Shanghai faces substantial infrastructure challenges in communications, transportation, water, sewerage, and industrial infrastructure. The old part of the city Puxi, as opposed to the newly opened Pudong, is hindered by fragmented land usage in which virtually every district of the city has industrial, commercial, residential and even agricultural areas. Activities that logically should be co-located are scattered, resulting in duplication and inefficient transport. This was one of the major reasons why development is now being focused on Pudong, which had always been a relatively empty area of marshes and agricultural holdings. The eventual redevelopment of Puxi will probably entail greater challenges than the building of Pudong.
Shanghai has a largely industrial economy.
In 1994, manufacturing accounted for nearly 50 percent of output, down from nearly 75 percent in 1980. The tertiary, or service sector accounted for nearly 40 percent, up from 21 per cent in 1980. Other prominent industries include machinery, shipbuilding, instruments and polymers. Light manufacturing is represented by watches, cameras, radios, fountain pens, glassware, textiles and apparel. Shanghai has been the epitome of the Mainland's state-planned economy.