11.2008

Major Economic Indicators

Notes: ¹ In real terms ² For all state-owned enterprises and other forms with annual sales over RMB 5 million
³ First half of 2008
Sources: Shanghai Statistical Yearbook 2008, China's customs statistics 8.2008

General Background

Shanghai has a total area of 6,340.5 sq. km, consisting of 18 districts and one county. Total population stood at 18.6 million by the end of 2007. Shanghai is one of the 4 autonomous municipalities and historically a commercial and financial center of China.

Located at the heart of the Yangtze River Delta, Shanghai is China's largest and the world's 3rd largest container port, which handled 26.2 million TEUs in 2007, up 20.7%. The Yangshan International Deep Water Port under construction is expected to give modern twist to the port city. Hongqiao and Pudong International airports link Shanghai with 141 cities in 29 foreign countries and regions.

In its 11th Five-Year Programme, Shanghai aims to become an international hub for finance, trading and shipping. In particular, Pudong District is to become a pilot area for integrated reforms.

In order to host The 2010 World Expo, Shanghai will invest RMB 28.6 billion in total, 18 billion in construction and 10.6 billion in operation, creating huge business opportunities.

Industries

In 2007, 52.6% of Shanghai's GDP was attributed to services industries. The top 3 largest industries were: financial services, retail and wholesale and real estates. Shanghai will focus on the development of financial services, logistics and cultural industries..

Composition of GDP (%)

Shanghai plays a key role in China's heavy industries. Baosteel Group, China's largest steelmaker, and Fosun Group, one of China's largest private steelmakers, are both located in Shanghai. Auto manufacture is another important industry and there are 4 directions for its auto industry: to develop its own car brands, to cooperate with Japan and Korea car companies, to accelerate the development of business use cars and to promote the autoparts and car service industries. Shanghai is also a leading producer of ethylene, plastics, microcomputers, ICs and mobile phones.

Output Share of Key Industries (2007)

Sources: Shanghai Statistical Yearbook 2008

Shanghai has been undergoing major industrial restructuring over the last decade. The share of low value-added manufacturing has decreased significantly, particularly the textile and heavy-equipment manufacturing industries as many of them have relocated to outside Shanghai.

Financial Industry

Shanghai is China's financial center. By the end of 2007, there were 604 financial institutions, including banks, insurance companies and securities companies, of which 140 were foreign-invested. The set up of the market operation head office of the People's Bank of China in Shanghai in 2005 has further strengthened the importance of Shanghai as a financial center.

High-tech Development

Shanghai has made significant progress in developing its high-tech industries, such as computer, telecommunications equipment, and integrated circuit manufacturing. Shanghai's output of high-tech industries grew by 25.7% to RMB 560.7 billion in 2007. Technology area with the most output value of the high-tech industries is electronic computers and office equipments.

Tourism

Shanghai is a major tourist destination. The 2010 Shanghai World Expo is expected to entertain some 75 million foreign visitors. In 2007, Shanghai received 6.7 million overseas tourists and 102 million local tourists, bringing foreign exchange revenue of US$4.7 billion and RMB161.1 billion respectively.

Foreign Trade

The leading overseas markets in 2007 were the US, Japan, Hong Kong, Germany and South Korea. Major export items are machinery and transport equipment and raw material products etc.

Japan is the leading source of imports, followed by South Korea, the US and Taiwan. Major imports included machinery and transport equipment, raw material products and chemicals and related products etc.

In 2007, Shanghai exported US$20.7 billion to Hong Kong and imported US$2.0 billion from Hong Kong.

Foreign investment

Shanghai is a major destination for foreign direct investment. About 300 of the world's top 500 enterprises have invested in Shanghai, such as Delph, GE, Mitsubishi, Itochu, Siemens and Hitachi etc.

In 2007, Shanghai accounted for 9.5% of China's total utilized FDI. The city's cosmopolitan character, sophisticated and affluent consumers, and highly educated and skilled labor force make it highly attractive to overseas investors.

Of the total utilised FDI in Shanghai in 2007, secondary industry accounted for 32.8% and tertiary industry accounted for 67.1%. In recent years, thanks to liberalizations in the services sector, foreign investment in the services sector has increased more quickly than in the secondary sector. Utilised FDI in the services sector in 2007 was up 20.5% to US$ 5.3 billion. Growth of investments in trading, logistics, advertising and financial services have accelerated.

Hong Kong is the largest source of overseas investment in Shanghai. In 2007, Hong Kong investors signed 1,141 contracts with contracted amount of US$5.5 billion, and the utilized FDI invested by Hong Kong reached US$2 billion. Hong Kong's investments were mainly involved in infrastructure, real estates, banking, food catering and retail trade. Other major investors came from Japan, the US, and Germany.

Consumer Market

Shanghai is the largest consumer market among all mainland cities, supported by the rising income level and large inflow of tourists. Shanghai consumers are also being viewed as trend-setters for fashion and lifestyle products among the whole country.

Shanghai's retail sector is developing rapidly. Shanghai's per capita disposable income of urban residents reached RMB23,623 in 2007, increased by 14.3% from 2006. Retail sales of consumer goods grew by 14.5% to RMB 384.8 billion in 2007.

Composition of Per Capita Expenditure of Urban Household (%)

Major foreign retail enterprises in Shanghai include hypermarkets like Carrefour, Walmart, Metro and Lotus Supercenter and department stores like Isetan, No.1 Yaohan, SOGO and Pacific Department Store etc. Supermarkets and convenience stores are mainly local enterprises e.g. Lianhua Supermarket, Hualian Supermarket, Nonggongshang Supermarket, all of which are the largest retailers in the nation.

Franchised chain stores from Hong Kong such as U2, G2000, Baleno, Bossini, Giordano, etc. have also entered Shanghai. Famous Hong Kong brands in Shanghai included Esprit, Chow Sang Sang, Chow Tai Fook and Luk Fook.

Shanghai has strong distribution power in China, especially in the Eastern region and Yangtze River Delta. And foreign brands often choose Shanghai as point of entry into the China market. Domestic tourists and travellers used to visit Huaihai Road and Nanjing Road for a glimpse of the latest trends in the Chinese marketplace. The shopping malls on the Nanjing road, Huaihai Road and in the Xujiahui Business Center are filled with people everyday, displaying the most stylish chic in the world.