Foreign businesses meet with mayor

Some 50 corporate titans from 16 countries has sit down with Shanghai Mayor Ying Yong on Sunday to exchange views on advancing the city’s role as China’s economic hub.

The annual International Business Leaders’ Advisory Council is now in its 31st year. Its theme is “Enhancing the Capacity and Core Competitiveness of Shanghai.”

Global leaders from companies including Allianz, PwC, EY, Bain, HSBC, Roche and Danone will attend the annual brainstorming sessions, which have served as a beneficial think tank as the city fine-tunes its business environment to attract more business from overseas and establish its reputation globally.

For example, council members at one of their earliest meetings stressed the importance of modern highways and Metro lines as part of an integrated transport network. That infrastructure has been built.

At another meeting, they gave recommendations on how the mayor could attract more foreign investment through “soft power,” such as perfecting details in its hosting of the 2010 World Expo.

It’s a competitive world and getting more so. Shanghai has implemented a series of reform policies aimed at staying on course toward its goal of becoming a major global hub of commerce, finance, research and cutting-edge industries.

“When we talk about the business environment, just ‘great’ isn’t good enough,” Mayor Ying told last year’s council session. “The city is determined to play a part in promoting economic globalization as well as trade and investment facilitation.”

Last year the city hosted the first China International Import Expo, an event that will be repeated next month. At the opening of the expo, Chinese President Xi Jinping announced the launch of the new STAR startup market on the Shanghai Stock Exchange, an expansion of the successful free trade pilot zone in the city and Shanghai’s leading role in the integrated growth of the Yangtze River Delta region.

“Shanghai should better serve China’s strategy of reform and opening-up,” Xi said. “Only through such a process can Shanghai further develop itself.”

Xi’s announcements last year weren’t idle words. The STAR Market has been trading for three months as a platform to encourage technology startups. The free trade zone has been expanded to include Lingang as a site for policy innovation. Governments in the delta region are undertaking projects on all levels to harmonize economic growth, tourism and trade.

Shanghai, of course, has long played a leading role in national strategies and has greatly benefited from that leadership.

This year’s 70th anniversary of the founding of the People’s Republic of China provides a benchmark in tracking that progress.

Last year, Shanghai’s gross domestic product was 3.27 trillion yuan (US$480 billion), towering over the 2.03 billion yuan of 1949, with average annual growth of 9.8 percent. Per-capita GDP skyrocketed to 135,000 yuan last year from 274 yuan 70 years earlier, topping for the first time the US$20,000 standard used to define “advanced” economies.

“Shanghai’s development is an epitome of how China has geared up to integrate into the world’s economy,” said Su Ning, a researcher at the Institute of World Economy under the Shanghai Academy of Social Sciences.

The mayor’s advisory council was started in 1989 by former Mayor Zhu Rongji, who went on to become Chinese premier. A generation of mayors has heeded his advice that the city seek counsel from the biggest and most important companies in the world.

And they have. In 1990, Zhu announced that Shanghai’s Pudong, then largely farmland, would become a state-level site for modern development. In 2009, then Mayor Han Zheng, now a Chinese vice premier, said Disneyland would come to Shanghai, raising the city’s stature as an entertainment site.

In the beginning, the council had only 12 members from seven countries. Today, it has grown into a true international think tank. Whereas the early councils were dominated by business leaders from manufacturing industries, today’s panels have been expanded to span finance, pharmaceuticals technology and other sectors.

Michael Diekmann, chairman of the supervisory board of Allianz, will chair the mayor’s advisory council this year.

“Shanghai is on the pathway toward its ambition of becoming an excellent global city,” Diekmann said. “Being a platform aimed at pooling together global excellence and wisdom, the council can play an even more active role in Shanghai’s evolution.”