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| Shanghai
Business Profile |
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Shanghai
Economy
Since its emergence as a major city, Shanghai’s business
has thrived, This has never been more true than now, when
the city is the economic powerhouse of China’s
modernisation and vying to replace Hong Kong as Greater China’s
financial and maritime trade hub. Given this push to make money,
it is surprising that Shanghai is careful to maintain its somewhat
attractive environment. But, the growth of tourism
(about 6%) and a developing leisure economy explains
such foresight in maintaining the character of the neighbourhoods.
Shanghai probably has some quiet jealousy of Beijing, since the
International Olympic Committee designated it the
2008 Olympic Games, but there
is no indication that this will hold Shanghai back in profiting
from spin-off opportunities as the full benefits of WTO
membership kick in.
Shanghai
is the main focus for foreign investment
in China, having gained over 40 billion US Dollars to date –
the most investment in any city in the world. International
vehicle manufacturing companies with local joint ventures
include Volkswagen, Ford,
General Motors, Volvo and Buick,
whose products fill the streets. The local competitor,
Shanghai General Motors, has dispatched new models
to compete with these foreign favourites.
Additional investors in the Pudong development area include Coca-Cola
and Kodak. Financial services are an important
sector of the economy, with the combined capitalisation of Shanghai
and Shenzhen’s bourses (exchanges) already greater than that
of Hong Kong. In the years ahead, more and more big mainland firms
will seek to list on these exchanges rather than in Hong Kong. The
strength and size of these exchanges can only grow – local
supremos are now planning to take Shanghai up to Asia’s number
one bourse, as it was prior to World War II. The city’s unemployment
rate is also a positive sign – holding at
3.5%, it is lower than the national average
of 4.5%.
The Pudong New Area is being developed in line
with a strategy first announced in 1990: ‘With the emergence
of Pudong as the head of the dragon, build Shanghai into one of
the international economic, financial and trade centres.’
The intention was to bring this development from a backwater area
– formerly under-utilised wasteland and slums – up to
par with the tempo of change on the western bank of the Huangpu
River. And it has succeeded tremendously.
Free trade zones and high-tech parks opened in Pudong,
and infrastructure enhancements in the New Area were matched with
the launching of new bridge and tunnel links across the river. Pudong
New Area is in actually 1.5 times larger than urban Shanghai itself.
The area’s output has climbed by more than five times in the
ten years since 1990 and its Orient Pearl Tower
is the new symbol of the city.
Business
Etiquette
Conducting business in Shanghai, at least on the formal level, requires
lots of patience and persistence. Good manners and a cheerful disposition
help save face for business clients. Public anger should be avoided.
Nevertheless, protracted negotiations can usually be finished up
neatly during a business banquet or a late night karaoke session
– these are the backdrops where China’s legendary guanxi
(connections) are exercised. Public business is quite formal, with
executives in suits exchanging business cards, bows and handshakes.
Women should not wear high heels or short sleeved blouses –
skimpy clothing is considered offensive. Both men and women should
dress in neutral colours. Avoid using large hand gestures, touching
others and pointing. Gifts will help open initial contacts, although
it's best that these never become open to misinterpretation as bribes.
In many companies, particularly larger and older ones, a Party appointee,
who has an honorary or nominal senior position in the company, will
preside over the first sessions, then leave the real business in
the hands of the operational management.
Business
hours are normally 08:00-17:00 weekdays, with one or two
hours for lunch.
Seniors are usually given respect, at least to their faces –
in spite of the Cultural Revolution’s attack on the ‘Four
Olds’, Confucian respect for seniority dies hard. Likewise,
political changes might have emancipated women in China before the
law but in business circles men still rule. Businesswomen should
dress and behave soberly, while businessmen in Shanghai should be
available for evenings in hostess bars with clients and associates.
Foreigners are normally afforded cautious respect, however they
should not always expect a Japanese-style enthusiasm for foreign
languages and culture – mainland Chinese have a robust pride
in their own traditional and language.
Public manners while dining can seem very lax to foreigners –
Shanghainese spit, pick their teeth, belch, (and so on) quite openly.
However, it's recommended that visitors tolerate but not emulate
this. Late night drinking bouts to seal negotiations and cement
relations are the norm. Shanghainese are heavier drinkers than many
overseas Chinese, however will react negatively to heavy consumption
by foreigners. |
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