment and Geographical Characteris- 65
tics 60 55 The development and geographical expansion 50 of the Shanghai Economic Sphere has been driven 45 by industrialization. In 2000, the industrialization 40 ratio (the percentage contribution of manufactur- 35 (18) ing industries to GRP ) for the Shanghai Eco- 30 nomic Sphere was already high at 50.9%, and by 1990 94 98 2002 06 2007 it had risen to 53.1%. Over the same period, (Calendar years) the Shanghai Economic Sphere’s share of total Shanghai Jiangsu Province Zhejiang Province All of China manufacturing activity in China has increased from 21.8% to 24.1%. Notes: The ratios were calculated as the contributions of manufacturing industries to GRP (GDP). A more detailed analysis reveals that the in- Source: Shanghai Statistical Yearbook, Jiangsu Statistical dustrialization ratio for Shanghai itself is falling, Yearbook, Zhejiang Statistical Yearbook, etc. while the ratios for Jiangsu Province and Zhejiang Fig. 5 Crude Steel Production Province are rising. This indicates that the focus of manufacturing activity is shifting from Shang- (Millions of tons) hai to Jiangsu Province and Zhejiang Province 80
(Fig. 4). 70 For example, crude steel production has re- 60 mained basically static in Shanghai but has ex- panded dramatically in Jiangsu Province. Jiangsu 50 Province is replacing Shanghai as the region’s 40 main center for steel production (Fig. 5). 30 The Shanghai Economic Sphere is the main 20 driver of chemical fiber production in China. The 10 production shares of Jiangsu Province and Zhe- 0 jiang Province continue to rise, and in 2007 the 1990 93 96 99 2002 05 (Calendar years) Shanghai Economic Sphere accounted for almost Shanghai Jiangsu Province Zhejiang Province 80% of China’s total output (Fig. 6). In 1990, Shanghai and Jiangsu Province were by far the Source: China Statistical Yearbook (various years) biggest producers, accounting for around 40% of total production in China. Shanghai’s output has in China are made in the Shanghai Economic risen only gradually since that time, but there has Sphere (Fig. 7). Shanghai’s share of production been significant growth in Jiangsu Province and has fallen from 40.7% in 2000 to 21.6% in 2007, Zhejiang Province. In 2007, Zhejiang Province while that of Jiangsu Province has risen. However, accounted for 40.3% of China’s total output and Shanghai is still the second biggest producer and Jiangsu Province for 34.5%. Together, the two remains a major production center. provinces produced 75% of China’s total chemical This shift in the focus of manufacturing activity fiber output. from Shanghai to Jiangsu Province and Zhejiang Around 60% of all integrated circuits produced Province has been accompanied by an improve-
16 RIM Pacific Business and Industries Vol. IX, 2009 No. 33 Fig. 6 Chemical Fiber Production Industrialization has made a major contribu-
(Millions of tons) (%) tion to economic development in Maanshan, An- 20 90 hui Province. Other cities with high added value 18 80 figures include Tongling and Wuhu. This indi- 16 70 cates that the upward trend in added value result- 14 60 ing from industrialization is spreading westwards 12 50 along the Yangtze. 10 40 There have also been interesting developments 8 30 6 in the service sector. While China as a whole is 4 20 still in the midst of the industrialization process, 2 10 the Shanghai Economic Sphere has already start- 0 0 ed to evolve into a service-based economy. The 1990 93 96 99 2002 05 (Calendar years) added value generated by service industries has Zhejiang Province Jiangsu Province risen from 28.4% of GRP of Shanghai Economic Shanghai Share (right-hand scale) Sphere in 1990 to 40.0% in 2000 and 41.7% in Notes: Share = (production in Shanghai + Jiangsu Prov- 2007. At the national level, the contribution has ince + Zhejiang Province)/total national production Source: China Statistical Yearbook (various years) climbed from 15.0% to 20.1% and 22.8% over the same period. In developing countries, the shift to a service- Fig. 7 Integrated Circuit Production based economy does not always signify a transi- tion to an industrial structure with higher added (Billions of units) (%) value. This is particularly true in cities in develop- 28 70 ing countries in which the economy is dominated 24 60 by the informal sector. In such environments, add- 20 50 ed value remains low despite the shift to a service-
16 40 based economy. However, the evolution of the Shanghai Eco- 12 30 nomic Sphere into a service-based economy has 8 20 also brought a rise in added value. The per capita 4 10 added value of service sector workers has risen 0 0 from 36,000 yuan in 2000 to 76,000 yuan in 2007, 2000 01 02 03 04 05 06 07 and the 2007 figure is equivalent to 1.9 times the (Calendar years) Zhejiang Province Jiangsu Province national average. This rise in added value has Shanghai Share (right-hand scale) been especially conspicuous in service industries in Shanghai. In 1999, the added value of service Notes: Share = (production in Shanghai + Zhejiang Prov- ince + Jiangsu Province)/total national production industries exceeded that of manufacturing indus- Source: China Statistical Yearbook (various years) tries, and the service sector accounted for over one-half of GRP. In 2008 the service sector con- ment in Shanghai’s industrial productivity. In tributed 53.7% of GRP, compared with a 45.5% 2007, Shanghai led in terms of the per capita add- contribution from the manufacturing sector (Fig. ed value of its manufacturing work force (165,700 9). yuan). This is significantly higher than the The sectors that are achieving conspicuous 143,100 figure for Maanshan (Anhui Province), growth in Shanghai are finance, transportation and which was ranked second. Tongling (Anhui Prov- distribution. Shanghai’s stock market is the big- ince) was in third place at 129,500 yuan, while gest in China and ranks second in Asia after Tokyo the cities of Wuxi and Suzhou in Jiangsu Province in terms of trading volume. There is also substan- were ranked fourth and fifth respectively (Fig. 8). tial trading in gold and diamonds. The GRP of the
RIM Pacific Business and Industries Vol. IX, 2009 No. 33 17 Fig. 8 Per Capital Added Value of Manufacturing Employed Workforce (2007)
7 4 13 34 36 8 9 Jiangsu Province (thousands of yuan/person) 42 180 39 28 27 10 160 35 12 6 140 26 11 2 120 40 14 41 31 3 100 29 5 1 33 Shanghai Municipality 80 32 19 18 38 37 60 23 Anhui Province 30 15 40 20 16 20 21 22 0 24
25 Zhejiang Province Wuxi (J) Wuxi Hefei (A) Hefei Liuan (A) Wuhu (A) Wuhu 17 Jinhua (Z) Shanghai Suqian (J) Huaian (J) Jiaxing (Z) Lizshui (Z) Ningbo (Z) Anqing (A) Nanjing (J) Suzhou (J) Xuzhou (J) Taizhou (J) Taizhou Fuyang (A) Fuyang Taizhou (Z) Taizhou Huaibei (A) Huzhou (Z) Bozhou (A) Suzhou (A) Bengbu (A) Bengbu Quzhou (Z) Chaohu (A) Nantong (J) Chizhou (A) Tongling (A) Tongling Huainan (A) Chuzhou (A) Shaoxing (Z) Shaoxing Wenzhou (Z) Wenzhou Yancheng (J) Yancheng (J) Yangzhou Zhenjiang (J) Zhoushan (Z) Hangzhou (Z) Maanshan (A) Changzhou (J) Xuancheng (A) Huangshan (A) 100,000 yuan or higher Lianyungang (J) Lianyungang 70,000 yuan or higher but less than 100,000 yuan 40,000 yuan or higher but less than 70,000 yuan Notes: A: Anhui Province, Z: Zhejiang Province, J: Jiangsu Province Source: Compiled using data from statistical yearbooks for each province (various years)
Fig. 9 Shanghai’s Evolution as a 7). At 560,000 yuan, per capita added value in the Service-Based Economy financial sector is over four times higher than the service industry average. Other service industries (%) that now play a core role in the Shanghai Eco- 70 nomic Sphere include transportation, distribution, 65 telecommunications and business services. 60 There have also been changes in the distribu- 55 tion sector as a result of the rapid expansion of 50 consumer markets. One example is the rapid pro- 45 liferation of supermarkets and convenience stores.
40 The number of outlets operated by retail chains
35 has risen from 28,000 in 2005 to 45,760 in 2007. This total, which is equivalent to 31.5% of the 30 1990 95 2000 05 national total, breaks down into 16,470 outlets in (Calendar years) Shanghai manufacturing Shanghai, 11,778 in Jiangsu Province and 17,512 Shanghai service industries in Zhejiang Province.
Notes: Each sector’s contribution is calculated as a per- An analysis of the geographical distribution of centage of GRP. per capita added value in service industries shows Source: Shanghai Statistical Yearbook, China Statistical Abstract (2009) that Suzhou (Jiangsu Province) leads at 138,200 yuan, followed by Wuxi (Jiangsu Province) at financial sector has risen from 66.7 billion yuan 136,100 yuan and Shanghai at 125,000 yuan. Lev- in 2000 to 120.9 billion in 2007. Over the same els in these three adjoining areas are substantially period, the number of people employed in the sec- higher than in other regions. In contrast with man- tor has increased from 100,000 to 220,000 (Table ufacturing industries, the geographical expansion
18 RIM Pacific Business and Industries Vol. IX, 2009 No. 33 in the service sector has followed a north-south in the Shanghai Economic Sphere. However, it is direction (Fig. 10). also apparent that the Shanghai Economic Sphere does not encompass the entire areas of Jiangsu (3) Limits of Geographical Expansion Result- Province and Zhejiang Province. Even in Jiangsu ing from Migration Province and Zhejiang Province, there are still ar- eas where per capita GRP is below 20,000 yuan. As noted earlier in this article, an analysis fo- Interestingly, while income levels in Anhui Prov- cusing on prefecture-level cities has confirmed ince are low in terms of provincial statistics, there that the geographical area in which income lev- are prefecture-level cities close to Shanghai where els are high in real terms is expanding laterally GRP is rising rapidly.
Table 7 The Growth of the Service Sector in Shanghai
Service GRP Employed Population Per Capita GRP of Working Population (billions of yuan) (thousands) (thousands of yuan) 2000 2004 2007 2000 2004 2007 2000 2004 2007 Transportation and distribution 31.5 49.4 72.3 370 480 500 86 103 145 Wholesaling and retailing 48.5 74.5 107.8 1,060 1,260 1,320 46 59 82 Hotels and restaurants – 15.1 21.9 – 230 250 – 65 88 Finance 66.7 61.2 120.9 100 160 220 664 385 560 Real estate 25.2 66.6 80.7 90 290 310 270 230 256 Leasing and business services Others 58.5 142.9 237.2 2,100 2,120 2,530 28 67 94
Total 230.4 409.7 640.9 3,720 4,540 5,130 62 90 125
Source: Shanghai Statistical Yearbook
Fig. 10 Per Capita Added Value of the Service Sector Working Population (2007)
7 4 13 34 36 8 9 Jiangsu Province (thousands of yuan/person) 42 150 39 28 140 27 10 130 35 12 120 6 26 11 110 2 100 40 14 90 41 31 3 80 29 5 1 70 33 Shanghai Municipality 32 19 18 60 38 50 37 23 40 30 15 16 30 20 20 Anhui Province 10 21 0 22 24
25 Zhejiang Province Wuxi (J) Wuxi Hefei (A) Hefei Liuan (A) Wuhu (A) Wuhu Jinhua (Z) Shanghai Suqian (J) Huaian (J) Jiaxing (Z) Lizshui (Z) Anqing (A) Nanjing (J) Suzhou (J) Xuzhou (J) Taizhou (J) Taizhou
Fuyang (A) Fuyang 17 Taizhou (Z) Taizhou Ningbo (Z) Huzhou (Z) Huaibei (A) Suzhou (A) Bozhou (A) Bengbu (A) Bengbu Quzhou (Z) Chaohu (A) Nantong (J) Chizhou (A) Tongling (A) Tongling Huainan (A) Shaoxing (Z) Shaoxing Wenzhou (Z) Wenzhou Yangzhou (J) Yangzhou (J) Yancheng Zhenjiang (J) Chuzhou (A) Zhoushan (Z) Hangzhou (Z) Maanshan (A) Changzhou (J) Xuancheng (A) Huangshan (A)
Lianyungang (J) Lianyungang 100,000 yuan or higher 70,000 yuan or higher but less than 100,000 yuan 40,000 yuan or higher but less than 70,000 yuan Source: Compiled using data from statistical yearbooks for each province (various years)
RIM Pacific Business and Industries Vol. IX, 2009 No. 33 19 We also need to examine the geographical ex- Fig. 11 Average Yearly Population Growth Rates (2000-2007) pansion of the Shanghai Economic Sphere from a demographic perspective. As described in Part I, the population inflow into the Shanghai Economic 7 Sphere between 2000 and 2005 is estimated at 4 11.37 million. Migration data are not published 13 34 36 8 9 for individual prefecture-level cities, so this analy- 42 Jiangsu Province sis will be based on average yearly rates of in- 39 28 27 10 crease in the resident populations of Shanghai and 35 12 6 prefecture-level cities in Jiangsu Province, Zheji- 26 11 2 ang Province and Anhui Province. 40 14 3 41 31 In general, cities where rapid development is 29 5 1 occurring, such as Shanghai and Suzhou, tend to 33 Shanghai Municipality 32 19 18 38 have low birthrates, and without population in- 37 23 flows there population growth rates would prob- Anhui Province 30 15 16 ably be low also. In areas where the pace of devel- 20 opment is slower, birthrates tend to be relatively 21 22 high. Without population outflows, these areas 24 would be expected to have relatively high popula- 25 tion growth rates. Zhejiang Province 17 However, an analysis of the geographical dis- tribution of population growth rates produces the 2%~ 1~2% exact opposite results (Fig. 11). In the area around ~1% Shanghai, where income levels are high, the aver- age yearly population growth rate is over 2%. In Suzhou, the growth rate is above 3%. In contrast, age group. The economic development occurring Anhui Province and northern Jiangsu Province, in the Shanghai Economic Sphere has spread to where income levels are low, have low popula- some areas of Anhui Province, but this phenom- tion growth rates, and populations are actually in enon is unlikely to encompass the entire province. decline in eight prefecture-level cities in northern A similar pattern appears to be occurring within Jiangsu Province. Jiangsu Province. While detailed surveys would be needed to con- Five prefecture-level cities in northern Jiangsu firm these findings, we can conclude that the most Province have per capita GRP below 20,000 yuan important factor involved is extremely large-scale and are also experiencing population declines. migration from low-income regions into high-in- Significant depopulation appears to have occurred come centers. This migration is likely to influence in the region. It is possible that the Shanghai Eco- the future geographical expansion of the Shanghai nomic Sphere will not even be able to encompass Economic Sphere. The following analysis is based the whole of Jiangsu Province. Although only four on the example of Anhui Province, which was the prefecture-level cities in Anhui Province are ex- source of approximately 30% (4 million people) periencing population declines, many prefecture- of the population inflow into the Shanghai Eco- level cities have population growth rates below nomic Sphere(19). 1%. Since Anhui Province has a relatively high Fig. 12 shows the population pyramids for An- birthrate, this means that migration is playing a hui Province and the Shanghai Economic Sphere. significant role. The Shanghai Economic Sphere In Anhui Province, the number of young workers may be approaching the limits of its geographical aged 20-34 is extremely low, indicating that there expansion. has been large-scale outward migration in that
20 RIM Pacific Business and Industries Vol. IX, 2009 No. 33 Fig. 12 Demographic Structures of Anhui Province and the Shanghai Economic Sphere (2005)
Anhui Province Shanghai Economic Sphere (Thousands of people) (Thousands of people) Males Age Females Males Age Females 100+ 100+ 95-99 95-99 90-94 90-94 85-89 85-89 80-84 80-84 75-79 75-79 70-74 70-74 65-69 65-69 60-64 60-64 55-59 55-59 50-54 50-54 45-49 45-49 40-44 40-44 35-39 35-39 30-34 30-34 25-29 25-29 20-24 20-24 15-19 15-19 10-14 10-14 5-9 5-9 0-4 0-4 4,000 3,000 2,000 1,000 0 0 1,000 2,000 3,000 4,000 8,000 6,000 4,000 2,000 0 0 2,000 4,000 6,000 8,000 Notes: Based on 1% survey Source: Compiled using data from a 1% national population sampling survey in 2005.
IV. Prospects and Challenges Korea, Taiwan, Thailand and Malaysia, slid into for the Shanghai Economic negative figures, is an indication of the region’s Sphere strong growth potential. Reasons for this strength include the strong growth potential of domestic The Shanghai Economic Sphere forms an eco- demand in the Shanghai Economic Sphere, and nomic area that should be viewed as a national its strong economic relationships with other re- economy in its own right, but assessments need to gions that have maintained high growth. When the be based on indicators different from those used world economy starts to recover, there is a strong at the national level. The area is expanding, and possibility that the Shanghai Economic Sphere added value is increasing rapidly in the core of the will emerge as a mega-region with the potential to region. drive the world economy. Some of the characteristics that differentiate the As noted in Part III(3), however, it will proba- Shanghai Economic Sphere from other regions bly become increasingly difficult for the Shanghai have also made it more vulnerable to fluctuations Economic Sphere to maintain its price competi- in the world economy. It has been severely affect- tiveness by importing labor from other provinces. ed by the increasingly serious economic downturn In this sense, the region’s ability to achieve sus- that began in the autumn of 2008. In the January- tainable economic development will depend to March quarter, Shanghai’s exports declined by a large extent on the improvement of the added 20.5% compared with same period in 2008, and value of its industries. Jiangsu Province and Zhejiang Province recorded On April 29, 2009, the State Council published declines of 23.2% and 15.4% respectively. This the full text of its opinion on “Accelerating the caused the real GDP growth rates for Shanghai Development of Modern Service Industries and and Zhejiang Province to fall to 3.1% and 3.4% Advanced Manufacturing Industries and the Es- year respectively in the January-March quarter, tablishment of an International Financial Center compared with the national average of 6.1%. (Ji- and Shipping Center in Shanghai” (the official angsu Province maintained a high growth rate of name of the aforementioned opinion “Concern- 10.2%.). ing the Construction of an International Finance Yet the fact the Shanghai Economic Sphere Center and Shipping Center in Shanghai”). This maintained positive growth rates while other heav- opinion calls for the construction, by 2020, of an ily export-dependent economies, such as South international finance center and an international
RIM Pacific Business and Industries Vol. IX, 2009 No. 33 21 shipping center commensurate with the real poten- The determination of the current administration tial of the Chinese economy and the international to ensure the success of the Expo is reflected in status of the renminbi. the composition of the Organizing Committee. The urban economist Saskia Sassen has identi- The committee is chaired by Vice-Premier Wang fied four functions for mega-cities in a globalized Qishan, who is also a member of the Political world. The first is the ability to act as control tow- Bureau of the CPC Central Committee. Other ers for global businesses, including multination- members include senior officials of the Shanghai als. The second is the provision of advanced, spe- CPC and government, and vice-ministers of vari- cialized services, including financial services. The ous central government ministries. China aims to third is the capacity to accelerate innovation. And set new records by attracting 70 million visitors the fourth is the existence of markets to consume to view exhibits by 200 countries, regions and in- these goods and services (Sassen, S. [2001]). ternational organizations. A successful Expo will Although we can conclude that Shanghai is provide China with an excellent opportunity to evolving from the hub of the world’s factory into showcase the prosperity of Shanghai, which will a global city, the initiatives needed to drive that host the event, and Jiangsu Province and Zhejiang transition have barely begun. The concept of de- Province, which have expanding economic links veloping Shanghai into an international financial to Shanghai. The theme for the Expo will be “Bet- center has met with persistent criticism about Chi- ter City, Better Life.” There will be keen interest na’s closed financial systems. There are also inad- in the ways in which Shanghai is presented to the equacies in the legal system. Furthermore, Inagaki world as an attractive city. [2009] reports that despite a rapid increase in the financial sector work force, there is still a shortfall End Notes of around 1 million people. On April 29, the National Development and Re- 1. In addition to the Shanghai economic sphere, there form Commission responded to these issues by are also spheres centering on Beijing, Changchun, Chengdu, Chongqing, Dalian, Guangzhou, Hanghou, identifying four measures relating to Shanghai’s Harbin, Jinan, Nanjing, Qingdao, Shenyang, Shijiaz- development as an international financial center: huang, Shantou, Taiyuan, Wuhan and Xian (Gao et al. (1) the establishment of minimally regulated mar- [2008], Pp.9-10). ket mechanisms; (2) the development of inter- nationally competitive financial systems; (3) the 2. This estimate assumes that the Shanghai economic sphere will maintain an average annual growth rate of training of specialists in a wide range of fields; 11%, and that the growth rates for Tokyo and New York and (4) the development of a legal system capable will average 2% in the period to 2018. of accommodating the demand for economic de- velopment. 3. World Bank, World Development Indicators 2009, p.xxi If Shanghai can evolve into a global city, it will be able to obtain not only technology and 4. Bulletin figures indicate that the GRP of the Shanghai economic sphere reached $943.1 billion in 2008, sur- capital, but also human resources in international passing South Korea’s GNP of $930.3 billion. markets. One of the keys to survival in competi- tion with other cities in a global era will be the 5. At a motor show held in Shanghai in late April, wealthy ability to attract talented human resources from individuals bought 19 of the latest Porsche model, the other countries. In addition to efforts to strengthen Panamera (approximately $300,000), in the first 30 Shanghai’s own competitiveness, it will also be minutes of trading. Most of the buyers came from Zhe- jiang Province. (See Wu J. [2009], p.26) necessary to improve Shanghai’s image in other countries. The Shanghai Expo scheduled for 2010 6. China’s per capita GNI is $2,370. When converted us- will play an important role from this perspective. ing purchasing power parity rates, this is equivalent to Like the Beijing Olympic Games, the Shang- $5,420 (World Development Indicators, p.14) hai Expo is regarded as a major national event.
22 RIM Pacific Business and Industries Vol. IX, 2009 No. 33 7. If the purchasing power of rural areas is added to that 16. The five priorities are (1) the establishment of multi- of urban areas, the number of color televisions owned functional and multi-tiered financial systems (including in the Shanghai economic sphere increased by 28 mil- systems to facilitate opening to foreign participation), lion units between 2000 and 2007. The corresponding (2) the modernization of shipping systems and the ex- increases for refrigerators, washing machines and mo- pansion of cooperation among ports in the Yangtze del- bile telephones were 12 million, 37 million and 62 mil- ta, (3) development through complementation between lion respectively. manufacturing and service industries, (4) the reform of corporate and government administration, and (5) 8. Evidence for this includes the fact that the system was the development of cooperative relationships between initially maintained in three direct-controlled munici- Shanghai and the Yangtze Delta and other cities in palities, including Shanghai, during the decentralization China, including Hong Kong, in order to build on their of fiscal policy to the regions. Sources that describe the respective strengths. contemporary fiscal situation and the decentralization process include Miyake, S. [2006]. 17. For the purposes of this article, Shanghai (a direct-con- trolled municipality) was treated as a separate entity. 9. However, while the 15% concessional tax rate was While Shanghai has the same administrative status as available to all foreign-owned companies established in a province, it is more appropriate in terms of popula- special economic zones, in economic and technology tion and GRP to compare it with prefecture-level cities. development zones established in coastal open cities it This approach also facilitates the task of ascertaining was limited to manufacturing enterprises and did not the expansion of the economic sphere. include foreign-owned companies involved in com- merce. Import tariff exemptions were also limited in 18. To avoid complexity and facilitate comparisons, sec- scope compared with those available in the special eco- ondary industries are referred to in this article as “man- nomic zones (JETRO website, etc.). Current incentive ufacturing industries” and tertiary industries as “service measures are not examined in this article. industries.”
10. Some prefectures that are administered by city govern- 19. The next highest were Sichuan Province, Henan Prov- ments have also been designated as coastal open eco- ince and Jiangxi Province. nomic zones. References 11. The reduced tax rate of 15% is subject to approval by the central government (Ministry of Finance). 1. Inagaki, K. [2009], Shanhai VS Honkon—Kokusan Kinyu Senta Wo Meguru Kyousou [Shanghai vs. Hong 12. Among existing studies, the expansion of the open Kong—Competition Focusing on Homegrown Finan- zones is described in similar terms in Kojima, S. [2004]. cial Centers] (Japan Center for International Finance, Topics Report: China) 13. Alarm over a relative decline in the city’s status has been cited as one of the factors that led to the imple- 2. Oizumi K. [2009], Evolution from Mega-Cities to mentation of this project. Other useful sources include Mega-Regions in the Emerging Industrialized Econo- the article on the Pudong development scheme in Ama- mies of China and Southeast Asia, in Japan Research ko. S. et al. ed., Iwanami Gendai Chugoku Jiten [Iwa- Institute, RIM, Vol. 9 No. 32, Feb. 2009 nami Encyclopedia of Modern China]. 3. Ohashi, H. [1999], Hotou Kaihatsu [Pudong Develop- 14. A stock exchange was also built in Shenzhen, but the ment], in Amako, S. Ishihara, K., Zhu, J., Tsuji, K., Shanghai exchange is significantly more important in Hishida, M., Murata, Y. et al. ed., Iwanami Gendai terms of trading volumes and other indicators. Chugoku Jiten [Iwanami Encyclopedia of Modern Chi- na], Iwanami Shoten 15. For example, at the end of 2008, the Chinese headquar- ters of 17 foreign-owned banks had opened offices in Shanghai. This is the highest number of any city and represents approximately 60% of the total for all of China. (Touzi Shanghai website, January 15, 2009).
RIM Pacific Business and Industries Vol. IX, 2009 No. 33 23 4. Ohashi, H. [2001], Bunzeisei Dounyuugo no Zaisei 12. Kojima, S. [2004], Boeki Taikoku no Jitsuzo [The True Jousei [The Fiscal Situation Since the Introduction of Picture of a Trading Superpower], in Kato, H., Uehara, Separate Taxation], in Japan Center for International K. ed., Gendai Sekai Keizai Sosho 2 Chugoku Keizai Finance, Chuugoku ni Okeru Taisei Kaikaku to Seibu Ron [Modern World Economic Library 2—A Discus- Daikaihatsu [Institutional Reform and the Western De- sion of the Chinese Economy], Minerva Shobo velopment Program in China], research commissioned by the International Bureau of the Ministry of Finance, 13. Japan-China Economic Association [2002], 2001/2002 Japan, http://www.mof.go.jp/jouhou/kokkin/tyousa/ (Kaiteiban) Chugoku Toshi Handobukku [China Invest- tyou010.htm), (accessed on June 26, 2009) ment Handbook 2001/2002 (Revised Edition)]
5. He, Y. ed. [2008], Changsanjiao Lanpishu 2008 nian- 14. Saskia Sassen [2001], The Global City, Princeton Uni- ban Hexie Changsanjiao [Blue book of Yangtze Delta versity Press, New Jersey — The Harmonious Society Delta], Social Sciences Academic Press, Beijing 15. Seki, M. [2005], Taiwan IT Sangyo no Chugoku Choko Deruta Shuseki [The Clustering of the Taiwanese IT 6. Gao, R., Wu, X., Che, C. [2008], 2007 Zhongguo Du- Industry in the Yangtze Delta], Shinhyoron shiquan Pingjia Baogao [2007 Report on Chinese Cit- ies], Truth and Wisdom Press, Shanghai 16. Sonoda, N. [2009], Choko Deruta Chiiki (Koso-sho, Sekko-sho, Shanghai-shi) no Keizai Doko [Economic 7. Jiang, Z. [1992], Jiang Zeming zai Zhongguo Trends in the Yangtze Delta (Jiangsu Province, Zhe- Gongchandang Di 14ci Quanguo Daibiao Dahuishang jiang Province, Shanghai Municipality)] (in JETRO, de Baogao [Report by Jiang Zemin to the 14th National Chugoku Keizai [The Chinese Economy], June 2009) Congress of the Chinese Communist Party], as report- ed in the People’s Daily, the official organ of the CCP 17. Tsuji, K., Nakano, K., Takeyoshi, J., Uno, K. ed. [1992], Central Committee, and on the official People’s Daily Chugoku Shobetsu Gaido 2—Shanhai-shi Sekai ni Hir- website, http://cpc.people.com.cn/GB/64162/64168/64 aku Shokogyo Toshi [China Province Guide 2—Shang- 567/65446/4526308.html (accessed June 26, 2009) hai: An Industrial and Commercial City Open to the World], Koubundou 8. Kong, L. [2008] Gendai Chugoku Keizai Seisakushi Nenpyo [A Chronology of Modern Chinese Economic 18. Myoi, A. [2008], Choko Deruta Chiiki no Arata na Policy History], Nippon Keizai Hyoronsha Chiiki-kan Kyoryoku Senryaku ni Tsuite [A New Inter- Regional Cooperation Strategy in the Yangtze Delta], 9. Advisory and Consulting Office for SME, Japan Bank on the website of the Fukuoka Prefectural Government, for International Cooperation [1999], Chugoku Ni overseas offices of Fukuoka Prefecture, http://www. Okeru Gaikoku Toshi Kanren Hou Seido no Henko to pref.fukuoka.lg.jp/e03/fukuokaken-kaigaijimusho.html Sore Ga Toshi Kankyo Ni Oyobosu Eikyo Nikansuru (accessed June 26, 2009) Chosa Hokoku [Report on Changes to Legal Systems Relating to Foreign Investment in China and Their Im- 19. Miyake, Y. [2006], Chugoku—Kaikaku Kaiho no Seiji pact on the Investment Environment], Japan Bank for Keizai Gaku [China—The Political Economics of the International Cooperation Reform and Open-Door Policy], Minerva Shobo
10. Wu., J. [1995], Chugoku no Zaisei Kaikaku to Chiiki 20. Mukoyama, H., Sano, J. [2007], Changes in China’s Kan Shotoku Kakusa [Fiscal Reform and Regional In- Foreign Investment Policy and the Response of For- come Disparity in China], in JRI, Japan Research Re- eign-Invested Companies, in JRI, RIM, Vol.7, No. 26, view, Vol. 5, No. 4, April 1995 July 2007
11. Wu., J. [2009], Shijo Shukusho de Uita Toshi Shikin o 21. Florida, R. [2008], Who’s Your City? Random House of Kokyusha Ni Muketa Chugoku no Fuyu Sou [China’s Canada, Ontario Wealthy Spending Funds Freed up by Market Contrac- tion on Luxury Cars], in Diamond Inc., Shukan Dia- mond, June 13, 2009
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