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Economic conditions

Shanghai Opens Up to Foreign Investment in Service Sector and Equipment Manufacturing

Strategic Insights

— 1 min read

Shanghai has made a significant move in response to the central government's call for greater efforts in attracting foreign investment in the nation's service sector. The city has committed to opening more fields of the service sector to foreign investors by highlighting investment in equipment manufacturing in its 2005 Industrial Catalogue of Priorities for Foreign Investment. This move is seen as a major step towards upgrading Shanghai's modern services sector and advanced equipment manufacturing, and positioning the city as an international centre for finance, trade, and shipping by 2020.

Key Takeaways:

  • Shanghai has committed to opening more fields of the service sector to foreign investors, including finance, logistics, distribution, public services, scientific research, real estate, tourism, and consultation, with new additions such as cultural brokerage, theme park, and convention equipment construction and running.
  • Equipment manufacturing has jumped to the top priority in the manufacturing section, with the addition of civil aircraft manufacturing, digital medical equipment manufacturing, and refined mould development and design.
  • The Shanghai government has set a target of establishing itself as an international centre for finance, trade, and shipping by 2020.
  • Shanghai's service sector accounted for 48% of its gross domestic product last year, well above the nation's average of 32%.
  • China has opened up 62% of its services market, compared with 80% for developed markets and 20-40% for developing nations.
  • The total value of the country's services sector rocketed to US$128.6 billion in 2004 from US$4.6 billion in 1982.
  • Shanghai's service trade took up 2.8% of the global total and ranked ninth last year, up from the 34th in 1982.

Statistics:

  • 62% of China's services market has been opened up.
  • Shanghai's service sector accounted for 48% of its gross domestic product last year.
  • The total value of the country's services sector rocketed to US$128.6 billion in 2004 from US$4.6 billion in 1982.
  • Shanghai's service trade took up 2.8% of the global total and ranked ninth last year, up from the 34th in 1982.

Sources:

  • "Shanghai commits to opening more sectors to foreign investors", Asia Pulse, July 12.
  • "China's service trade accounted for 2.8% of the global total in 2004", Ministry of Commerce, cited in XIC.

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