From: mte152s@vaxc.cc.monash.edu.au
Newsgroups: talk.politics.china,soc.culture.china,soc.culture.taiwan
Subject: NEWS: Shanghai's Revival
Date: 11 Nov 92 06:05:30 GMT
Organization: Computer Centre, Monash University, Australia

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Market Reforms Revive Shanghai
Source: Financial Review, Australia, Nov 11, 1992
AP
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Crumbling mansions line the streets, a reminder of grander days before communist
rule brought decades of neglect to Shanghai.

Now, the good times may be returning. The city is alive with dreams of remaking
itself in its old image: the Asian centre of finance, trade, culture and fashion
that faded with revolution in 1949.

China's market'oriented reforms are back on track and Shanghai is at the heart
of economic liberalisation. Residents say the rebirth comes none too soon.

"We need to develop, otherwise we will die," said Mr Xie Wanrong, manager of
Puma sportswear shop in the coastal city of 13 million. "Other countries already
have become prosperous, and we also want to be rich."

During the 1989s, the central government repeatedly pledged to revive Shanghai,
but did little.

Guangdong and Hainan provinces in the south ignored central government efforts
to manage growth and forged agead, borrowing money from abroad, freeing prices
and introducing new market measures. Shanghai, more cautious, paid for its
timidity with a stagnant economy.

The southern provinces also were allowed to keep most of their profits, but
Shanghai, dominated by State industry, had to send its earnings to the central
government, leaving little to invest at home.

Last northern spring, things began to change. When the national leaders decided
to speed development by adopting bolder market reforms, they chose Shanghai,
the birthplace of the Connumist Party, as the focal point.

They announced plans for international ports along the Yangtze River, a
potential boost to traffic at Shanghai, where the river meets the sea.
Inland provinces began opening trade offices in Shanghai, looking on to it as
their gateway to the world.

Beijing also aproved preferential policies to help Shanghai lure foreign
investment, including low tax rates for investors, a free-trade zone and a
faster approval process.

Previously, Shanghai's Foreign Investment Commission had to approve all projects
financed with foreign money. Now, local districts and county governments can
approve those worth $US5 million or less.

Shanghai is restoring some pleasures from past. Horse racing, popular before the
communits banned it, has returned and there talk of building a racetrack.

However, authorities insist there will be no gambling, and Shanghai is still far
from the free-spirited lifestyle - including opium and prostitution - that
attracted adventureres and entrepreneurs before 1949.

Western diplomats and foreign businessmen say the new spirit has increased
interest and investment in Shanghai.

Five-star hotels in flashy complexes overshadow prewar hostelries that have lost
their grandeur. Official media have reported plans to build an 88-storey
skyscrapper and a trade centre costing the equivalent of $A100 million.

The Shanghai Securities Exhange, one of only two in China, opened in late 1990. 
Stockmarket fever has swept the city, although the offerings are limited and
there is little protection for investors.

A metals exchange also is operating and Shanghai has experimented with trading
in currencies futures.

Foreign investment is booming, with most of the money coming from Taiwan, 
Hongkong, Japan and the United States. In the first half of 1992, city officials
approved 502 foreign-financed projects totalling $A1.3 billion, nearly triple
the level of the corresponding period last year.
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