Shanghai Fengpu Industrial Park
Export Processing Zone

(2) The structure of foreign investment in the third industry Abide by China's WTO commitments, Shanghai strongly encouraged foreign investment into modern service industries. The investment in commercial service, logistic, Commerce, IT Service and financial service increased quickly at the rate of 36.9%, 180%, 126%, 84.9%, and 48% respectively(See Table 1-4 The Structure of Foreign Investment in The Third Industry in Shanghai, 2005).

Table 1-4 The Structure of Foreign Investment in the Third Industry in Shanghai, 2005

COMMERCE In 2005, 1117 foreign-invested commercial enterprises were approved in Shanghai with a total contracted value of USD 1.33 billion. The number of foreign-invested commercial enterprises approved in 2005(Wai Gao Qiao Free Trade Zone excluded) is nearly 4 times of that approved in all previous years, and approximately 40% of the whole country; contracted value of foreign investment is 5.7 times of that in 2004. Together with the increase of number, some world -known brand came to Shanghai too.

LOGISTICS In 2005, 327 foreign invested logistics enterprises were newly approved with total contracted value of USD 1.37 billion, which was 5 times of that in 2004. 4 marine transportation enterprises were also apprared that filled the blank of foreign invested domestic marine transportation enterprise. Up to the end of 2005, 1818 foreign-invested logistics enterprises had settled themselves down to Shanghai with total contract-ed value of USD 4.03 billion.

Financial Service Enterprises In 2005, 14 financial service enterprises were approved with a total contracted value of USD 200 million. The number of foreign-invested leasing Companies was equal to the total number of that introduced in during the past 20 years, among which, 7 companies were financing & leasing companies with their individual contracted value above USD 10 million. Shanghai approved for the first time foreign-invested companies for financial training, management of non-performing assets, data processing of credit cards and insurance brokerage.

NEW FIELD OF FOREIGN INVESTMENT In Shanghai, 2005, there were breakthroughs in 30 fields including car financing, assets administration, leasing, general hospital, education, and commerce, as well as, there existing new progress at the facet of bringing in foreign investment to the construction of the city's basic facilities and the re-organization and reform of state-owned enterprises. In 2005, Shanghai pioneered a number of trial projects including: joint venture enterprises such as game organizing, water engineering, third-party logistics and money brokerage, etc., and also others such as foreign- invested medical institute specialized in cancer diagnosis and treatment, waxwork showroom, units specialized in maintaining, precision aviation electronics, joint venture language training center, Hong Kong and Shanghai joint venture HR agency and music training centers, etc.

(3) About the second industry

In the “10 th Five Year”, the manufacturing industry brought in foreign investment of USD 32.96 billion including a number of extra large-sized IT and chemical industry. In 2005, decrease of foreign investment took place in the second industry. While, equipment, chemical industry, paper manufacturing, construction materials increased at the rate of 0.5%, 35. 6%, 479.5% and 32.4% respectively (See Table 1-5 Structure of Foreign Investment in the Second Industry, Shanghai, 2005). In 2005, we approved 50 foreign investment enterprises of Electronic and IT industry with a total contracted value of USD 1.6 billion, 12% of the total contracted foreign capital of the whole city. A number of top-sized IT projects with potent investors were brought in. Some new products such as nutrition capsule, fine materials, chip foundry, biomedicine and engineering technology were introduced into Shanghai for their manufacturing.

14 construction projects were approved. Famous American construction enterprises such as Bechtel

Fluor etc. came to Shanghai.

1.2.2 Ownership Structure of Foreign Investment

Wholly foreign-owned enterprise is the main form of foreign investment in Shanghai. 2005, The contracted value of foreign investment in wholly foreign-owned enterprises summing up USD 10.9 billion being 79.1% of the total contracted value of foreign investment introduced into the city. The percentage of the wholly foreign-owned investment went upward steadily(See Table 1-6 Property Structure of Foreign Investment in Shanghai, 2005).

1.2.3 Structure of Foreign Investment Origin

Foreign investments in Shanghai come from: 120 countries or regions. In 2005, the top seven countries (economics) of foreign investment are: Hongkong - USD 1.3 billion, British Virgin Islands - USD 2.37 billion, EU - USD 1.76 billion, Cayman Islands - USD 1.3 billion, Japan - USD 1.16 billion, USA - USD 0.78 billion, ASEAN - USD 0.76 billion (See Table 1-7 Structure of Foreign Investment Origin in Shanghai, 2005).