SPEECH AT THE ESTABLISHMENT OF THE SHANGHAI OVERSEAS EXCHANGE ASSOCIATION
MAY 11, 1990
First of all, I wish to extend a warm welcome to all you overseas Chinese and to our kinsmen who are back in China and visiting Shanghai.
I’m sure you’re all as pleased as I am—many good things have recently happened in Shanghai. The development of Pudong and the policies for it were basically decided on in mid-March, and this is something that the people of Shanghai have longed for for many years. In a recent meeting with a foreign entrepreneur, [Vice Premier] Yao Yilin said that the development of Pudong signifies that part of the focus of China’s reforms and economic growth has now shifted to the Yangtze Basin. That is to say, the opening up of Shanghai will foster economic growth in the Yangtze Delta, enabling it and all the provinces in the Yangtze Basin to make a greater contribution to China’s economic development. To Shanghai, this is very heartening.
Right now, everyone in the city is very pleased, and many have written letters and donated money. An older man in poor health mailed in RMB 5,000 to make his own contribution to developing Pudong. One worker mailed us RMB 3,000, saying he agreed that the state, the collective, and the individual should all pitch in to solve Shanghai’s problems with housing and gas.
The decision of the central authorities has won the support of all levels of people in Shanghai, and what’s more, their enthusiasm is extremely high. Now that the decision has been made, our work will have to keep up. First, we must improve the investment environment. This involves both the hard and soft environments. Although we have 10 years of experience in reform and opening up, our soft environment is still imperfect. Foreign businessmen have many criticisms, and we are still studying how to further improve.
First of all, the mentality of people in Shanghai has to change. Foreigners say we are “too smart, (but) not wise.” When you’re too smart, you tend to count pennies about everything. But you do have to count a few pennies—after all, economic performance always matters—but it isn’t good to overdo it. We should recognize that provided something benefits us, we should do it regardless of how much the other party benefits. If they make more money, it’s because they are more capable, so don’t be jealous. This mentality of excessively counting pennies has got to change; otherwise foreigners will still think that Guangdong, Fujian, Dalian, and Qingdao are good places to invest in whereas Shanghai is not. The mentality must change first—it must be a bit more liberated, and we must be a bit bolder.
Dear kinsmen, I’m not bragging, but Shanghai has two strengths that other places cannot match. For one thing, no other place in China has such a complete array of industries. Shanghai has no mining but it has every other industry, and their standards are generally quite high. This is favorable for your investments, and in the future, it will also be favorable for lowering your investment costs. For another thing, the sci-tech caliber of Shanghai’s people cannot be found anywhere else in China. I worked at the State Planning Commission and the State Economic Commission for over 30 years, and am deeply aware of how high the level of Shanghai cadres is.
Shanghai’s current weakness is that its people are unable to work more efficiently. Some of them think they’re very clever—there’s a lot of buck-passing and a lot of mutual foot-dragging, which delays everything. We have to make tighter rules for how we work: we can’t have mutual foot-dragging, mutual recriminations, and mutual delays. As Shanghai opens up and as we review our experiences of a decade of reform and opening up, our work will surely improve. Please be confident—we really are making progress.
Problems in the hard environment cannot be solved immediately. Transportation infrastructure must be solved; otherwise you wouldn’t come here. I’m asking the city’s Office of Overseas Chinese Affairs to organize a visit to the Huangpu River Bridge1 for you—it’s a majestic project. The two main towers are 150 meters tall, the foundation piers are sunk 50 meters deep, the bridge floor sits 46 meters above the water, and it has six lanes for traffic. This bridge is being built with a loan from the Asian Development Bank. Work on it started the year before last, and it will be open to traffic next year. Colleagues from Beijing asked if it would take 5 years or 10 to build, and when I said it would be open to traffic next year, they couldn’t believe it. I was touched by this—Shanghai’s people can still do things solidly; they are capable. The design of this bridge is advanced by world standards—its main span is 423 meters long, one of the longest in the world. It wasn’t easy to open it to traffic in under three years using an investment of over RMB 800 million.
When this bridge is completed, we’re going to build a second one, because only then can we create a ring road. This road will encircle all of Shanghai, including the old urban area. We expect it will take two to three years to build the overpasses and elevated highway. Port construction will take a little longer. In the future, all the ports along the Huangpu River may be moved to Waigaoqiao because there we can build 45 berths that can handle 10,000-ton loads, whereas we now only have 45 such berths in all of Shanghai. After some of the wharfs are moved away from the Huangpu River, it can become a very beautiful urban river that adds to Shanghai’s scenic appeal.
Of course it takes a long time to build 45 berths of this nature, but within two to three years, the basic scale and framework of Pudong will have taken shape. I estimate that it will take two to three years of preparation time for Shanghai to truly attract large amounts of foreign investment to build infrastructure and to make the soft environment reasonably complete. I’m being honest with you: don’t wonder why there’s so much publicity about developing Pudong, yet nothing to see when you go there. This is the period when we clear away the brush and blaze a trail, but the prospects are magnificent. Mr. T. Y. Lin2 told me that you won’t find another city like Shanghai anywhere else in the world, one with 900 square kilometers of undeveloped land next to the city center. Once the two bridges are open to traffic and the ring road is completed, it will be very convenient to travel from Pudong to the Bund—the city center. Timing, location, and people—Shanghai has all three.
What should you do if you can’t wait for the two to three years of preparation? Shanghai already has three development zones:
—Minhang, with over 2 square kilometers, already has over 60 Sino-foreign joint ventures, of which more than 40 are already producing, but land is still available, and we are preparing to enlarge it.
—Caohejing, a hi-tech development zone, hasn’t filled up with projects yet.
—Hongqiao, with relatively more tertiary industries, already has constructed some buildings, which can be seen en route from the airport, but this area hasn’t completely filled up yet either, and there is still room for many more buildings.
These three development zones can enjoy the same treatment as Pudong.
The central government has announced that Pudong will not only enjoy the preferential treatment given to economic and technical development zones, but it will also enjoy certain policies reserved for special economic zones. We don’t necessarily want all the policies that have been extended to Shenzhen and Zhuhai—some of them aren’t suited to Shanghai’s conditions. But Pudong will still basically enjoy the preferential policies for special economic zones. When Yao Yilin came to Shanghai, he authorized us to act as coordinators for the three development zones in Shanghai; we can refer to the preferential policies for Pudong and allow them to enjoy special economic zone policies. Those of you who are interested in investing in Shanghai can first go to these three development zones, because their infrastructure is already complete and conditions there are already very good. You won’t be disappointed—there’ll be room for investments.
Accompanying Yao Yilin, vice premier and member of the Politburo Standing Committee, on an inspection visit to the Pudong construction site of the Nanpu Bridge, March 30, 1990. In the foreground, from left, Zhu Zhihao, general director of Nanpu Bridge construction; Yao Yilin; and Vice Minister of Finance Xiang Huaicheng. (Photograph by Zhang Liuren, Xinhua News Agency)
If you wish to lease land in Pudong, you can do so now. When I say “lease,” I mean land-usage rights can be transferred [to you] for 50 to 70 years, and you can build infrastructure and factory buildings on that land. Right now you can designate a parcel of land, and you can have any parcel you wish as long as the terms are appropriate and both sides are satisfied with them. This way things will move quickly and we can develop jointly. If you wait until we finish the infrastructure, it will take over 3 years—if you work on it now, you’ll make faster progress than us. We still need to be responsible for the major infrastructure—for example, roads and telecommunications.
We can install telecommunications and telephones very quickly because we have the Shanghai Bell Telephone Equipment Manufacturing Company Ltd.—the Belgian government was very helpful with its technology transfer. Its designed capacity is for 300,000 digitally programmed lines annually; in one year, it has already received orders for 400,000 lines, and it can very quickly increase its capacity to 500,000, 600,000, or 800,000 lines. The technology for integrated circuits has also been transferred to Shanghai. We established the Shanghai Beiling Microelectronics Manufacturing Company Ltd. in particular to make the specialized 2.5-micron, very large integrated circuits used in communications. We’ve invested a great deal of money to develop integrated circuits; after another year or so, we will have completely mastered the technologies, so by then the technologies of digitally programmable telephones will be entirely indigenized.
At the same time, in light of other current needs, we are concentrating our forces on solving three of the problems the people of Shanghai most urgently hope to see addressed.
The first is the issue of the “vegetable basket.” Although it has been resolved reasonably well and people are quite satisfied, we still need to do better. We want to build the “vegetable basket” on a foundation of modernized technology, lowering costs by using the modernization of every step from production to transportation and marketing.
The second issue is transportation—we’re building a ring road and large bridges. It will take three to five years before we can fundamentally turn Shanghai’s transportation problems around.
The third is housing, which includes gas. This is a very tough problem in Shanghai. We recently proposed a slogan for this problem, which touches on the immediate interests of Shanghai’s people: the state, the collective, and the individual should all pitch in to solve it. City residents have already responded to this slogan. We plan to issue some bonds for housing and gas in order to speed up their construction. This way, the gas problem can be solved in 3 years and the housing problem in 10. We plan to present this plan3 in the near future so everyone in the city can discuss it and create a groundswell. We will engage in the large-scale construction of public facilities, particularly of housing and gas, to draw money out of the people’s pockets to drive market demand. Then building materials, petrochemicals, and iron and steel will all be able to develop—this is an important measure for promoting production.
Our Municipal Party Committee and government have proposed four watchwords: be incorruptible, efficient, fact-based, and serve the people. Our government is a clean one, we work very efficiently, we base it on facts, and the starting point of everything we do is to serve the people.
Under the leadership of the Party Central Committee and the State Council, with the support of the city’s entire population, and with the help of overseas Chinese at home and abroad and our international friends, Shanghai can definitely be revitalized. I warmly welcome all of you to Shanghai and hope you will offer many valued thoughts about our work. I also hope the time you spend in Shanghai will be as happy as the time you spend at home.
1. The Huangpu River Bridge refers to the present Nanpu Bridge. This was the first bridge in Shanghai to span the Huangpu River. It has a total length of 8,689 meters and is 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.
2. T. Y. Lin (Tung-yen Lin) was a Chinese-American engineering expert and a professor at the University of California-Berkeley. At the time he was chairperson of T. Y. Lin International.
3. This plan refers to the “(Draft) Implementation Plan for Reform of the Shanghai Housing System.”