Business in Shanghai Pudong China: Economy Foreign Trade FDI

Related Foreign Trade Courses and masters: Business in Eastern Asia - Master Business in Asia - Master in Emerging Markets - Master Business Asia Pacific Region.

Course summary (Doing business in Shanghai):

Doing business in Shanghai: financial, economic, trade and shipping center of China. SAIC Automotive Industry Corporation, Siemens

Since 1992, Shanghai has maintained a double-digit GDP growth rate for 14 consecutive years. With only 1% of the nation’s population and 0.06% of the nation’s land, Shanghai contributes one-eighth of China’s financial income. The volume of cargo handled at local ports accounts for 10% of the national total, and commodities passing through the city’s Customs 25% of the nation’s total.

In 2008, the foreign trade export hit 64.2 billion USD, up 19.1% year on year while the processing trade export reached 91.7 billion USD, up 15.2%. Export of the high-tech and electromechanical products recorded fast growth. Shanghai also has achieved marked progress in diversifying its export markets.

The export to other Asian areas totaled US$66.867 billion, up 15.5%; to Europe US$46.767 billion, up 24.7%; to North America US$40.27 billion, up 8%, and the growth of export to Latin America and Africa exceeded 40%.

The city has seen fast growth in its modern service industries. The wholesale and retail, finance and insurance, transport, logistics and post, real estate, information transmission by computer and software sectors contributed more than 35% of the Shanghai’s total output value in 2008, including 10.5% from finance and insurance, 9.3% from the wholesale and retail, and 5.5% from real estate sector. Increased regulating of the market has ensured healthy growth in the real estate sector.

As one of the convention and exhibition centers in the country, Shanghai has improved its ability to host meetings and exhibits. Shanghai hosted 276 exhibits, including the first Asia Expo of international Brand Sports Products and Sport Fashion and the 2005 China (Shanghai) International Children’s Modern Education Consumption Exhibition. Many international exhibition giants, such as those from Hanover, Germany, and Milan, Italy, have setup their branches in the city, bringing more international brands to Shanghai.

Example of the course (Doing business in Shanghai):

As one of the country’s transport hubs, Shanghai enjoys easy access to the road, rail and air networks.  Shanghai is largest port city on the Chinese mainland and one of the world’s largest entrepots. In 2008, Shanghai handled 843.47 million tons of cargo, including 9.85 million tons by railway, 403.28 million tons by highway and 3.05 million tons by air. The number of passengers leaving the city totaled 109.2722 million, including 53.3895 million by railway, 29.34 million by road and 25.6537 million by air.

The pillar industries in Shanghai refer to manufacturing of electronic and information-technology products, auto making, petrochemical and fine chemical processing, fine steel products manufacturing, production of complete equipment, and biomedicine. In 2008, Shanghai realized an industrial added value of 578.499 billion yuan, up 8.4% over the previous year according to the comparable prices. The city’s total industrial output reached 2.563897 trillion yuan, up 8.1% from the previous year.

After 18 years of opening and reform undertakings, Pudong has established itself as a modern urban district geared toward investment environment and multifunctional services, becoming a window showcasing the country’s reform and opening achievements and a mirror of Shanghai’s modern construction. In 2009, the amount of GDP realized by the New Area was 400.139 billion yuan, a growth of 10.5% over the previous year, accounting for 26.9% of the total GDP of Shanghai.

The New Area (Pudong) has six national-level development zones – the Waigaoqiao Free Trade Zone, Lujiazui Finance and Trade Zone, Jinqiao Export Processing Zone, Zhangjiang Hi-Tech Park, Yangshan Free Trade Port Area and Pudong Airport Free Trade Zone; five municipal level development zones – Sunqiao Modern Agriculture Development Zone, Kangqiao Industrial Zone, Lingang Industrial Zone, Nanhui Industrial Park and Shanghai International Medical Zone.

During the past decade, the Shanghai’s FDI (Foreign direct investment) rapidly increased with a rate up to 36%, 10% higher than that in China as a whole. The increase rate in Shanghai has been the top one for many years. In 2002, Shanghai’s FDI accounted for 19.3% of total fixed assets input.
In 2008, Shanghai approved a total of 3,748 projects involving direct overseas investment. The contracted fund totaled US$17.112 billion, and the realized fund hit US$10.084 billion, up 27.3% over the previous year.

The service sector continued to gain speed in attracting overseas fund. In the year, overseas funds of US$6.835 billion were pumped into the sector, up 28.6%. In 2008, foreign businesses added US$10.759 billion worth of investment, accounting for 62.9% of all the contracted funds in the city.

The city has signed a total of 52,500 projects funded by businesses from 138 countries and regions. The contracted fund totaled US$146.516 billion, of which US$84.767 billion had already been pumped in.

By the end of 2008, Shanghai had attracted 224 regional headquarters of multinational companies, 178 investment firms and 274 overseas-funded research and development centers.

Shanghai is an ideal city to live in for foreign investors. According to the survey by the famous journal Economists, Shanghai has been appraised as the city that is most suitable for foreigners to live in. At present, the number of foreigners living and working in Shanghai is far ahead of that in other cities of China.

Shanghai Foreign Investment Development Board (FID) was approved by the Shanghai Municipal Government and established on December 27 1999. As one window of Shanghai, FID is an official investment promotion agency.

Foreign invested enterprises (Sino-foreign equity joint ventures, Sino-foreign contractual joint ventures and solely foreign invested enterprises) and foreign enterprises which have their organizations established in the Chinese territory and are engaged in production and business are subject to corporate income tax at a rate of 30% and local income tax at a rate of 3%.

Shanghai is the first area in China to report a negative population growth rate. By the end of 2008, Shanghai employed 9.4 million people. Of the total, 14.9%, were hired by the state enterprises and institutions; 20%, were employed by collectively-owned work units; 14%, worked in overseas-funded enterprises; 31.6%, worked at private businesses. The registered unemployment rate in the city’s urban areas stood at 4.2% in late 2008.

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As one of the top 3 automotive corporations in China, Shanghai Automotive Industry Corporation (Group) (“SAIC” for short) is mainly engaged in manufacturing, sales, research and development, and investment in passenger cars, commercial vehicles and components, as well as related services trade and financial business.

In 2009, the company also entered the Fortune Global 500 list for its consolidated revenue of $24.88 billion (2008), ranking 359. SAIC holds 10% equity shares of GM Daewoo; it has set up branches in the US, Europe, Hong Kong, Japan and Korea. In 2009, SAIC’s self-owned brand rapidly promoted sales volume and achieved total of 90,000 units, a year-on-year increase of 154.4%. SAIC culture, as a Group culture incorporating multiple cultures and connotations, is bound to meet with collision and friction between different cultures.

SIEMENS IN SHANGHAI. Over the next two years, Siemens will invest approximately 70 million euros in building a center for regional headquarters in Shanghai. The center will be called Siemens Center Shanghai (SCS) and serve the eastern region of China. TIn fiscal 2009, sales to Chinese customers amounted to more than EUR5.2 billion. New orders totaled more than EUR5.5 billion. Siemens currently has more than 43,000 employees in China.

The cooperation between Siemens and China started as far back as 1872. The first Siemens order from China was the delivery of pointer telegraphs, marking the start of modern telecommunication development in China. The rapid expansion of business relations with China prompted Siemens to establish its first permanent office in China, in the city of Shanghai, in 1904. This was a major milestone of the company's engagement in China and marked the start of Siemens' journey to become the well-liked and respected corporate citizen in China it is today. After decades of successful cooperation, Siemens founded Siemens Ltd. in 1994. With some 13,000 employees, Siemens Shanghai is the largest location outside Germany.

Wal-Mart came to China in 1996. The first Supercenter and SAM'S CLUB were opened in Shenzhen, Guangdong Province. Today, there are 101 units in 53 cities, including 96 Supercenters, 3 SAM’S CLUBs and 2 Neighborhood Markets. Across China Wal-Mart employs over 40,000 associates.

Wal-Mart firmly believes in local procurement. They recognize that by purchasing quality products, they can generate more job opportunities, support local manufacturing and boost economic development. Over 95% of the merchandise in their stores in China is sourced locally.

EENI In Chinese: 硕士: 国际商务，全球营销 和 外贸

Business, Shanghai, China, Doing business, city, Economy, Invest, Taxation, Port, foreign, investors, Population, Employed, Master, international business