Shanghai Fact Sheet
Introduction
Shanghai is the financial hub of China. It is estimated that
over 30% of commercial activities in China go through Shanghai
and its adjacent areas. At the end of year 2005, over half
of the Fortune 500 firms had set up their presences in Shanghai,
either in the form of Permanent Representative Office (RO), Wholly Foreign Owned
Enterprises (WFOE, also known as Wholly Owned Foreign Enterprises) or Equity Joint Ventures (EJV).
With more than 200 years’ history for the financial
industry, Shanghai was the biggest financial center in China
and Far East’s major commercial center in 1920s and
1930s. Since 1990s, Shanghai has regained much of its vitality
and is gradually emerging as a financial center for the region
once again.
Location
Surrounded by the Yangtze River in the north, the East China
Sea in the east, the Hangzhou Gulf in the south and Jiangsu and Zhejiang provinces in the west, Shanghai is the mid-point
of China’s coastal lines and boasts the occupation of
a perfect natural port. The city has a total area of over
6,300 square kilometers and is divided into 19 districts and
1 county. The most notable new developing district is Pudong
New Area.
Population
Shanghai has a population of over 13 million, representing
1% of China's total. In 2002, with a GDP per capita of USD4,900,
Shanghai employed around 7.9 million people.
Economy
Shanghai’s economy has witnessed fast and sustained
growth in recent years. In 2000, the city's GDP reached USD49
billion. From 1992 to 2002, Shanghai had registered a double-digit
annual GDP growth rate for nine consecutive years.
To evolve into a market economy, Shanghai has been adjusting
and modifying its “ownership structure”. The proportion
of the state-owned sector in the city's GDP dropped from 82%
in 1995 to 71.4% in 2001, giving way to the non-public-owned
sector.
The Chinese government is keen to restructure Shanghai's tertiary
industry. Finance and insurance, commerce, transportation,
telecommunications, real estate and information technology
are the key sectors of development. In 2000, the five sectors
made up for nearly 40% of the city's GDP. Among them, the
finance and insurance sector had the fastest growth. With
the internal structure of its tertiary industry further improved,
Shanghai’s role as an economic center in China will
no doubt be strengthened.
Infrastructure and Investment Areas
Shanghai is a major land, sea and air transportation centre
in China. It has established stable trading routes with over
1100 ports in over 200 countries and regions. It has two airports.
The newly built Pudong International Airport has a capacity
of 70 million passengers per year.
The city itself is divided into:
Central Business District
Lujiazui Finance & Trade Zone and the Bund financial trade
zone make up the Central Business District in Shanghai. Over
100 domestic and foreign financial organizations have established
in this district including the regional headquarters of many
multi-national corporations, such as Siemens and Johnson &
Johnson.
Free Trade (Tax Bound) Zone
Waigaoqiao Free Trade Zone is one of the biggest trade zones
in China. In 2000, reported turnover was USD6.5 billion. The
total amount of export and import was USD92 million; the goods
throughput was 14,620,000 ton; the container throughput was
1,840,000 standard containers. Up to 2000, more than 600 storage
enterprises have set up in this Zone.
Pudong New Area
Pudong is designed to be built as a multi-functional and radiant
modern city. From 1990 to present, the total investment of
capital construction in Pudong New Area amounted to USD 11
billion. The ten capital construction projects, represented
by Pudong International Airport, Pudong Cyberport, Mass Transit
(No.2), Waigaoqiao Electricity Generation Plant, East China
Sea Natural Gas have been completed.
Export Processing Zone
Jinqiao Export Processing Zone now has become one of the most
important bases of high-tech industry in Shanghai. In 2000,
the total production value of the Zone amounted to USD55 Billion.
The major high-technology products produced in this area are
automobile parts, micro-electronics, computer accessories,
telecommunication parts and accessories, bio-technology products
and photo-electric products.
High-tech Parks
Occupying an area of 100,000 square meters, there are 16 governmental
research institutions and 70 civil institutions and enterprises
established in the High-tech Parks up to the end of 2000.
Financial Industry in Shanghai
Shanghai is traditionally famous for its finance industry.
It ranks top in the total number of licences granted to domestic
and foreign financial institutions in China. As at the end
of 2001 there were 17 local banks and 49 foreign banks establishing
branches in Shanghai.
Law and Legal System
The legal system of China is similar to the European code
law system. The National People’s Congress (NPC) is
the ultimate law making body, whose functions are mostly delegated
to the standing committee of the NPC, which enacts laws in
accordance with the Constitution.
State Council, together with its various administrative departments,
are also authorised to adopt administrative regulations and
measures. These administrative regulations and measures, as
long as not contravening the relative laws, are important
source of laws in China. The administrative bodies are the
sole interpreter of the administrative regulations and measures.
Their power to interpret the laws is only limited, or subject
to the adjustments of its supervisory bodies and the court.
In doing business in China, it is very important to check
up all current laws and regulations applicable to the invested
industry. As a promise to the WTO, China’s laws have
been made more transparent. In fact, all laws and regulations
applicable in Shanghai can be downloaded from government’s
web site.
The People’s Courts are the judicial organs of the state,
which are able to exercise independent power in accordance
to the law. The People’s Courts and their judges are
appointed by the NPC and its Standing Committee.
When a person believes that his/her right has been infringed
by any administrative body, he/she can normally complain to
its supervisory body, or resort to a review by the court under
the administration law.
Currency and Exchange Control
The currency of China is Renminbi (RMB). The currency is a
non-convertible currency and the exchange rate is officially
fixed at RMB8.11 to USD1. Although exchange controls still
exist on “capital account”, which is used exclusively
for the inward remittance of “capital items”,
exchange controls on “trade account” or ”current
account” have in effect stopped to exist. It is very
easy to remit dividends (after tax profit) from China. There
is virtually no control on remittance of trade-related items. |