Shanghai development zone firms diversify to keep competitive edge
THREE companies appointed to oversee the growth of Shanghai development zones have diversified from real estate into other business to remain competitive.
They have started investing in businesses related to the functions of the zones they were charged with developing.
A fourth company appointed by the municipal government to oversee development is still concentrating on real estate.
The diversifying companies are Shanghai Jinqiao Export Processing Zone Development, Shanghai Waigaoqiao Free Trade Zone Development and Shanghai Lujiazui Finance and Trade Zone Development.
Shanghai Jinqiao, which has developed and leased out most of its 15 square kilometres of industrial land, wants to develop into a hi-tech area.
Deputy general manager Zhang Ji said it was a natural development.
Shanghai Waigaoqiao began as developer and manager of a four sq km free-trade zone. It now plans to expand its import, export and storage businesses.
Waigaoqiao director Li Shuming said: 'After putting the infrastructure in place for the zone, these three areas are crucial for our development.' He said that although Hong Kong was dominating re-export trade, the zone would see an increase in this area in the coming years.
'We want to build our contacts with more companies, co-operate with them and further process their products before shipping them off to the outside world via Waigaoqiao.' Mr Li said that the firm would also expand its export processing business.
In the first quarter of this year, its import and export trade rose 40 per cent.
Export processing accounted for an eighth of the trade, representing earnings of US$250 million.
'Reaching the target of $1 billion in the next few years for export processing is not much of a problem,' Mr Li said.
The existing 60,000 sq metre of warehouse storage space and 40,000 sq metres container yard also had to be increased.
Shanghai Lujiazui, which was established in 1990, said the first two years were spent on redeveloping the zone from farmland.
The company now has more than 30 subsidiaries, not only in property-related businesses, but also financial concerns such as investment in financial institutes.
Deputy general manager Zhang Zhe said: 'Our aim is to realise the zone's potential as an international finance and trade centre.' The fourth development company, Shanghai Zhangjiang High-Tech Park Development, which did not begin development work until 1992, continues to concentrate on real-estate development.
Vice-president Liu Zhengyi said: 'With a vast area of 17 sq km, we are still developing the start-up area of 2.5 sq km.'