Since the 1990s, Shanghai's industry has maintained a two-digit growth for 18 consecutive years, with both industrial value added and industrial profit increase rate breaking the records of the past 10 years. An industrial pattern spearheaded by high-tech industry, backed by basic raw material industry, backboned by equipment industry and supported by metropolitan industry has basically come into being. Six key industries including automotive, steel manufacturing and petrochemical are entering into their respective development and mature stages. In the meantime, from the viewpoint of bottleneck of industrial development, resources and environment are becoming more and more restrictive to the development of the industry, rendering it more and more urgent to change the growth model and optimize the industrial structure.

Structure

Shanghai has already developed a comprehensive industrial structure and is currently developing six pillar industries--IT, finance, trade, automobiles, equipment lines, and real estate; two basic industries of petrochemicals and steel; and four booming industries--optical-electronics, software, modern bioscience, and advanced materials; and three urban industries of manufacturing, tourism, and agriculture

The great leap of Shanghai's economy benefited from the amazingly fast development of industry. In the past Shanghai gave priority to advanced manufacturing industries and promoted the construction of its industrial base and large projects. The manufacture of automobiles, electronic and communication equipment, petrochemicals, steel products, equipment assemblies and biomedicine had once been promoted as the six pillar-industries of Shanghai.

Shanghai still pays much attention to its industry. There are many industrial areas in Shanghai such as Jinqiao Export Processing Zone in Pudong New Area, Zhangjiang Hi-Tech Park and some other processing zones in Jiading, Qingpu, Songjiang and Minhang districts. As a result, the city's industrial production continues to grow rapidly. There is no doubt that industry makes a lot of economic profit; however, it is much more costly to the environment.

Other booming industries, especially the service industries, contribute a lot to Shanghai's economy. In recent years the financial market system has gradually matured, providing citizens and tourists with improved services. Domestic and international trade also has developed quickly. The Lujiazui Financial and Trade Zone in Pudong is now becoming more and more influential. It brings together many financial and commercial institutions such as stock exchanges, securities companies and insurance companies, both Chinese and foreign.

Transportation, especially the subway system in Shanghai, is developing vigorously, providing sufficient transport capability and good services. The prosperous postal services, communications and information industries facilitate daily communication among people.

Various other service industries are booming in Shanghai, so that the living standards of its citizens are improved. These include catering, hotel, entertainment, tourism, real estate, education, culture, health, physical training, TV and broadcast, consultation and information services, technology services, public utilities and social welfare.

Layout

After decades of restructuring, Shanghai's industry has preliminarily achieved the layout with key industrial bases as its dragonhead, above municipality-level industrial parks as its backing, key district/county-level industrial park as its supporting force and downtown industrial parks as its supplementation.

--Industries are increasingly concentrating toward industrial parks. Concentration level in above municipality-level industrial parks has reached about 38%, while output per square kilometer increased by RMB 500 million. Together, the 13 industrial parks of national or municipal level of the city realized a gross output of RMB 469.56 billion in the year, increasing by 45%, accounting for 41.7% of that of the overall industry of the city, which was 4.9 percentages higher than the weight of the previous year.

--Substantial progress has been achieved in the development of key industrial bases. By this time, Shanghai microelectronics industrial base has become one of the key development and manufacturing bases of microelectronics in the world. All together, there are ten 8''chip production lines, either under construction or already in operation, turning out an IC output weighing 51% in the national total. Shanghai Chemical Industrial Park has basically completed infrastructure construction and is now at the stage of full construction of main body projects, which, about 10, were scheduled to get an investment of about USD 8 billion. Shanghai Refined Steel Base is planned to focus on he development of special steel, stainless steel and carbon steel, with the aim at a world-class steel manufacturing base. Shanghai International Auto City is striving toward a composite auto industrial base with auto industrial chain as its core, integrated with auto manufacturing/R&D, dealership and exhibition, education, sports culture, tourism and a number of other functions. In addition, construction projects of Lingang Equipment Industrial Base and Changxing Island Ship Building Base have been officially initialized.

--A new round of restructuring of downtown industrial layout is underway. According to the general layout of the municipality and requirement of the World Expo, detailed planning was made on the realignment scenarios of old industrial areas along the Huangpu River, Suzhou River, Middle Ring Road, and in Taopu, Wujing Districts.

Foreign funds

Shanghai attracting contractual foreign capital increased by 21.6 percent in the first nine months of 2008.

January through September this year, Shanghai newly established 2,798 of foreign-invested projects, with contractual foreign capital of $12.847 billion, up by 12.6 percent year-on-year. Among them, the increased capital stood at $7.863 billion, up by 30.3 percent. Actual foreign capital in position of $7.665 billion, up by 20.7 percent year-on-year. As of the end of September 2008, Shanghai had accumulatively approved 51,551 projects of foreign-invested enterprises, attracting contractual foreign capital of $142.251 billion.

The major characteristics in utilizing foreign capital in the first nine months are that the industrial structure was further optimized, with the ratios of the primary industry, the secondary industry and the tertiary industry of 0.1 percent, 24 percent and 75.9 percent respectively; rapid development of the modern service industry drove the tertiary industry to grow significantly, with the financial service industry contractually utilizing foreign capital of $323 million, up by 65.8 percent year-on-year; economic projects of the headquarters maintain the good trend of development, with 50 foreign economic institutions of headquarters set up in Shanghai from January to September and most of R&D centers centralized in hi-tech areas, seven of which are in biomedical area.

(Eastday.com April 14, 2010)