China's central government has approved a plan to merge Shanghai's Nanhui District into Pudong New Area and create an even larger economic powerhouse to help drive the city's effort to become a major international financial and shipping hub.

 

Under the merger, Pudong's land area has more than doubled, growing from around 533 square kilometers to 1,210 square kilometers, a Shanghai government spokesman said yesterday in announcing the "recent" action by the State Council.

 

Population will jump from 1.94 million to 2.69 million, and the new area's combined economy will swell as well.

 

Pudong New Area's gross domestic product amounted to RMB 315 billion (US$46.2 billion) last year, nearly one-fourth of Shanghai's total economic output. Nanhui District's GDP soared 20 percent to RMB 54.8 billion in 2008.

 

This super sized district will now enjoy all the preferential policies that were previously reserved for Pudong, such as tax breaks to lure professional talent and streamlined investment procedures.

 

Now, one government entity will be in charge of major shipping facilities such as the Yangshan Deep-Water Port, formerly in Nanhui and one of the world's largest ports, and the Waigaoqiao Port in Pudong.

 

Established in 1990 as a special economic zone, Pudong New Area has been dubbed China's Wall Street or City of London. The former farmland on the east side of the Huangpu River is now home to the regional headquarters of many big-name financial institutions, including HSBC, Citigroup and MetLife.

 

But with the deepening of reform, Pudong New Area has found itself short of resources to spur further development, said Ren, who compared it to a good chef in need of more ingredients.

 

Nanhui District was located to the south of Pudong's financial zone and has developed rapidly after launching projects such as the Yangshan port and Lingang New City, a residential and light-industry zone near the deep-water port.

 

It has lured other big projects as well. Among them, the Aviation Industry Corp of China, the country's largest aerospace company, has decided to make jet engines in Nanhui.

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