Pudong New Area: Institutional changes are the real miracle

2018-09-13 21:00 463

BEIJING, Sept. 13, 2018 /PRNewswire/ -- A news report by on China (Shanghai) Pilot Free Trade Zone:

If we look at China's coastal line as a bow, the Yangtze River is an arrow, and the city of Shanghai is the arrowhead. An even closer examination reveals the Pudong New Area at the very edge of the city. The former farmland and reed marshes have been miraculously transformed under China's reform and opening up process.

In 1990, when the Chinese government decided to establish a new area in Pudong, the regional annual GDP was only six billion yuan. Last year, the figure had increased by 160 times to nearly 965.14 billion yuan. Today, Pudong has become an international metropolitan area full of high-rise structures, and the landmark Shanghai Tower, at 632 meters, is recognized as the world's second highest building.

The fast development of Pudong can be attributed to the region's pioneering spirit. Great changes are taking place here on a daily basis. Currently, the most important program underway there is the China (Shanghai) Pilot Free Trade Zone. Opened in 2013, the zone is the first of its kind in China, providing the most convenient business atmosphere for enterprises. Today, a foreign enterprise can complete the whole business registration process in three days, compared to three to six months it might have taken in the past. Thanks to favorable policies, open and transparent systems and complete functions, the pilot free trade zone has become the first choice for foreign enterprises to access the Chinese market. World-famous companies establishing offices here include Microsoft, L'Oréal, PricewaterhouseCoopers , General Electric and Tesla.

Economist Steven Ng-Sheong Cheungs says: "China's economic growth is not a miracle, institutional changes are the real miracle." Institutional changes have brought an obvious fascination and vitality. In less than 30 years, Pudong has seen tremendous changes.

Most of the special economic areas established in China at the beginning of reform and opening up relied mainly on special preferential policies to attract investments. However, over-relying on such policies may hinder the flow of essential production factors in the long run. And the model cannot be copied or applied elsewhere. The Pudong New Area has instead focused mainly on more essential institutional changes, making brave and pragmatic explorations in opening finance, absorbing foreign funds, developing land resources and improving the business environment.

Allowing the pilot areas and zones, the "fulcrums", to play a leading role in bringing about overall development is the important experience gained by China in the past 40 years of reform and opening up. The Pudong New Area, and especially the pilot free trade zone, are just such "fulcrums" as well as typical examples leading China's high-quality economic development. The word "pilot" has meanings of both "an experimental field" and "navigator", and both can be applied in Pudong. Currently, a number of institutional reforms, first launched in the pilot free trade zone, have been copied and promoted throughout the country. As a pioneer of China's reform, Pudong is pressing forward without pause.

China Mosaic

Pudong New Area: Institutional changes are the real miracle


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