11th Five-year Plan of Jing’an District for Foreign Economy and Trade

Plan of Jing’an District for the Development of Foreign Economy and Trade in the “11th Five-year

In the next five years, China’s economy will get further integrated with the world economy and the changes in the international politics and economic environment will have increasingly wide and deep influences on the development of foreign economy and trade in China. Nevertheless, judging from the general situation, the opportunities are greater than challenges for Shanghai. As a downtown area of Shanghai, Jing’an District boasts good foundation and leading edges in commerce and business development. As the later transitional period following China's entry into the WTO is coming to an end, all the commitments between the member countries are gradually realized, which will create a comparatively favorable external environment for Jing’an District in using foreign investment and developing foreign economy and trade. However, in order to ensure the rapid development of foreign economy and trade in Jing’an District at a high starting point, there are still many problems to solve and a lot of arduous work to do.

The general idea for development is to follow the cause of building Shanghai into an international economic, financial, trade and shipping center, focus on the goal of building Jing’an District into an area of "high technology & high added value", seize the opportunities and face the challenges, make innovations in a pioneering spirit, and accelerate the development. We should continue to expand the channels and sectors for utilizing foreign investment, quicken the development of modern service industry, and maintain the scale and increase the quality and effects of utilizing foreign investment; we should take active and effective measures and continue to promote the steady growth of exports; we should consolidate and improve the existing advantages in business and commerce, quickly raise the level and scale of services and trade in the district, steadily strengthen the function of foreign-related comprehensive services, maintain the steady and sound development of export-oriented economy, and further increase the contribution of export-oriented economy in the economic development of the district.

Predicted indicators are as follows: actual foreign investment not less than USD 100 million every year, average annual growth of 10% in exports, and average annual growth of 20% in the service trade.

I. Upgrading the structure and striving to improve the performance of using foreign investment

Advantages: fewer restrictions, granting national treatment to foreign investors; the scale and level of the investment of multinational companies in China continuing to rise, their setting up investment companies, regional HQs and R&D centers in China; multinational companies regarding the Chinese market an important part of the global market, taking it into their global production, supply and R&D systems, and developing from local operation to global operation, etc.

Disadvantages: Jing’an District having few project reserves for foreign investment and cooperation, limited land, insufficient resources and projects for attracting investment, certain difficulties in continuing to attract a large amount of investment in the next few years.

Support: The sectors for foreign investment are mainly in the service industry, and the priority is to develop the building economy. We should vigorously attract the investment, R&D, sales and management centers and regional HQs to setter in the district.

Countermeasures: In the next five years, we should continue to expand the fields and means of utilizing foreign investment, open new channels, develop the large, medium and small scales simultaneously, and take active and effective measures to ensure the realization of projected goals. For this purpose, firstly, we should continue to promote the utilization of foreign investment in the development of Jing’an Nanjing Road Area, the protection and development of the south and the rebuilding of the old areas in the north, press forward with the functional development of Jing’an Nanjing Road Area, and quicken the construction of the building projects involving foreign investment so as to facilitate the implementation of service projects. Secondly, we should step up the efforts in attracting investment without expropriating new land and introducing large and reputed enterprises, and quicken the development of building economy. We should give priority to attracting foreign investment in the modern service industry, try to introduce two or three regional HQs or R&D, sales and management centers of multinational companies into Jing’an District every year, and encourage the existing foreign enterprises to increase their investment and shares and expand their business in China; we should encourage foreign companies to upgrade their Shanghai offices into enterprises; we should transform, rebuild and upgrade the existing projects through M & A by foreign enterprises or space swapping; in addition, we should reinforce the follow-up management and service work for the existing foreign enterprises so as to promote their healthy development. We should do a good job in attracting and retaining foreign investment, promoting its rapid growth and increasing its contribution, from which the government, enterprises and the society can all benefits. Thirdly, we should make full use of the resources and advantages of Jing'an District in education, sanitation, culture and sports, quicken the steps in utilizing foreign investment in the related fields when the time is right, steadily promote the industrialization of social undertakings, and further strengthen the comprehensive services in the district. Fourthly, we should improve the mechanism for investment promotion, give full scope to the initiative of all quarters of the society and take a market-oriented road of attracting investment. In particular, we should make full use of the channels and information advantages of internationally well-known intermediary agencies in collecting and learning about the latest development in foreign investment, thus drawing upon the power of foreign agencies in attracting foreign investment. In addition, we should fully utilize the overseas offices of Shanghai Foreign Investment Commission, the foreign foreign-related channels of the foreign enterprises in the district and the role of trade associations. When conditions permit, we may launch the special projects for attracting investment by “going out”. Fifthly, we should take advantage of the channels and information resources of Jing’an District in foreign affairs, enhance the communication and cooperation with Shanghai Foreign Affairs Office, Shanghai People's Association for Friendship with Foreign Countries, Shanghai International Exchange Center, the Economic and Commercial Sections of the Foreign Consulates in Shanghai and other institutions, make Jing’an District better known to the outside world through foreign exchange, and promote the coordinated development of foreign affairs and foreign trade and economy in Jing’an District by holding such activities as the information seminar about Jing’an District, promotion conference of projects open for investment and interaction between domestic and overseas enterprises with the help of international friends and foreign organizations stationed in Shanghai.

II. Looking ahead to the future and maintaining the steady growth of foreign trade

Advantages: International manufacturing industry continues to move to China, which boosts the exportation of domestic products; the Chinese products in a complete range of varieties, with good quality but low price and with fast pace of innovation are winning over more and more transnational purchasers; after the policy restrictions relaxed, more and more enterprises and individuals begin to engage in foreign trade, the market structure is getting increasingly diversified and our abilities to participate in international competition are on a steady rise; meanwhile, some enterprises with strong power and comparative advantages begin to take a "going out" strategy in development and directly take part in the international competition. In the next few years, Jing’an District will continue to have good prospects in exports.

Disadvantages: international trade protectionism; high pressure of RMB revaluation; rising costs in raw materials and production; limited land resources, lack of conditions for developing production-oriented exportation in the district, most exporting enterprises having problems like small scales, lack of competent personnel and insufficient funds; limited product resources for exports; influence of the state policy on export tax rebates, etc. All this, to some extent, hinders the development of foreign trade in Jing’an District.

Support: mainly relying on the exports of key enterprises.

Countermeasures: Firstly, we should continue fostering the capacity of sustainable growth of exports in the district. While putting stress on serving and promoting the large exporters and preventing the exports of Jing’an District from drastic fluctuations, we should continue to cultivate new growth areas of exports and steadily increase the momentum for future development of the district. In addition, we should expand exports by introducing transnational purchase or sales companies. Secondly, we should continually enhance the market competitiveness of exporting enterprises. We should give priority to implementing the strategy of promoting trade by applying scientific and technological advances, encourage enterprises to make technological innovation and new product development, steadily increase the scientific contents and added values of export commodities, continue to upgrade the structure of exports, and vigorously promote the exports of electric products, software products and high- and new-tech products. Meanwhile we should guide enterprises in developing their own brands and obtaining all kinds of certification, and gradually increase our abilities in anti-dumping and fighting all kinds of obstacles in international trade. Thirdly, we should continue to reinforce the efforts in market expansion. While guiding enterprises in the in-depth development of the traditional market, we should vigorously develop the burgeoning markets in Russia, Europe, Africa, West Asia, Middle East and Latin America. We should draw support fromthe newly-built transnational purchase platform of Shanghai in entering the international commercial chain network as soon as possible. Fourthly, we should actively develop the electronic business. We should encourage enterprises to quicken their steps in adopting the internationally advanced manners of operation and management. We should make good use of the internet technology and actively promote the electronic trade, so as to capture more trade opportunities, reduce the costs and increase efficiency. Fifthly, we should encourage the relatively competitive enterprises in Jing’an District to seek development overseas. For one thing, we should careful summarize the past experience and lessons in overseas investment and development, guide the overseas projects (especially those belonging to the enterprises of the district) to switch “from underground to aboveground”, which can make management and policy support easier. For another, we should encourage the powerful and relatively competitive enterprises and projects to “go out” through various means to develop the overseas resources, open factories, set up shops, process supplied materials and conduct trade, etc. For the third, we should pay sufficient attention to the preliminary investigation, research and analysis for the purpose of reducing haphazardry and lowering investment risks. Sixthly, we should reinforce the efforts in upgrading the export structure, continue to develop the processing trade through such measures as “actively introducing new enterprises of processing trade, encouraging the existing enterprises of processing trade to grab more purchase orders, prompting the production-oriented enterprises to carry out processing trade or to expand self-operated exports, guiding professional foreign trade companies in gradually readjusting export structure and making investment in the suburbs or setting up factories through equity participation”, continue to develop the processing trade, and t do a good job by increasing exports while reducing the fiscal burden of the district government.

III. Strengthening the advantages and quickening the development of service trade

Advantages: continuous decrease of restrictions in the field of service trade; more frequent international exchange, more and more people coming to Jing’an District for investment, business, exhibition, sightseeing and leisure; foreign-related services getting increasingly diversified, the fields of service getting wider, and the service function of the district getting increasingly well-developed, etc.

Disadvantages: limited land, and limited resources of business and office buildings, etc. Despite the current rapid growth, the general scale of service trade is still not large enough, lacking special features and brands and having decentralized distribution and weak clustering and radiating functions.

Support: projects in the field of modern service industry.

Countermeasures: In the next five years, as China further opens up the field of service trade to foreign investment, we should seize the opportunities and put stress on the following tasks in line with the functional positioning of Jing’an District. Firstly, we should maintain the existing brand advantages of the district. With the continuous development of Jing’an Nanjing Road Area, we should introduce a large group of internationally well-known brands and service suppliers, continue to improve the commerce and business image of the district, steadily enrich and strengthen the district function of foreign-related comprehensive services, and build Jing’an District into one of the best areas of foreign-related business, office, exhibition, tourism and leisure in Shanghai. Secondly, we should give priority to developing the foreign-related sectors of the modern service industry. We should vigorously introduce prestigious companies and institutions from both overseas and other parts of China, quicken the process of forming the center of modern service industry of Jing’an District, bring the clustering effect into full play, and expand the general scale of modern service industry in the district. Thirdly, we should take advantage of Jing’an District being a pilot area of service trade. While making good use of all the existing specially granted qualifications, we should take the initiative in communicating with the higher competent authorities, continue to be among the first ones in experimenting, and steadily expand new sectors of the service trade. Fourthly, we should particularly promote the development of foreign-related services of social undertakings like education, sanitation and culture. We should promote the industrialization of social undertakings by drawing support from external forces, develop our special characteristics and brands, and further improve the performance of foreign-related services.