Economic Development in Shanghai and the Role of the State

Abstract

This article examines the economic development process underlying Shanghai's rapid urban transformation in the 1990s. It analyses the key factors that have contributed to the economic development there and assesses critically the role of the state in this process. It concludes that the sheer scale of investment and the national contexts, rather than far-sighted economic management at the local level, are the keys to its economic success. The article further argues that the prevailing views regarding the local state-market relationship in Shanghai need to be revised: beneath the façade of a proactive and omnipotent state are numerous instances of failure and ineffectiveness. Moreover, the market is much more than a tool in the state's decision-making. It is a growing force that the state is trying hard to control, but with increasing difficulties.

Territorial Competition in China and the West

“…In Shanghai, Zhang (2003) reports the use of a series of novel channels, including as well as budgetary revenues, land leasing, funds from the stock market, state-directed credit allocation, and foreign direct investments. In another case, Gujiao in Shanxi province, Herrmann-Pillath and Feng (2004) find infrastructure being financed partly through bargaining with uppertier authorities for a greater share of revenue, but also more innovatively, with 'reverse Build-Operate-Transfer contracts', privatisation of public services, government enterprise, sale of land use rights and public-private partnership.…”

Aspects, Models and Measures for Assessing the Competitiveness of International Financial Services in a Particular Location

“…Indeed, Offshore Financial Centers (OFCs) and International Financial Service Centers (IFSCs) often have been planned as part of an industrial development policy by national or subnational units of government. Gordon (1998) and Zhang (2003) provide vivid accounts of the strong and quite visible hand of government in particular with regard to Shanghai's Pudong New Area Liujiazui development. 5 For three or four decades after 1949, Shanghai had actually been penalized, rather than favored, by the central government.…”

A tale of two cities – the development and reform experiences of Shenzhen and Shanghai

“…On the other hand, the other three zones are oriented toward manufacturing activities. Whilst the policies at par with those offered to the five SEZs could potentially provide a favourable business environment to the manufacturing zones, investors in Pudong have been offered particularly favourable conditions for operating financial and business services (Zhang, 2003(Zhang, : 1557. 40 The official approval came two years later in 1992.…”

“…After the economic reform in 1986, the Jing'an District Branch of the Shanghai Trust & Investment, a subsidiary of the ICBC, started over-the-counter trading of shares and underwrote for the Feile Audio Equipment, probably 'the first share' in new China (CSRC, 2008: 158). 44 After the establishment of a stock exchange in Shanghai, an important reform was a pilot scheme to issue RMB-denominated shares to foreign investors aimed at attracting foreign capital to the securities market (CSRC, 2008: 170 Shanghai invested an accumulative amount of RMB 1,384 billion in fixed assets in the 1990s, building the infrastructures required to attract investors (Zhang, 2003(Zhang, : 1554. For example, Shanghai port only began to handle container shipping in 1983, but now it is the largest port in the world.…”