5 Dec 2012
Shanghai: Market Profile
Major Economic Indicators
| Economic Indicators | 2011 | Jan - Sep 2012 | ||
| Value | Growth (%, y-o-y) |
Value | Growth (%, y-o-y) |
|
| Gross Domestic Product (RMB bn) | 1,919.6 | 8.2 1 | 1,437.4 | 7.4 1 |
| Per Capita GDP (RMB) | 82,560 | 5.0 1 | ||
| Added Value Output | ||||
| - Primary industry (RMB bn) | 12.5 | -0.7 1 | 6.9 | -0.9 1 |
| - Secondary industry (RMB bn) | 792.8 | 6.3 1 | 582.7 | 2.6 1 |
| - Tertiary industry (RMB bn) | 1,114.3 | 9.6 1 | 847.9 | 10.9 1 |
| Value-added Industrial Output 2 (RMB bn) | 679.8 | 7.4 | -2.1 1,3 | |
| Fixed-assets Investment (RMB bn) | 506.7 | -4.7 | 338.0 | 5.2 |
| Retail Sales (RMB bn) | 681.5 | 12.3 | 542.5 | 9.1 |
| Inflation (Consumer Price Index, %) | 5.2 | 3.1 | ||
| Exports (US$ bn) | 209.7 | 16.0 | 154.4 | -0.1 |
| - By foreign invested enterprises (FIEs) (US$ bn) | 142.4 | 13.1 | 102.7 | -1.8 |
| Imports (US$ bn) | 150.0 | 20.9 | 173.5 | 2.1 |
| - By foreign invested enterprises (FIEs) (US$ bn) | 123.9 | 38.2 | 113.7 | 1.4 |
| Utilized Foreign Direct Investment (US$ bn) | 12.6 | 13.3 | 12.3 | 22.1 |
Notes: 1 In real terms 2 For all state-owned enterprises and other forms with annual sales over RMB20 million
3 Jan-Aug 2012
Sources: Shanghai Statistical Yearbook 2012, Shanghai Statistical Bureau, China’s Customs Statistics 12.2011 and 9.2012
General Background
Shanghai has a total area of 6,340.5 sq. km, consisting of 18 districts and one county. Total resident population stood at 23.5 million by the end of 2011. Shanghai is one of the 4 autonomous municipalities and historically a commercial and financial center of China.
Located at the heart of the Yangtze River Delta, Shanghai is not only the leading container port in China, but also the busiest container port in the world in 2011 which handled 31.7 million TEUs in 2011, up 9.2% from 2010. The Yangshan International Deep Water Port handled about 40% of the TEUs in 2011.
Industries
In 2011, 58% of Shanghai’s GDP was attributed to services industries. The top 3 largest industries were retail and wholesale, financial services and real estates. Shanghai will focus on the development of financial services, logistics and cultural industries.
Shanghai plays a key role in China’s heavy industries. Heavy industries accounted for 78% of the gross industrial output in 2011. Baosteel Group, China’s largest steelmaker, and Fosun Group, one of China’s largest private steelmakers, are both located in Shanghai. Auto manufacture is another important industry and there are 4 directions for its auto industry: to develop its own car brands, to cooperate with Japan and Korea car companies, to accelerate the development of business use cars and to promote the autoparts and car service industries. Shanghai is also a leading producer of ethylene, plastics, microcomputers, ICs and mobile phones.
Composition of GDP (%)
| 1990 | 2011 | |
| Primary | 4.4 | 0.7 |
| Secondary | 64.7 | 41.3 |
| Industry | 60.1 | 37.6 |
| Tertiary | 30.9 | 58.0 |
Sources: Shanghai Statistical Yearbook 2012
Output Share of Key Industries (2011)
| % share of gross industrial output | |
| Electronic Information Product Manufacturing | 18.8 |
| Transportation equipment | 15.5 |
| General equipment | 8.0 |
| Raw chemical materials and chemical products | 7.8 |
| Electrical machinery equipment | 6.7 |
| Smelting and pressing of ferrous metal | 5.6 |
Sources: Shanghai Statistical Yearbook 2012
Shanghai has been undergoing major industrial restructuring over the last decade. The share of low value-added manufacturing has decreased significantly, particularly the textile and heavy-equipment manufacturing industries as many of them have relocated to outside Shanghai.
Financial Industry
Shanghai is China’s financial center. By the end of 2011, there were 1,048 financial institutions, including banks, insurance companies and securities companies, of which 173 were foreign-invested. The set up of the market operation head office of the People’s Bank of China in Shanghai in 2005 has further strengthened the importance of Shanghai as a financial center.
High-tech & Modern Industry Development
Shanghai has made significant progress in developing its high-tech industries, such as computer, telecommunications equipment, and integrated circuit manufacturing. Technology area with the most output value of the high-tech industries is electronic computers and office equipments. The six key advanced industries (including electronic information product, automobile, petrochemical, fine steel, equipment complex, bio-medicine) accounted for 67% of the gross industrial output in 2011.
Tourism
Shanghai is a major tourist destination. Due to the Shanghai World Expo in 2010, Shanghai recorded marked growth in tourists in 2010. In 2011, the number of domestic tourists continued to grow by 2.9% 231 million but overseas tourists dropped by 4% to 8.2 million.
Foreign Trade
The leading overseas markets in 2011 were the US, Japan, Hong Kong, Germany, Netherlands and South Korea. Japan is the leading source of imports, followed by Germany, the US, Taiwan and South Korea. In 2011, Shanghai exported US$24.9 billion to Hong Kong and imported US$1.8 billion from Hong Kong.
Foreign investment
Shanghai is a major destination for foreign direct investment. About 300 of the world’s top 500 enterprises have invested in Shanghai, such as Delphi, GE, Mitsubishi, Itochu, Siemens and Hitachi etc.
In 2011 Shanghai accounted for about 10.8% of China’s total utilized FDI. The city’s cosmopolitan character, sophisticated and affluent consumers, and highly educated and skilled labor force make it highly attractive to overseas investors.
Of the total utilised FDI in 2011 secondary industry accounted for 16.9% and tertiary industry accounted for 82.8%. In recent years, thanks to liberalizations in the services sector, foreign investment in the services sector has increased more quickly than in the secondary sector. Utilised FDI in the services sector in 2011 was up 18% to US$10.4 billion.
Hong Kong is the largest source of overseas investment in Shanghai. In 2011 Hong Kong investors signed 1,448 contracts with contracted amount of US$8.6 billion, and the utilized FDI invested by Hong Kong reached US$5.6 billion or 44.8% of the total FDI in 2011. Hong Kong’s investments were mainly involved infrastructure, real estates, banking, catering and retail trade. Other major investors in 2011 came from Japan, Singapore, US and Germany.
Consumer Market
Shanghai is the largest consumer market among all mainland cities, supported by the rising income level and large inflow of tourists. Shanghai consumers are also being viewed as trend-setters for fashion and lifestyle products among the whole country.
Shanghai’s retail sector is developing rapidly. Shanghai’s per capita disposable income of urban residents reached RMB36,230 in 2010, increased by 13.8% from 2009. Retail sales of consumer goods grew by 12.3% to RMB681.5 billion in 2011
Composition of Per Capita Expenditure of Urban Household (%)
| 2000 | 2011 | |
| Food | 44.5 | 35.5 |
| Clothing | 6.4 | 8.2 |
| Household articles | 7.7 | 7.3 |
| Medicine & medical services | 5.6 | 4.5 |
| Transportation & communications | 8.6 | 15.2 |
| Recreation, cultural & education | 14.5 | 14.9 |
| Residence | 9.0 | 8.9 |
Sources: Shanghai Statistical Yearbook 2012
Major foreign retail enterprises in Shanghai include hypermarkets like Carrefour, Walmart, Metro and Lotus Supercenter and department stores like Isetan, No.1 Yaohan and Pacific Department Store etc. Supermarkets and convenience stores are mainly local enterprises.
Franchised chain stores from Hong Kong such as U2, G2000, Baleno, Bossini, Giordano, etc. have also entered Shanghai. Famous Hong Kong brands in Shanghai included Esprit, Chow Sang Sang, Chow Tai Fook and Luk Fook.
Shanghai has strong distribution power in China, especially in the Eastern region and Yangtze River Delta. And foreign brands often choose Shanghai as point of entry into the China market. Domestic tourists and travellers used to visit Huaihai Road and Nanjing Road for a glimpse of the latest trends in the Chinese marketplace. The shopping malls on the Nanjing road, Huaihai Road and in the Xujiahui Business Center are filled with people everyday, displaying the most stylish chic in the world.
