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Multinationals Enamored of Shanghai's Pudong District

Early before world media focused their attention on this east China municipality, where the Ninth Asia-Pacific Economic Cooperation Economic Leaders Meeting was held successfully, global companies like Intel, GE and Bell had already been attracted to the city's economic nerve center, Pudong New District.

Located in the eastern part of Shanghai and with a population of some 1.5 million in an area of 522 square kilometers, Pudong has won global capital's trust because of its continuous development momentum.

Since its establishment 11 years ago, the district has introduced more than 7,000 foreign investment projects from nearly 70 countries and regions, with total investment hitting 40 billion U.S. dollars.

Overseas-funded enterprises have contributed more than 50 percent to the district's gross domestic product, revenue and exports.

As Japan, the European Union and the United States witnessed a lingering downturn in economy and reports of dwindling investment were rife earlier this year, Pudong saw rises in both export value and the use of foreign funds from January to August.

During this period, 557 foreign-funded projects were approved, up 25 percent on an annual basis; and they involved a contractual foreign investment of 1.3 billion U.S. dollars, up 73 percent year on year.

Last month, Intel announced a plan to spend 300 million U.S. dollars expanding its chip production line in Pudong.

Chen Junsheng, vice-president of Intel, said, "The enlarged investment of Intel not only represents its satisfaction with its past performance in Pudong, but also indicates its hopes to better avail itself of the district's advantages in future."

Of the world's top 500 multinationals, 146 have invested in more than 200 projects in Pudong. Twenty-five of the multinationals have moved their regional headquarters in the district and established a number of technological development organizations and trading companies there.

Over the past two years, foreign-funded enterprises in Pudong have kept increasing investment, with the additional investment accounting for nearly 40 percent of the district's total foreign funds.

Besides, some 600 investment companies have swarmed into Pudong, with operating capital totaling 100 billion yuan (about 12.05 billion U.S. dollars).

The latest survey by the Fortune magazine revealed that 92 percent of multinationals are prepared to set up business headquarters in China, and 25 percent of them favor Pudong.

Among the elements which make a large corporation decided to invest in China are its potential for long-term development, legal environment, work efficiency and to what extent it can follow international practices.

Pudong, widely recognized as a key bridge connecting the domestic and international markets, has long served as the nation' s vanguard for joining global competition.

With comprehensive advantages in geography, infrastructure, investment environment and human resources, experts predict, Pudong will replace Hong Kong and Singapore in 10 years as the preferred place for multinationals to set up their Asia-Pacific headquarters.

To realize this goal and meet the challenges posed by China's entry into the World Trade Organization, Pudong has taken the lead in Shanghai in reforming its examination and approval procedures for foreign-invested projects by cutting unnecessary formalities, allowing direct registration of enterprises with the relevant authorities, slashing red tape and guaranteeing a low-cost investment environment stressing fair play.

Pudong has also mapped out eight preferential policies to encourage foreign-funded production companies and investment institutions.

Zhou Yupeng, vice-mayor of Shanghai, said that Pudong will strive to become China's leading economic center, especially in the fields of enterprise management, cost control, capital management and technical innovation.

Zhou said Pudong will redouble its efforts to improve the service industry by developing diversified financial services, modernizing its distribution sector and boosting consultation business, so as to create a better investment environment for both global and domestic capital.

(People's Daily October 26, 2001)

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