Graphic China: Shanghai Moves Up the Value Chain
February 7th, 2008 | by This is China! |
I took some numbers from the Shanghai Municipal Statistics Bureau representing the contribution of industry categories to the Shanghai economy and put them in a spreadsheet. The graph to the left is the result.
Primary industries involve the processing of natural resources such as iron, coal and wood. Light industry and labor-intensive production – which kick-started the Chinese economy into the 20th-century – represent secondary industries such as textiles, chemicals, shoes, toys et al; tertiary industries are capital intensive industries that tend to be large-scale: shipbuilding, semi-conductor fabrication, avionics. Tertiary industries include services sectors such as financial, IT and professional services.
Tertiary industries develop in areas in which the population becomes more affluent and better educated. In other words, residents develop a “not-in-my-back yard” attitude to the noise, pollution and commotion attached to labor-intensive industries. So, secondary industries move inland, in the case of Shanghai.
Primary industries never were a great contributor to Shanghai’s economy. The liberalization of industry in the early 1980s was a clear driver of the city’s development. Fast-forward to the early 2000’s to see it was clear Shanghai was moving to high-value production and releasing its economic dependence on light industry. Light industry at that time began moving westward to second-tier cities like Suzhou, Nanjing and Hangzhou and to third-tier cities in between. Now, nearly 70% of Shanghai’s GDP comes from heavy manufacturing, such as automobile production, steel making and high-tech industries like telecommunications equipment manufacture, software development and integrated circuit (IC) manufacture; and from services bound up in the financial, retail, media and tourism sectors.
Bill Dodson
SUZHOU, China
