Business in Shanghai China: Economy, Invest, Taxation, Port, ...

Summary:

Due to constant inflow of people from other parts of the country, the size of population in Shanghai keeps growing. The population of long-term residents reached 17.78 million.

By the end of 2005, Shanghai employed 8.6183 million people. Of the total, 1.4793 million or 17.2% were hired by the state enterprises and institutions; 2.1983 million or 25.5% were employed by collectively-owned work units; and 865,800 or 10% worked in foreign-funded enterprises; 2.413 million, or 28%, worked at private businesses; 1.6621 million, or 19.3%, at firms of other economic sectors. The registered unemployment rate in the city's urban areas stood at 4.4%, 0.1 percentage point lower than the previous year.

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. According to statistics, in 2002 lived in Shanghai about 100 thousand foreigners and 250 thousand Taiwanese, among which some 34,735 foreigners, coming from 126 countries, were employed.

Shanghai is largest port city on the Chinese mainland and one of the world’s largest entrepots. In 2005, the Yangshan Deep-water Port opened its first phase, marking a major progress in the city’s effort to becoming an international shipping center. By the end of 2005, Shanghai had 28 international container wharfs, with 124 deep-water berths of 10,000 tonnages each. Shanghai Port operated 16 international container shipping routes and had established business contacts with more than 500 ports of nearly 200 countries and regions around the world.

Shanghai also enjoys a developed inland transportation: you can reach all the railway terminals in China from Shanghai railway station. In terms of highway, Shanghai plans to build 650km of expressway network in 2005 when it takes 15 and 30 minutes from any major industrial zones, hubs of communications and satellite towns to the nearby expressway and downtown respectively. The total length of high way in Shanghai has reached 238Km.

Increased regulating of the market has ensured healthy growth in the real estate sector. In 2005, the added value of the city's real estate sector hit 67.023 billion yuan, down 4.1% from the previous year.

Since 1992, the city has maintained a double-digit GDP growth rate for 14 consecutive years. In 2005, its GDP reached 914.395 billion yuan, 75.3% higher than 2000 in terms of comparable prices, representing an annual average growth of 11.9%.

As one of the convention and exhibition centers in the country, Shanghai has improved its ability to host meetings and exhibits. In 2005, the city 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.

Shanghai used to be an industrial center and have a very solid industry base. In recent years, the tertiary industry has developed rapidly, with annual increasing rate at 12% and took up 51% of the GDP of Shanghai in 2002. Compared with other major foreign investment cities, Shanghai puts its priorities in industrial and service sectors. Six key industries (IT, motor, petrochemicals, fine chemicals, complete set of equipment, biopharmaceuticals) realized 58% of the total industrial output while the four primary sectors in the tertiary industry (finance and insurance, real estate, transportations, post and telecommunication, wholesale and retailing) achieved 62% of the total output in this industry, in which finance occupies 21%, staying first.

The city has further optimized its industrial structure, thus constantly consolidating the foundation for its economic growth. The ratio of the city's primary industry, secondary industry and tertiary industry had changed from 1.8:47.6:50.6 in 2000 to 0.9:48.9:50.2 in 2005.

Non-public ownership grows rapidly, helping to build an ownership structure where the state, foreign and non-public funds team up to drive forward the economic growth. In 2005, the proportion of the state-owned sector in the city's GDP dropped from 59.6% in 2004 to 57.5%, while the figure of the non-public economic sector rose from 40.4% in 2004 to 42.5%. In the non-public sector, the proportion of the private ownership in the city’s GDP rose to 16.4% from 15.7% in the previous year.

In 2005, Shanghai's agricultural sector reported an added value of 7.965 billion yuan, down 6.9% from 2000 according to the comparable prices. The figure represents an average annual decrease rate of 1.4%. The city's total agricultural output value reached 23.678 billion yuan in 2005, down 6% over 2000.

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.

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%.

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. The aim is to consolidate all Shanghai-based Siemens business areas at SCS by the end of 2008.

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.

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