Knowledge 'key' to Shanghai's future

Shanghai will accelerate efforts to build a global knowledge-intensive center by the end of 2015, a senior official told a news conference on Wednesday.

Liu Jian, deputy director of the Shanghai Municipal Commission of Economy and Informatization, said the city will also seek to double the added value of its strategic emerging industries and the operating revenue of producer services by 2015, compared with 2010 levels.

Liu gave the targets during a briefing on the 12th Five-Year Plan (2011-15) of Shanghai Industrial Development, which calls for a manufacturing transformation and enhanced global competitiveness.

Shanghai will give priority to improving its economic performance, investing in a way that optimizes its industrial structure, strengthening innovation and making industry more environmentally friendly.

In a break with previous five-year plans, the current plan shifts some emphasis from increasing industrial output to such areas as structural improvement, innovation and the environment.

By the end of the plan period, investment in technology transformation is intended to account for 55 percent of all industrial fixed-asset investment.

Hua Min, director of the Institute of World Economy at Fudan University, agreed with the goal of better strategic positioning, but he also stressed the importance of maintaining the scale of traditional manufacturing.

"It's correct to support emerging industries as they contribute more to the sustained development of a city. But we cannot neglect the significance of the traditional manufacturing industry, which offers a lot of jobs and plays a key role in keeping society stable," Hua said.

According to Hua, the development of emerging industries can lift GDP readings, but that might not create enough jobs.

"To move more people into the downstream industry chain to share the fruits of our economic development, we should develop low- and middle-end manufacturing," Hua said. "Usually, the government plan doesn't repeat points it mentioned before, but if traditional industries are ignored, big problems will arise."

Zhang Jun, director of the China Center for Economic Studies at Fudan University, said the development plan shows the city government's foresight in shifting from its reliance on financial and trade services to producer services, while trying to avoid the industrial "hollowing-out" that took place in many developed Western countries.

"Shanghai set goals to build a financial center, a trade and a shipping center a few years ago," said Zhang. "Now, it also wants to build an advanced manufacturing center. Considering Shanghai's high business costs, it's wise to develop R&D-intensive industries."

Zhang said the five-year plan is very realistic, and it doesn't signal a dramatic change but represents the process of shifting "from quantitative change to qualitative change".