Shanghai is the commercial and financial center of China, and ranks 5th in the 2018 edition of the Global Financial Centres Index (and third most competitive in Asia after Singapore and Hong Kong) published by the Z/Yen Group and Qatar Financial Centre Authority.
It also ranks the most expensive city to live in Mainland China, according to the study of Economist Intelligence Unit in 2017. It was the largest and most prosperous city in East Asia during the 1930s, and rapid re-development began in the 1990s. This is exemplified by the Pudong District, a former swampland reclaimed to serve as a pilot area for integrated economic reforms. By the end of 2009, there were 787 financial institutions, of which 170 were foreign-invested.
In 2009, the Shanghai Stock Exchange ranked third among worldwide stock exchanges in terms of trading volume and sixth in terms of the total capitalization of listed companies, and the trading volume of six key commodities including rubber, copper and zinc on the Shanghai Futures Exchange all ranked first in the world.
In September 2013, with the backing of Chinese Premier Li Keqiang the city launched the China (Shanghai) Pilot Free-Trade Zone-the first free-trade zone in mainland China. The Zone introduced a number of pilot reforms designed to create a preferential environment for foreign investment. In April 2014, The Banker reported that Shanghai “has attracted the highest volumes of financial sector foreign direct investment in the Asia-Pacific region in the 12 months to the end of January 2014”. In August 2014, Shanghai was named FDi magazine’s Chinese Province of the Future 2014/15 due to “particularly impressive performances in the Business Friendliness and Connectivity categories, as well as placing second in the Economic Potential and Human Capital and Lifestyle categories”.
In the last two decades Shanghai has been one of the fastest developing cities in the world. Since 1992 Shanghai has recorded double-digit growth almost every year except during the global recession of 2008 and 2009. In 2011, Shanghai’s total GDP grew to 1.92 trillion yuan (US$297 billion) with GDP per capita of 82,560 yuan (US $12,784). The three largest service industries are financial services, retail, and real estate. The manufacturing and agricultural sectors accounted for 39.9 percent and 0.7 percent of the total output respectively. Average annual disposable income of Shanghai residents, based on the first three quarters of 2009, was 21,871 RMB.
Located at the heart of the Yangtze River Delta, Shanghai has the world’s busiest container port, which handled 29.05 million TEUs in 2010. Shanghai aims to be an international shipping center in the near future.
Shanghai is one of the main industrial centers of China, playing a key role in China’s heavy industries. A large number of industrial zones, including Shanghai Hongqiao Economic and Technological Development Zone, Jinqiao Export Economic Processing Zone, Minhang Economic and Technological Development Zone, and Shanghai Caohejing High-Tech Development Zone, are backbones of Shanghai’s secondary industry. Heavy industries accounted for 78% of the gross industrial output in 2009. China’s largest steelmaker Baosteel Group, China’s largest shipbuilding base – Hudong-Zhonghua Shipbuilding Group, and the Jiangnan Shipyard, one of China’s oldest shipbuilders are all located in Shanghai.
Auto manufacture is another important industry. The Shanghai-based SAIC Motor is one of the three largest automotive corporations in China, and has strategic partnerships with Volkswagen and General Motors.
The conference and meeting sector is also growing. In 2012, the city hosted 780 international gatherings, up from 754 in 2011. The high supply of hotel rooms has kept room rates lower than expected, with the average room rate for four- and five-star hotels in 2012 at just RMB950 (US$153).
Tourism in general has become a major industry. In 2016, 296 million domestic tourists and 8.54 million overseas tourists visited Shanghai for an approximate increase of 7% from the previous year.
As of September 2013, Shanghai is also home to the largest free-trade zone in mainland China, the China (Shanghai) Pilot Free-Trade Zone. The zone covers an area of 29 km2 (11 sq mi) and integrates four existing bonded zones — Waigaoqiao Free Trade Zone, Waigaoqiao Free Trade Logistics Park, Yangshan Free Trade Port Area and Pudong Airport Comprehensive Free Trade Zone. Several preferential policies have been implemented to attract foreign investment in various industries to the FTZ. Because the Zone is not technically considered PRC territory for tax purposes, commodities entering the zone are not subject to duty and customs clearance as would otherwise be the case.