Chapter 18 1. The departure of Unilever and 3M

According to the "2006 Shanghai Foreign Investment Environment White Paper" issued by the Shanghai Municipal Foreign Economic and Trade Commission, the average rent of Grade A office buildings in Shanghai in 2005 was US$0.84 per square meter per day, and the price in Pudong's small Lujiazui area had exceeded US$1 per square meter per day, while The average rent on West Nanjing Road in Puxi reached US$1.04 per square meter per day.The high cost of business in Shanghai has become the focus of common concern of foreign-funded enterprises and government departments. The basic principles of economics tell us that capital always flows to places where costs are low and profits are high.Why not?

On August 3, 2004, 3M opened its fifth factory in China to Suzhou.This is a Fortune 500 company in the world, and it is also the earliest wholly foreign-owned company in mainland China except for companies in development zones and special economic zones.Since 1984, Shanghai has been the company's operation center and manufacturing center in mainland China. Before that, the total investment in China exceeded 300 million U.S. dollars. Its four factories are located in Shanghai's Caohejing New Development Zone, Songjiang Xinqiao Industrial Zone and Pudong and Waigaoqiao. However, 3M began to move, or in other words, due to the sensitive relationship between Shanghai and Suzhou, 3M carefully called its behavior "out of Shanghai and into Suzhou".

Wang Jinping, deputy secretary of the Suzhou Municipal Party Committee, personally went to Suzhou Industrial Park to welcome the arrival of 3M.In the battle for foreign direct investment, Suzhou has moved from the role of Shanghai's back garden to the front stage of direct confrontation.This is not the most brilliant victory for Suzhou. In 2003, Suzhou Industrial Park took over the semiconductor company Infineon from Shanghai Zhangjiang High-tech Park in one fell swoop, and its first phase joined the park with US$1 billion. Coincidentally, Unilever (China) Co., Ltd. also stated that the production base of the company's household and personal care products will be moved from Shanghai and other places to Unilever Hefei Industrial Park by the end of 2004.Zeng Xiwen, Director of External Relations of Unilever, claimed that the relocation would save the company 48% of production costs.

The fact is before our eyes that the high business and labor costs in Shanghai have discouraged foreign investment. For Shanghai, what is even more worrying behind the departure of 3M and Unilever is that in the first half of 2004, the contract value of attracting foreign investment in Shanghai was US$6.149 billion, an increase of only 1.26% over the same period last year, and the increase was significantly higher than that of the same period last year. The decline is far from the double-digit growth rate of the cities in the Yangtze River Delta.In the same year, Cai Xuchu, Chief Economist of the Shanghai Municipal Bureau of Statistics, admitted that Shanghai was "at a low point" in terms of attracting foreign investment.

Zhang Jun, director of the China Center for Economic Research at Fudan University, believes that it is an indisputable fact that labor costs in Shanghai are higher than in other regions in the Yangtze River Delta.Under this premise, if Shanghai continues to develop and invest in industries that can be processed and manufactured in other regions of the Yangtze River Delta, it means that in fact it will suppress and slow down the rising speed of labor costs in Shanghai, because only in this way can it be possible to maintain the manufacturing industry. There is some profit growth, but it also means that the growth rate of per capita income and living standards has slowed down, because doing so is tantamount to losing opportunities to invest in other areas with higher returns.

There is a contradiction here: reducing or suppressing labor costs, maintaining the dominant position of Shanghai's manufacturing industry in the Yangtze River Delta region, and attracting foreign investment means reducing the living standards of residents in Shanghai, because prices, land prices, and housing prices have been skyrocketing, wages But not up?This consequence can be foreseen by everyone. If the cow is required to work but not given grass, even the docile cow will lose his temper. Therefore, Zhang Jun said: "Shanghai's economy is in an embarrassing stage." In 2004, Zhang Jun said in an interview that Shanghai implemented a "crane economy" driven by fixed asset investment in bridge construction, road construction, and house construction. ’ and ‘scaffolding economy’. "Crane economy" means that Shanghai's economic growth is mainly driven by external investment, rather than internally generated economic forces like Zhejiang and Jiangsu. "Scaffolding economy" means that Shanghai's economic growth is mainly driven by fixed asset investment in building bridges, roads and houses.The most notable example is that Shanghai invested more than 200 billion yuan in the construction of exhibition venues and transportation for the World Expo.

Zhang Jun expressed concern about the "crane economy" led by Shanghai's strong government, and questioned: "Land lease plus the relocation of the central city, the World Expo effect, etc., there will be no problem in growing for another ten or twenty years. The problem is ten years , What will happen after twenty years?" The departure of 3M Company and Unilever has fully demonstrated the embarrassing position of the manufacturing industry in Shanghai. On March 25, 2009, the State Council's "Opinions on Taking the Lead in Forming a Service Economy-Based Industrial Structure and Accelerating the Construction of Shanghai's International Financial Center and International Shipping Center" on Shanghai's two center policies only mentioned the manufacturing industry It is: "Give full play to the advantages of the advanced manufacturing industry, provide strong support for the development of the service industry, and use the development of the service industry to drive the greater development of the advanced manufacturing industry."

"Some comrades said that now Shanghai only engages in the service industry and does not engage in manufacturing, and it must be finished. This is true." On the afternoon of May 11, 2009, at the work conference on promoting the "two centers" held by the Shanghai Municipal Party Committee and the Municipal Government Yu Zhengsheng, secretary of the Shanghai Municipal Committee of the Communist Party of China, said that manufacturing is an indispensable part of Shanghai. Shanghai is not free from manufacturing. The development of manufacturing is an important part of the service industry. The two are inseparable, but "(the State Council) alone As far as the manufacturing industry is concerned, it is unlikely that a document will be issued for a region. We need to operate more.”

The result of Shanghai's "operation" is to establish the high-tech industry as the core of the development of advanced manufacturing. On May 30, 2009, the Shanghai Municipal Government issued the "Implementation Opinions on Accelerating the Industrialization of High-tech in Shanghai", clearly developing new energy, civil aviation manufacturing, advanced equipment, biomedicine, electronic information manufacturing, new energy vehicles, The manufacturing strategy of nine high-tech industries, including marine engineering equipment, new materials, software and information services, replaces the positioning of six pillar industries established in 2005, including automobiles, steel, and petrochemicals.

The upgrading of the manufacturing industry, relatively, also means the upgrading of talents. "Shanghai Medium- and Long-Term Talent Development Plan (2010-2020)" proposes that the goal of Shanghai's medium- and long-term talent development is: by 2020, cultivate and gather a group of world-class talents, and give full play to all kinds of talents in supporting and leading The key role in economic and social development is to build Shanghai into an international talent highland with strong gathering capabilities and a wide range of radiation, and to build it into one of the most active areas in the world for innovation and entrepreneurship, and to play a leading role in implementing the strategy of strengthening the country with talents.

The outline proposes the main tasks for Shanghai to enhance its international competitiveness of talents.Including: establishing the Pudong International Talent Innovation Pilot Zone; further improving the permanent residence system, and actively introducing high-level talents in finance, shipping, strategic emerging industries, and high-tech industrialization.Build a group of innovation and entrepreneurship bases for overseas high-level talents; vigorously gather overseas high-level talents.Focus on introducing 2,000 overseas high-level talents who can promote the development of key industries and key fields in this city.Improve the internationalization of local talents. The fact that "the quality of the migrant population in Shanghai is generally higher than that in Beijing" once made the capital very envious.However, Shanghai is obviously no longer satisfied with the existing foreign talents, and is extending an olive branch to higher-end overseas and technological innovation talents. If you want to focus this change on one person, let me give you an example. Suppose you are an employee of a Fortune 500 company in Shanghai. You have a bachelor’s degree and have worked in this company for four or five years. Thinking that you are the most popular candidate, you finally get to see the moon when the clouds open, but unexpectedly, Cheng Yaojin breaks out halfway, and the headquarters hires a returnee with a high salary to fill the position you coveted.That's pretty much the case. Shanghai is willing to "pay" for such high-end talents, providing high salaries and various welfare policies, but this is changing. If you do not belong to this kind of object of care, it will definitely mean that the situation in Shanghai will become more and more difficult. For you, the cooked duck is flying, and the fat that reaches the mouth is robbed.what to do?In addition to blaming yourself for your bad luck, you can do two things to make up for the loss: 1. Recharge your batteries and improve your business level to surpass that of the "airborne" returnee. Work hard, assuming you really achieve it, your ability can make you earn a monthly salary of 20,000 now, so why bother to be nostalgic for the 10,000 monthly salary that was taken away by someone?2. Resign and change careers. There is no place to stay here. If you still want to stay in Shanghai, what can you do?It is natural to go to the industry with the most development potential and prospects. Zhang Xiang, executive director of the China National Center for Economic Exchanges and former vice minister of the Ministry of Foreign Trade and Economic Cooperation, said at the 14th Economic Monthly Talk held by cciee in August 2010 that the structure of the world economy is changing to a service-oriented one, viewed from New York To the United States, from the United States to see the world, the whole development shows a progressing process. Although the manufacturing industry is still considered to be the pillar of Shanghai's rapid economic development.However, compared with international metropolises such as London, Paris, and New York, the biggest gap between Shanghai and Shanghai is that the urban function of Shanghai is still dominated by manufacturing, while London, Paris, and New York are no longer dominated by manufacturing. Zhang Xiang said that the United States is a typical service economy, and New York is a sea of ​​service industries. New York is a place that does not serve products, but is a service industry.You can look at the economic structure of New York from the employment structure. The tertiary industry in New York is 93.4%. Then look at Beijing and Shanghai. Beijing is the capital, and the tertiary industry has accounted for 75.8%, while that in Shanghai is only 59.4%. Traditional service industry, including accommodation, commodity retail, cultural tourism and so on.But today's service industry has many attributes, such as medical insurance, communication services, financial services, health care, professional secretarial, and exhibition business, all of which are service industries. Numbers are very important in economics. Numbers are often boring, but numbers can prove many things with certainty and strength. What was the symbolic significance of the 20th century?It is also a number. In 1952, the number of white-collar workers in the United States accounted for 50% of the total employment. In other words, it surpassed blue-collar workers for the first time.This is equivalent to a milestone in economic and social development.The proportion of employment in the service industry has also risen, and the employment has grown rapidly, indicating that the evolution process of the employment proportion is consistent with the evolution process of the output value.It shows that most of the social development in recent years has been to serve the economic society, and it is no longer an industrial society.Let’s take a look at high-income countries. The tertiary industry accounts for 72%, middle-income countries account for 55%, low-income countries account for 51%, and the world average is 69%.The tertiary industry accounts for only 40% of China's GDP. If Shanghai wants to become an international financial capital like New York and London, it must follow the example of these two cities. In order to help the construction of Shanghai's four centers of international economy, finance, trade, and shipping, the government issued the "2009-2012 Shanghai Service Industry Development Plan" in 2009, which clarified 14 key areas and five key areas for the development of Shanghai's service industry. At the same time, it is planned that by 2012, Shanghai will become a major gathering place for international financial institutions and professional service organizations. The added value of Shanghai's service industry will exceed 1 trillion yuan, and the proportion of Shanghai's service trade in the country will increase from 18.6% in 2008 to 25%. Xiao Lin, deputy director of the Shanghai Municipal Development and Reform Commission and director of the Municipal Development and Reform Research Institute, said that Shanghai's strategic positioning is to build "four centers". , shipping, information, creativity, culture, tourism and other service industries. Today, even though Shanghai's rapid economic growth is unshakable, Zhang Jun still worries about the future of Shanghai.He said: "Although Shanghai's economy is developing so well, the future of Shanghai is, frankly speaking, unclear." The role it will play in the future economy is unclear.Although Shanghai proposed four centers and four pioneers at different stages, Zhang Jun felt that Shanghai’s economy still needs to be positioned in general, and he boldly proposed that China needs more Hong Kong, and Shanghai can be one of the options to allow Shanghai Drawing on the model of the Hong Kong Special Administrative Region, it would be a wise choice to go ahead. Zhang Jun believes that "China, as an economic whole, needs to go through the stage of industrialization. It needs to be driven by investment and industrialization to stimulate economic growth. In the existing development system, it is impossible for Shanghai to go too far without such a development model." In this way of thinking, it is impossible for Shanghai to become the second Hong Kong, completely separate from the economy, and then come back to provide services. Therefore, in the past 20 years, especially after the opening and development of Pudong, the economic growth has been very good, and the whole of China The pace of economic growth is to prosper and grow together, but the growth is concentrated in Shanghai and becomes more effective, but in terms of growth model, it has not broken away from the stage where China's economic growth relies on industrialization." "I believe that everyone hopes that Shanghai can fully exert its influence in the economic development of the Asia-Pacific region like Hong Kong and Singapore, become a center of trade, shipping, information, etc., and have better services and radiation functions for China. But what we have to think about But, in the process of achieving this goal, how far can Shanghai go?" As an administrative special zone, Hong Kong has its own advantages on the way to become an international financial capital.Just as Hong Kong Chief Executive Donald Tsang said: "We believe that if any company, including HSBC and other companies, needs RMB to do business, he must go to Shanghai to list. But if they need foreign capital, whether it is HSBC or If there are enterprises in the mainland, where do they go? They must go to Hong Kong.” Hong Kong's biggest advantages are the rule of law, talents, financial supervision as the leader in Asia, and free currency exchange, which Shanghai will not be able to catch up in the short term. Shanghai will form an industrial structure dominated by the service economy and become the main gathering place for international financial institutions and professional service organizations.In this process, we are faced with a huge challenge - the limitation of RMB not being freely convertible.This also exposed a series of problems that Shanghai faced in the process of establishing an international financial center that could not be solved by itself. In fact, this question goes back to the long-standing debate on the pros and cons of the "Shanghai Model". The so-called "Shanghai model" means that the government, as the main body of development, allocates various resources of the city as effectively as possible to promote the economic development of Shanghai.The most typical feature of this model is that it assumes the function of the government as the main body of economic development in the form of a government company. Zhang Jun’s bold suggestion that Shanghai follow Hong Kong’s example and become a “special administrative region” also implies that Shanghai should get rid of the “Shanghai model” as soon as possible.Otherwise, the road to become an international financial capital will be very bumpy. The advantages of the government-led economy and investment-driven model are obvious.The government uses its credit to gather a large amount of capital and develop a certain industry strongly. Of course, the effect is immediate; but the economy under the government's leadership is often dominated by state-owned enterprises, and the means are mainly administrative or semi-administrative. The efficiency is not high. High, the moral hazard is also high.More importantly, once Shanghai uses state-owned capital and administrative means to allocate resources, the power of marketization is often restrained. Yi Xianrong, a researcher at the Institute of Finance and Economics of the Chinese Academy of Social Sciences, believes that there is still a big gap between Shanghai and the international financial center: "The establishment of a modern international financial center requires the role of the government. However, judging from the evolution and development of the modern market Look, the establishment of any market is a process of natural evolution. If the formation of a market is more led by the government and driven by human factors, especially government factors, then it is impossible for this market to develop healthily. " However, "From the perspective of the current construction of Shanghai's international financial center, the formation of Shanghai's international financial center hopes to reflect the new model of state intervention and government leadership. The emphasis on the effectiveness of interventions and interventions should be placed on organizational guarantees at the national level, legislative support from the central government, and policy inclinations.” If Shanghai continues to maintain the "Shanghai model", can it successfully become an international financial center in 2020, keeping pace with New York and London?No one dares to predict this result, just like no one would say in front of the parents of a newborn baby that this child may become a waste in the future. Everyone is used to saying auspicious words and saying that we must have confidence.Even someone keenly aware of a child's flaws would not simply say that the child is hopeless. Similarly, when you are infected by Shanghai's bold words and lofty ambitions, you will devote yourself to her transformation into a financial center without hesitation, but in the end, your career will be blocked due to various restrictions and "unfairness", and your future will be uncertain.At this time, what should you do?Perhaps Shanghai will not admit that the powerful government interferes too much in the economy until 2020, and building an international financial center requires a freer market economy.Of course, this is just a possibility.Moreover, major limitations such as "the renminbi is not freely convertible" are not problems that Shanghai can solve on its own. In a city, different leadership groups or strategic policies can be changed; Shanghai can hesitate and make mistakes, because she has a strong backing, which is the central government. In the spring of 1991, Deng Xiaoping inspected Shanghai and designated Shanghai as a financial center development goals.Deng Xiaoping used a figurative metaphor to say, “Finance is very important, it is the core of a modern economy. If finance is done well, one move of chess will make everything work.” He also said, “Shanghai used to be a financial center and a place where currency can be freely exchanged. In other places, we will do the same in the future. China’s international status in finance depends first on Shanghai.” The importance of Shanghai is self-evident. Naturally, the central government will not let go of such an important pawn and let others hold it.This of course has advantages and disadvantages.It's just that I have to remind you that Shanghai can make mistakes, but you can't.If you want to follow the trend of building Shanghai into an international financial center and fight in this city, you must be aware of the variables you may encounter in the middle of the process and the price you will pay for it—not to mention, here In this city, the "sacrifice" you are most likely to encounter is to make money desperately, but in the end it is all given to the real estate agent. Zhang Jun attributes the double-digit growth of Shanghai's economy in recent years to the contribution of foreign investment and the real estate industry. Although this view is considered "extreme" by some officials in Shanghai, since 2000, the Shanghai Municipal Government has Take real estate as the pillar industry of Shanghai's economic development. According to the relevant report of the "Economic Observer": "The important contribution of the real estate industry to Shanghai's economy began in the 1990s. Statistics show that in the mid-1990s, foreign investment in the real estate field once accounted for 40% of Shanghai's annual investment ratio." This round of overheated investment led to the decline of Shanghai's real estate industry from 1996 to 1998, and a large number of vacant commercial houses on the market were difficult to absorb. After that, starting from 1999, Shanghai's real estate industry ushered in a recovery growth. And it was included as one of the six pillar industries in Shanghai's Tenth Five-Year Plan in 2000. Since then, the contribution of the real estate industry to Shanghai's GDP has increased year by year, from 3.71% in 1995 to 7.4% at the end of 2003. " In the "Tenth Five-Year Plan" originally set by the Shanghai Municipal Government, it is estimated that by 2005, the added value of the real estate industry will contribute more than 7% to GDP. The goals set in the "Five" plan. Yang Jianwen, deputy director of the Departmental Economic Research Institute of the Shanghai Academy of Social Sciences and an expert in decision-making for the municipal government, said in 2004 that there are currently two main pillars of Shanghai's economy: automobiles and real estate, but these two industries have entered a period of risk. People's doubts about Shanghai's real estate industry have never stopped.Beginning in January 2003, real estate prices in Shanghai began to rise wildly, with an annual increase of more than 20%.In the previous three years, the annual growth rate of housing prices was 3%, 8% and 13% respectively. "If housing prices are so high that no one can take over; the supply of vacant houses reaches the maximum and cannot be digested at all; people's investment in real estate reaches the highest and they cannot continue to invest. When such a 'three high' situation is reached, it is time for the real estate industry to collapse. "Professor Zhang Hongming, vice chairman of the Real Estate Industry Research Center of Shanghai Academy of Social Sciences, "predicted" such a day, will this day come? The Shanghai Municipal Government did not sit idly by and watch the status quo develop. In April 2004, Cai Yutian, director of the Shanghai Municipal Housing and Land Resources Administration, announced that the Housing and Land Bureau and other relevant departments would introduce three policies to stabilize housing prices in Shanghai, including lowering the pre-sale standards for commercial housing. In May, Pang Yuan, deputy director of the Real Estate Bureau, said that the relevant investigation on the policy of lowering the pre-sale standard of ordinary commercial housing has been completed. If the policy is introduced, the supply of ordinary residential commercial housing listed in advance will reach 5 million square meters. The completed supply of 3 million square meters of supporting commercial housing will greatly increase the market volume. However, some subsequent signs showed that the Shanghai municipal government was hesitant to regulate the real estate market.Pang Yuan said in the "Shanghai Real Estate Market Situation Analysis Report for the First Half of This Year", "Because the effects of a series of control measures introduced by Shanghai in the first half of the year are gradually emerging, coupled with the national macro-control policies, especially the credit policy, The impact on the real estate market needs to be evaluated later. I hope that the credit control policy will be implemented smoothly and achieve a soft landing...In the second half of the year, Shanghai will focus on deepening, refining and improving various policies that have been introduced to maintain the stability of industrial policies .” Industry insiders believe that such a statement shows that after the previous regulatory policies have had an effect and have an impact on people's psychological expectations, the Shanghai Municipal Government will handle the regulatory policies that will affect housing prices in a "low-key and prudent" manner. On April 17, 2010, the State Council issued a notice pointing out that in areas where commodity housing prices are too high, too fast, and supply is tight, commercial banks may suspend the issuance of loans for the purchase of the third and above housing according to the risk situation; Non-local residents with the above local tax payment certificates or social insurance payment certificates are suspended from issuing housing loans. The notice requires that real estate speculation and speculative purchases of various names are strictly restricted.The local people's government may, according to the actual situation, take temporary measures to limit the number of houses purchased within a certain period of time. Nearly a month after the release of the new policy, the implementation rules of first-tier cities such as Beijing and Shenzhen have been unveiled, but the market has been waiting for the "boots" of Shanghai's rules to land.Although the relevant person in charge of the Shanghai Municipal Housing Security and Housing Management Bureau told the Xinhua News Agency reporter on May 13, 2010, Shanghai will resolutely implement a series of measures of the State Council to resolutely curb the excessive rise of housing prices in some cities, and "strictly control ". However, the result of this "strict control" is that 100 days after the State Council's "New Deal" was promulgated, the average transaction price of commercial housing in Shanghai reached 23,242 yuan per square meter, an increase of 10% from the previous week. The level before the new real estate policy (data jointly provided by Youwei and Property Market Review Network). China News Network reprinted a report from Shanghai Youth Daily on August 30, 2010: "Recently, lottery, queuing, and crowding, these long-lost phenomena have reappeared in the Shanghai property market. The volume was once in a slump. But before the housing price has a significant correction, some real estate sales have been hot again recently." The developers must be very happy. Under the series of heavy blows from the central government, the housing prices in Shanghai have not fallen, and the enthusiasm for buying has not diminished.Regardless of whether it is rigid demand or reactivation of investors, the bright future of Shanghai as an international financial center makes people with money and without money willing to spend money and blood for this feng shui treasure. As early as the end of 2003, officials from the Shanghai Municipal Bureau of Housing and Land said that Shanghai's investment-type housing purchases approached the international warning line of 20%. "Speculation makes the real estate market seem very active and the demand is very strong, but the houses in the hands of speculators do not represent demand, but still supply." Hua Wei, deputy director of the Real Estate Research Center of Fudan University, said, "Unlike other resources, land does not With continuous productivity, no matter how high the price of a house is raised, its value has not increased.” Some studies have shown that the spending power of Shanghai residents has been stretched by the booming property market.Facing the abnormally high housing prices, many high-tech talents sighed at the "housing", some quit, and some had no choice but to bid farewell to Shanghai.Zhu Zhiyuan, deputy to the National People's Congress and vice president of the Shanghai Branch of the Chinese Academy of Sciences, revealed in an interview in March 2010 that because of housing pressure, at least 30% of young scientific research elites have been "scared" away in the past two years. "Now, people in their thirties and forties have become the backbone of scientific research. If the current housing prices are used as a frame of reference, almost all of them belong to the poor, and no one can afford commercial housing." "Talent, the unit can only give 300,000 subsidies, "this is not enough to get it on the market."