guangzhou Business Guide - Economic Overview

guangzhou Business Guide - Economic Overview

Vital Statistics (2006)
GDP: RMB1.03 trillion
GDP per Capita: RMB 57,310
Economic Growth Rate: 12%
Population: 10.25 million (urban) - 3.43 million (rural)
FDI: US$7.12 billion
Annual Average Wage: RMB24, 398
Government Effectiveness Rating: 26th
2006 Chinese Cities Competitive Rating: 3rd  

Economic Overview

What more can be said of perennial mainland favorite Shanghai? With a sometimes gritty and rather colorful 700 years of embellished history behind its rise as one of East Asia's international financial centers and mega-metropolises, the city evokes all the feelings of nostalgia and excitement that a market-based economy can. Since China's reform and especially since the 90's when Shanghai implemented the strategy of opening up and developing the Pudong area, the city's economy, social structure, and appearance have all undergone huge changes and the stately Pearl Tower now presides, not just over the Bund and the Huangpu River, but over a vast commercial giant stretching out in every direction.

The city's cosmopolitan flavor originates from its historical role as an early entry point into the mainland markets. Foreign companies have been doing business here for decades, thus providing a feeling of stability and comfort for an increasing number of foreign firms seeking a Chinese mainland presence. The city is host to the Asian corporate headquarters of over 130 multinational companies and/or conglomerates, with 45 of them setting up in the new Pudong area.

Shanghai is truly a city of firsts in China. After China's accession to the WTO, Shanghai became the first mainland city to open up all areas of retailing, banking, insurance and telecommunications to foreign investment. Shanghai continues to deepen its economic reform process and has accelerated market access and trade programs. From 1992 through 2006, total GDP has experienced double-digit growth. By 2006, GDP reached RMB 1.3 trillion – yes, that's right – 1.3 trillion RMB, an increase of 12% over the previous year and which ranked Shanghai No.1 among China's big four municipalities. Expectations are; that by the end of 2007, per capita GDP in Shanghai will be US$7500, while at the same time, the rate of unemployment will be between 3%-5% and inflation between 2%-4%. Total investment in fixed assets reached 392.51 billion RMB, up 10.8 % from the previous year. GDP gains over the past 11 years are shown below:

Economic Contribution Ratios by Sector
In 2006, the economic contribution ratio of the primary industries including agriculture, forestry, animal husbandry, and the fisheries was 0.9%; while manufacturing, the value added sector and construction combined totaled 48.5%; and the tertiary sector made up 50.6% of total economic output.

Foreign Trade and Cultural Ties
Shanghai's burgeoning exhibitions and conferences sector is one of the city's greatest tools in promoting the formation of an international marketplace and seeding interest from companies seeking to do trade with China. The exhibition, conference and convention industry experienced an amazing growth rate of 30% in 2006, coming on the heels of a string of major world-class commercial and political conferences convening in Shanghai in recent years, such as the Fortune 500 Forum, the APEC Summit, the Shanghai 5 Summit, and the Annual Meeting of the Board of Governors of the Asian Development Bank to name a few.

Shanghai will also play host to the 2010 World Expo and is sure to set several new milestones for the event. For instance, it is the first time the Expo will be held in a developing nation. Furthermore, with its rising international prestige and an investment of over US$3 billion, Shanghai has made it a priority to hold the largest Expo in terms of space and visitors in the history of the event.

Shanghai enjoys friendly relations, regular cultural and academic exchanges with more than 66 cities in 50 countries world-wide and added Kazakhstan, Bulgaria, Portugal and Sri Lanka in 2005 to its growing list of now 55 countries that have established consulates in Shanghai.

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