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Part One Macro Environment for Foreign Investment in Shanghai
 

2. Development of Industries

2.2 Development of the Manufacturing Industry

2.2.1 Basic Survey of the Manufacturing Industry

It has been long time that the proportion of the added value of Shanghai manufacturing industry stayed at around 50% in the total value of the whole city’s GDP.During the “10thFive Year”, Shanghai manufacturing industry contributed to the economic growth of the whole city at an average rate of 53.2%. Each 100 million added value of the manufacture industry drove the added value of the third industry from 30.6 million in 1990 up to 56.5 million. (See Table 2-2The total industrial output and growth rate in the “10th Five Year”)

Table 2-2The total industrial output and growth rate in the “10thFive Year”

During the“10thFive Year”, Shanghai’s manufacturing industry grew up at an average rate of 18.9%, and its added value increased at an average rate of 15.4%. In 2005, the whole city realized

1687.68 billion of total output of manufacturing industry, which keeps a double-digit increase in 16 straight years. The industrial gross product of foreign-invested enterprises recorded 62.2% of the whole city. In 2005, the gross industrial output of Shanghai was 6% of the whole nation, seating the 5th, and the income of the main business was 6.7% of that of the whole nation, and the total amount of profit was 6.5% of the whole nation.

2.2.2 Structure of Industry

Shanghai manufacturing industry enjoys an advantage of having a complete sector with perfect configuration. According to the classification standard for the industries under national economy, Shanghai almost touches all the 30 sectors of manufacturing industries. There are 169 manufacturing industries in the whole nation, and 161 are in Shanghai. In 2005, electronics, machinery, light industry, petrol-chemical, metallurgy and car-manufacturing grew at 22%, 19.8%, 16.3%, 12.0%, 8.5% and 6. 6%, respectively.

2.2.3 Geographic Layout

In the recent 25 years, the manufacturing industry of Shanghai has achieved historical expansion from 100 km2to 600 km2and is spreading further to the whole of 6,000 km2. For the time being, it has primitively formed a layout of the six pillar industries, industrial zones of municipal or higher level as a support, and the key industrial zones of the district level as compliments. According to statistic, 50% of manufacturing operations in the 6 pillar categories are located in industrial zones.

During the “11th Five Year”, Shanghai will expedite the manufacturing industries to be centralized into the industrial zone of national level and/or municipal level. In 2010, the added value of industrial zones of municipal and/or higher level will reach more than 75% of the whole city. The construction of international auto city and precision steel will be basically accomplished. The construction of Shanghai chemical industry park, the national level micro-electronic industry base (including Pudong Micro-Electronic Industry Corridor, Caohejing New Technology Development Zone and Songjiang Industrial Zone) and biopharm base will be accelerated. Great efforts will be made for the construction of Lin Gang equipment industry base and Shanghai shipbuilding base (See Table 2-3Shanghai Six Pillar Industry Bases).

2.2.4 Status of Foreign Investment in Main Manufacturing Industries

Equipment Manufacturing To the end of 2005, there were 2074 foreign-invested enterprises with total assets of 76.8 billion,71% of the whole city. These enterprises achieved gross industrial output of 584.2 billion, 79% of the whole city. They hire 600,000 employees.
Electronic Manufacturing
In 2005, the income from foreign electronic manufacturers reached 93% of the whole sector,

those in the whole sector. They achieve a gross industrial product of 90.3 billion, 88% of those of the whole sector.Among the top 30 enterprises in the car manufacture industries in Shanghai, 25 are foreign-invested enterprises.

Petrol chemical Industry and Fine Chemical Industry
By the end of 2005, 339 foreign-invested enterprises realized turnover of 102.2 billion from their main business operation, 57% of the whole sector.

Biopharm manufacturing.
In 2005, this industry achieved annual gross industrial output of 13.4 billion, 48.7% of the whole sector.

2.2.5 Main Target of Manufacturing Industry

Industrial Scale:
In 2010,the Added value of manufacturing industry will reach 700 billion, and total manufacture industry output will reach 2500-2700 billion. There will be more than 10 large-sized groups with an annual output of over 50 billion, 4 to 5 groups ever achive more than 100 billion.

Structure of Industry:
In 2010, we will keep the competitive advantage of backbone industries including IT, petrol chemical, automobile and steel industry, etc., strive to develop the top end and forefront of equipment manufacturing industry, expand newly emerged industries such as photoelectron, solar energy, new materials, etc., enhance strategic industries such as ship building, aerospace and aviation, etc., and to develop steadily urban-friendly industries.

Technology Level:

In 2010, enterprises will increase the value of their new products from 240 billion to around 540 billion. The R&D expenditure by the whole society will reach 3% of their sales volume, of which 65% is invested by enterprises. The rate of contribution to the economic rise from the technological progress is to be 65% and above. The number of R&D centers of the multi-national companies will exceed 300.

Creation Brand:

In 2010, we will form a number of enterprises with influential brands, 5-7 internationally recognized brands and 10-15 domestic brands. There will be 3 to 5 industrial zones specialized in famously branded products and around 10 exhibitions for well-known brands.

Layout of Industry:

In 2010, the construction of six pillar industry bases will be basically accomplished. 4 large industry bases namely micro-electronics, international auto city, Shanghai chemical industry park and fine steel base will have their output exceeding 150 billion. The output value of the industrial zones of municipal or higher level will exceed 75% of the city’s total. There will be 5 industrial zones with their annual output exceeding 100 billion.

Intensive Use of Resources:
In 2010, in the field of manufacture industry, there will be a decrease in energy consumption per

  • 10,000 of added value down to 1.05 tons of standard coal in 2010 from 1.22 tons of standard coal in 2005 with an average rate decrease of more than 4%. Key industries will decrease their energy consumption per
  • 10,000 of added value by an average rate of decrease at 5%. The developing zones of state level and municipal level and main industry bases will decrease energy consumption at an annual rate of 5%. The investment density on new industrial land will not be lower than billion per km2.

Environment Protection:

In 2010,The emission of the liquid waste and exhaust per 10,000 of industrial added value will decrease by 20% and 15% respectively. 80% of industrial sewage will be recycled. 95% of discharged industrial water and gas will reach standards. All the manufacturing zones of municipal level and above will obtain the certificates of ISO14000 and ISO9000. 3 to 5 integrate industrial zones will be created for sustainable recycling.

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