Opening Wider to the Outside World and Scoring New Accomplishments in Shanghai’s Foreign Trade and Investment 

In 2007, Shanghai applied the Scientific Outlook on Development in real earnest. According to the requirement of the Central Government, the city has sped up the “Four Leads” initiative and accelerate the creation of “Four Centers”. Through implementing the Central Government’s macro control policy and pursuing the opening-up incentives, Shanghai has made new headway in foreign trade and investment.

Foreign Trade: Imports and exports progressed in a balanced manner with the structure further optimized. Trade in services played an even greater role in the city’s GDP. Last year, exports and imports of goods reached 282.76 billion USD, up by 24.3% year-on-year; among them, exports totaled 143.83 billion USD, and imports 138.93 billion USD, up by 26.6% and 22% respectively. International trade handled by the port of Shanghai came to 520.91 billion USD, an increase of 21.5%. Trade in services has gathered momentum as evidenced by faster growth and better structure. The exports and imports in this sector grew by 25% to 50 billion USD. Foreign trade last year can be characterized as follows:

Firstly, the structure has been further improved. The exports of mechanical and electronic products grew faster by four percentage points than the city’s average while the exports of those highly polluting, power hungry or resource-dependent products declined by 16 percentage points. International trade with emerging markets reached 109.3 billion USD, representing 43% of the total.

Secondly, exports and imports were in balance substantially. Last year, the trade surplus was 6 billion USD, accounting for 2% of the country’s total.

Thirdly, trade in services made a greater contribution to Shanghai ’s economy. In 2007, the growth rate of trade in services is 2 percentage points higher than that of the trade in goods, the exports and imports of trade in services accounted for 15.13% of the city’s total.

Introduction of Foreign Investment: We achieved sound and fast development in attracting foreign investment, with steady growth in its scale and significant improvement in terms of quality and efficiency.  The foreign investment covers broader fields, and the service-sector-led economy, in particular, has been solidified. In 2007, the contracted foreign capital increased by 2.03% to 14.869 billion USD; of these, the paid-in foreign capital reached 7.92 billion USD, up by 11.4%. Shanghai stands as a leading example in developing the Headquarters Economy. In 2007 alone, 79 projects of headquarters economy including 34 R&D centers, 15 investment companies, 30 regional headquarters were incorporated in Shanghai , among which 10 were from the world’s top 500 companies. As of the end of 2007, Shanghai is home to 593 foreign-invested headquarters-economy projects including 16 national-level regional headquarters.

Foreign investment saw a better industrial mix. 64.47% of the foreign capital was invested in the tertiary sector and 35.28% the secondary sector. Modern service sector grew rapidly. More world-class service outsourcing companies made their presence in Shanghai , in particular, 3 out of the 6 world-leading specialized service outsourcing companies set up their China headquarters in Shanghai . The commercial projects maintained a momentum of robust growth. For the whole year, the contracted foreign capital pledged in the commercial projects reached 1.81 billion USD, up by 5.8%.  The growth rate of the hotel and catering, scientific research and technological services, logistics, financial services, information transmission, computer services and software services increased by 75.1%, 52.1%, 44.8%, 42.7% and 40.4% respectively. Foreign capital invested in advanced manufacturing industry developed steadily. Telecommunication equipment, computer, other electronic equipment manufacturing and pharmaceutical industries have become the major driving force, with foreign investment in these two sectors increasing by 58.4% and 79.2% respectively. Foreign-funded projects committed to energy-saving and pollution reduction such as Suntech and Alex Solar both of which deliver solar energy solutions have been launched in Shanghai . Manufacturing companies with investment over 10 million USD attracted 3.94 billion USD worth of foreign capital last year, a year-on-year growth by 33.1%.

Foreign Economic Cooperation: “Going Global” strategy has gathered pace, with some new growth areas. In 2007, the newly-signed foreign project contracts and labor cooperation projects were valued at 7.347 billion USD, a hike of 34.6%, leading the rest of the country. The turnover of projects under construction reached 5.024 billion USD, up by 6.9%. We have vigorously pressed ahead with a number of highly performing projects, i.e., the Russian Baltic Pearl Economic and Trade Cooperation Zone.

Firstly, the scale of outward investment and overseas project contracting is continuously expanding. The average investment of these projects exceeded 10 million USD, including a large number of engineering projects, i.e. the 3x350 MW power station project at the Port of Princess in Indonesia and the Phase I of the New Busan Port in the Republic of Korea .

Secondly, large-scale turnkey projects such as newly-signed power stations have contributed over half of the outward investment. These projects inluding the turnkey power station projects delivered by the Shanghai Electric Group Co., Ltd and large-scale port mechanical equipment manufactured by Shanghai Zhenhua Port Machinery Company for ports overseas, among others, help to take the foreign project contracting to the next level, build up Shanghai’s capacity in producing power station equipments and boost the export of mechanical and electronic products.

Thirdly, major breakthroughs have been made in terms of what and how we invest overseas. In 2007, another 37 investment projects related to retail, trade and services, 13 research and development projects and 6 resource-exploring projects were approved. There is a very sound momentum in leveraging foreign technology and know-how, exploring and utilizing overseas energy and resources. New ways of outward investment have been developed such as overseas merge and acquisition, share participation and restructuring. Private enterprises, in particular, have played an even bigger role, accounting for 16.9% of the total.

Fourthly, key projects in outward investment have made smooth progress. The Russian Baltic Pearl Project has been well under way. The first architecture—the Business Center was completed by the end of May, and was open to public before the opening of the Shanghai Week of Russia’s China Year. In addition, the construction of the South Square and residential houses were rolled out as scheduled.

Fifthly, significant results have been achieved in providing foreign assistance. The Architectural Design and Research Institute of Tongji University got the bid of the design project of African Union Conference Center , a very important foreign assistance project committed by China during the China-Africa Forum. In addition, Shanghai Construction Group undertook and completed 12 foreign assistance projects including the Office Building of Sierra Leone’s Foreign Ministry. It also partnered with relevant departments in organizing workshops on foreign assistance for six times which trained 228 officials and technicians from 50 countries.