SOME SPECIFIC THOUGHTS REGARDING THE DEVELOPMENT OF PUDONG1
JULY 23, 1988
The report on Pudong’s development to be submitted to the State Council will be revised on the basis of Jiang Zemin’s comments and ideas, which I agree with completely. Following are some specific thoughts on this subject.
1. Pudong Development Integral to Building a “New Shanghai”
Pudong’s development is indeed a very important venture but it will require huge investments, and construction will take quite a long time. It cannot be completed in one go and must be based on long-term planning.
In developing Pudong, the first step is to focus on its transportation and infrastructure. At present, this consists mainly of cross-river projects. The East Yan’an Road Tunnel should be opened to traffic as soon as possible this year, and it should be completely finished by the first half of next year. We must start work on the Huangpu River Bridge2 this year, and the ceremony marking the start of construction should be held with great fanfare. Work on the Ningguo Road project3 must start next year. The Waigaoqiao port project should be completed ahead of schedule and can be carried out using foreign investment. Only after these projects are completed will sales of Pudong land-usage rights [previously known as “land leases”] be attractive. That’s why these endeavors are critical for the proper handling of Pudong’s development. At the same time, we must focus on doing feasibility studies for developing Pudong and draw up planning options.
Visiting the Nanpu Bridge nearing completion, during an inspection tour on resolving problems at large and medium state-owned enterprises, mid-October, 1991. From the left, Wan Xueyuan, secretary-general and director of the General Office of the municipal government; Wu Xiangming, director of the Municipal Construction Committee; and Vice Mayor Ni Tianzeng. On Zhu’s left, Huang Ju, mayor and deputy secretary of the Municipal Party Committee. (Photograph by Zhang Liuren, Xinhua News Agency)
2. Pudong: An Inseparable Part of the City of Shanghai
Pudong’s development is integral to the remaking and development of the entire city of Shanghai, so we must think in terms of overall development as we work on Pudong. “Overall development” does not mean turning Pudong into an entity of its own, in contrast to Puxi. Rather, it means building Pudong into the most modernized part of Shanghai. By developing Pudong, we will make the whole of Shanghai the largest economic, trade, finance, and scientific and technical center in the country.
Pudong has excellent geographic conditions: a very long coastline and an ideal location for building an industrial base for large-scale importing and exporting. Pudong should concentrate on developing industries, ports, and transportation. It should focus on modernized industries that are knowledge-intensive, technology-intensive and labor-efficient, that do not consume a lot of raw materials and energy, and that have a strong capacity for earning forex. Another important consideration is how to disperse industries from the old urban areas. As Jiang Zemin has pointed out, depending on the different types and situations of industries in the old areas, we should plan to move some of them to Pudong and others to satellite towns and rural areas, so that the old urban areas can “regain their youth.”
Of course tertiary industries such as finance, trade, and information must also be developed, but we mustn’t build too many facilities for consumption. The focus should be on developing industries, ports, roads, and public utilities—without these entities, there wouldn’t be a foundation for the development of tertiary industries. Sectors like finance and information might be considered for the Lujiazui District, where they could form a finance and information center in conjunction with the Bund in the old urban area. The bank buildings along the Bund should be gradually turned over for use by foreign banks—this will also be very helpful for Shanghai’s development.
3. Rely Mainly on Foreign Investment to Develop Pudong
We must use foreign investment to build infrastructure and to establish enterprises. We should be even bolder in the use of foreign investment: Shanghai definitely has the ability to repay. At the same time, we must do sound work on selling land-usage rights in a planned and active way. We should first focus on pilot programs. To say “the development of Pudong will rely mainly on land leases” is inaccurate and will confuse matters. It is best to begin with sound preparations for selling land-usage rights and for a pilot program for an international auction, so that we can summarize experiences gained through practice.
Attending the opening ceremony of the Pudong Development Office of the Shanghai municipal government, May 3, 1990. The speaker is Xia Keqiang, deputy secretary-general of the Shanghai municipal government. Front row: third from left, Vice Mayor Ni Tianzeng; fifth from left, Huang Ju, vice mayor and deputy secretary of the Municipal Party Committee; sixth, Sha Lin, deputy chair of the Municipal Science and Technology Commission.
Land development can proceed under different formats. Where conditions permit, one option is to consider selling land-usage rights or joint development with foreign businessmen; alternatively, some land development can be bundled with infrastructure construction by Chinese partners from outside Shanghai. We can first conduct some pilot programs, but all building construction and land development must meet the requirements of the master plan and be carried out under the guidance of a unified plan.
4. Related Policy Issues
Anything that can be decided by the city will be determined by the city and need not be reported to the State Council. In some cases, such as bonded warehouses, policies are already in place and need not be brought up again. We will then work hard to formulate other policies that require State Council approval, such as lowering or waiving customs duties, defining import-export rights, and authorizing the duration of joint ventures—we hope to enjoy the same policies as Guangdong. On condition that we guarantee to turn over the amount stipulated in our fiscal contract and still have surplus revenues, we can consider asking the central government whether we can withhold the amount of gain attributable to Pudong from their share of the surplus and keep it in a Pudong development fund.
5. Organizational Leadership for Developing Pudong
I agree with Jiang Zemin that government and enterprises should be kept separate. Therefore we should make full use of the three districts and one county4 and not create an independent administrative agency just now. It isn’t easy to establish an administrative jurisdiction. People will argue over allocation of personnel, funds, and materials for up to a year, and there’ll also be conflicts in the future that will affect actual work. In accordance with the master plan, we will allow the three districts and one county to each show what they are capable of and to compete with each other. Then they’ll be highly motivated and won’t try to extort anything from the city. Of course we’ll still need to have a leading agency to take charge of unified planning and coordination.5 This might be called the “Pudong Development Commission” or the “Leading Group for Pudong Development.” It would be under the city’s Foreign Investment Commission, and Wu Xiangming6 can be in charge of this. For now, we can consider creating a preparatory agency and having designated people working on this full time.
To reiterate, the development agency should keep government and enterprises separate. It should develop by using [businesslike] operations. The city or the districts and county can organize some development companies or consulting firms, and they can also use a joint venture format.
1. This is the main part of Zhu Rongji’s response to a report by Vice Mayor Ni Tianzeng on several comments by Jiang Zemin on the development of Pudong.
2. The Huangpu River Bridge refers to the present Nanpu Bridge. This was the first bridge in Shanghai to span the Huangpu River. It is 8,689 meters long, with a twin-tower, dual-cable diagonal cable-stayed structure. The main section of the bridge is 46 meters high. Total investment in this project was RMB 820 million; construction began in December 1988 and it was opened to traffic in December 1991.
3. The Ningguo Road cross-river project refers to the present Yangpu Bridge. It and the Nanpu Bridge are known as “sister bridges.” It is 7,658 meters long and its main arch spans 602 meters. The main section of the bridge is a river-spanning, twin-tower, dual-cable, diagonal cable-stayed structure. Total investment in this project was RMB 1.33 billion; construction began in May 1991, and it was opened to traffic in October 1993.
4. The three districts and one county at that time were Yangpu, Huangpu, and Nanshi districts and Chuansha County.
5. The unified planning and coordinating leadership agency refers to the Pudong Development Leading Group, which was formed on April 30, 1990. The Pudong Development Office of Shanghai’s municipal government was set up under this leading group as its operational agency, responsible for master planning, planning, and coordination in the Pudong New Area.
6. Wu Xiangming was then a vice chairperson of the Shanghai Planning Commission and concurrently a vice chairperson of the Foreign Investment Commission.