The Great Change in Shanghai

Shanghai is the largest city in China and has been one of its major socioeconomic centers. By the end of 2000, with a population of only 1% and a land area of 0.06% of the nation's total, Shanghai contributes one twelfth of the nation's total industrial output value, one eighth of national financial revenue, one sixth of the country's port cargo handling volume, and one fourth of the country's total exports. In addition, the city has been playing a leading role in the nation's reform and opening movement, including industrial upgrading and science and technology renovation. In the early 1990s, the central government decided to accelerate the development of Shanghai into a world economic, financial and trade center and to boost the economic development of the whole Yangtze River area where the city is located. The city has achieved an astounding economic growth since then.

Nowadays, the growth of Shanghai’s economy has made a new record. Last year, Shanghai’s total GDP was RMB540.8 billion with a growth rate of 10.9%. This was the eleventh year in a row when Shanghai achieved two-digit rate economic growth. Per capita GDP of Shanghai was close to $5,000($4,909). The average disposable income of urban and rural citizens in Shanghai has increased by 11.5% and 6.2% year-on-year.

Addressing a question on the growing expectation of inflation, the Shanghai Statistics Bureau’s chief economist Cai said consumer prices in Shanghai will register a mild, controllable growth this year. And a credit market with ample liquidity may accelerate the pace, but it will be mild and within control. The city's unemployment rate stood at 4.3 percent, virtually unchanged from an earlier year.

Then we must ask what make the Shanghai’s economy growing so fast?

Favorable policies from the central government have contributed to the dramatic development already achieved in Shanghai. The central government can continue to assist the metropolitan economic strategy by bolstering both physical...