Per capita income is 78,000 yuan, life expectancy 84 years. Urban GDP is now the fourth in the world. Mayor Gong Zheng explains the work behind the city’s success, and how those accomplishments will be consolidated.
Photo from CFP
By YANG Shuhongji
Shanghai’s GDP was 4.32 trillion yuan (US$639 billion) in 2021, the fourth largest in the world. Only New York, Tokyo and Los Angeles did better. On Monday, Shanghai mayor GONG Zheng said the city’s GDP per capita was US$26,900 (180,000 yuan). It’s a substantial amount in global terms, above that of Portugal, but still less than that of Spain.
Gong took the opportunity to list Shanghai’s most significant achievements of the past few years, while he laid out plans and policies for the trials ahead.
For years, the megacity’s top priority has been creating a more innovative business environment where cumbersome old processes are not just replaced by new, more efficient ones, but one where the entire ecosystem is designed to suit the needs of the 21st century’s most demanding enterprises.
Already relatively modern and efficient, Shanghai has been selected not only to lead but to turbocharge the economic reform of the entire nation.
All businesses are powered by their workers and, in partnership with enterprises, the city government has set out to create a more equal and efficient urban experience that satisfies everyone from the C-suite to the factory floor.
None of this can be fully accomplished without greater transparency and accountability of government.
Trade through the city’s ports has grown by nearly 30 percent over the past five years and remains the highest in the world in both container volume and trade value.
Jinqiao comprehensive bonded zone has trialed new policies aimed at streamlining customs clearance procedures and cutting taxes. Many zone policies have already been adopted in free trade zones nationwide, and the zone will continue to be at the cutting edge of the liberalization of cross-border trade.
Semiconductors, biomedicine and artificial intelligence industries have been anointed as the future of high-quality development in Shanghai. The three new national labs set to open soon, will not just be magnets for global talent but will attract a vibrant set of businesses that rely on close proximity to excellent research facilities.
The China International Import Expo has been hosted in Shanghai every year since 2018. This year’s event will be bigger and busier. The city is preparing to welcome about 3000 companies to the latest episode of the event, planned for November this year. The occasion has played a key role in promoting the city’s credentials as a center of international trade, critical to attracting foreign investment and introducing new technology and practices to the Yangtze Delta and beyond.
Despite the lockdown in the Spring and early summer, foreign investment kept growing in the first half of this year. Yet another crop of multinationals set up headquarters in Shanghai; 26 in the past six months, taking the total to more than 850. At least 10 companies opened R&D centers this year.
There is a lot less red tape involved in opening businesses than before, especially foreign-invested companies. The tech-focused STAR market was created to try to make fundraising easier for startups. A market-oriented registration-based IPO system is being piloted. The system still requires a few tweaks to serve its intended functions but has already been a blessing for tech businesses in need of cash.
Policies, regulations and goodwill may make life easier for businesses, but attracting and retaining the right kind of talent is the most important task of the city, and perhaps the most challenging. These improvements to the business environment, the legal system and the overall quality of life in one of the world’s biggest metropolises have one primary objective: to attract people from all over the world and for them to be able to appreciate everything the city offers.
Pudong, home to Shanghai’s financial district and bursting with international appeal, saw its GDP grow by more than 10 percent last year. There have been some serious innovations there in finance, customs and shipping. Special legal measures in Pudong put the district at the heart of attempts to address issues in intellectual property protection and green finance.
Just over a year ago, the central government published a set of economic guidelines that confirmed Pudong as a continuing testing ground for market reforms and financial liberalization. Mayor Gong said Pudong will continue to experiment with new policies until it has transformed itself into the long-envisioned international hub of finance, technology, shipping and trade that the government expects. A lot of work remains to be done in terms of making Pudong’s consumer economy more dynamic and the legal system more comprehensive. But the urban environment is already more pleasant and becoming more agreeable every day.
Pudong is not the only free-trade success story. Lingang pilot free trade zone, bordering Pudong International Airport, has signed up hundreds of projects with a total investment of about 350 billion yuan.
The Lingang zone is home to the first foreign-controlled asset management company in China and the first foreign-owned fintech enterprise. The free trade zone not only specializes in entrepôt transactions but has strengths in warehouse financing. Addressing a widespread complaint by overseas enterprises, Lingang is experimenting with a set of new rules that should make it easier for businesses to move their money both in and out of the country. The zone is also committed to reducing the stress of the previously fraught process for individuals to get work permits in China.
Per capita, disposable income increased to 78,000 yuan in 2021. Life expectancy is now 84 years. An urban renewal project, which was completed ahead of schedule, has improved living conditions for over 160,000 families in the old city center. The city now has 532 parks and will have 120 more by the end of the year. Each resident now enjoys access to 8.7 square meters of green space, very close to the WHO recommendation of 9 square meters per person.
Municipal affairs have mostly been moved online. More than 69 million individuals, and 3 million businesses, are connected to the government app, which now offers more than 3,500 services.
Shanghai and three provinces in the Yangtze Delta region (Anhui, Jiangsu, and Zhejiang) have been working on many economic reforms and will continue to work together to bring about the integrated economy that the delta needs.
Shanghai has been leading the concerted effort to codify a collaboration mechanism since last year. As a result of this impetus, the delta region has set up task forces in 15 development areas. These areas include energy, finance and technology. The difficult process of setting up common standards for business administration, infrastructure and environmental protection across the delta is already showing signs of success.
