By 2005, listed companies will account for 40 to 50 percent of all those in the industrial sector, compared with last year's 15 percent, a top city official said.

To achieve that, more market-oriented operations, including listings, mergers and acquisitions, will be pushed during the five-year period, said Huang Qifan, chief of the city's Economic Commission.

"By encouraging industrial companies to link more with the capital market, the structure of the city's manufacturing sector will be optimized," said Huang.

Huang's message was conveyed at a recent briefing on the overall performance of Shanghai's industrial sector last year and on plans for its development in the 2001-05 period.

Shanghai now has more than 70 listed industrial companies whose net assets amount to some 70 billion yuan (US$8.4 billion). The companies generated earnings of nearly 8 billion yuan (US$963.9 million) in 2000, accounting for more than one-fifth of the city's total industrial profits.

"Shanghai's industrial sector is expected to develop more blue-chip listed companies like Baosteel," Huang noted.

The largest of its kind in China so far, the initial public offering of the Baoshan Iron & Steel Co Ltd was 1.9 billion shares. The company is an arm of China's largest steel conglomerate, the Shanghai Baosteel Group Corp, and its listing on the A-share market last November raised about 7.8 billion yuan (US$939.8 million).

Also stressed in Huang's speech was the urgent need to raise industrial productivity. Shanghai's present industrial added value per capita reached nearly US$10,000 last year, but the city government anticipates that figure to jump to US$20,000 by the end of 2005.

The government has decided to pour 90 billion yuan (US$10.8 billion) annually into the city's industrial sector over the next five years. The industrial investment last year totalled 60.5 billion (US$7.3 billion).

Foreign investment will also continue to be a strong boost behind the city's industrial development, according to Huang, who predicted that the flow of foreign investment into the industrial sector is expected to go up by 50 percent this year.

Shanghai's industrial sector saw a total contracted foreign investment of US$4.8 billion in 2000, a 140 percent surge from 1999.

The sector's expected rapid growth will not be at the cost of more lay-offs, the director said.

Workforce restructuring is still needed in such industrial sectors as mechanical and electrical manufacturing, light industry and the nonferrous metal sector in order to raise productivity, Huang admitted.

However, the city's overall number of workers will remain unchanged, as more new job opportunities in other sectors will surface as a result of Shanghai's expected bullish industrial growth in the coming years, he said

(China Daily 01/18/2001)