Updated: 2005-06-20
SHANGHAI: The future of China's business hub will require a careful balance of resources, people and development goals, the city's mayor told a delegation of business leaders over the weekend.

Mayor Han Zheng made the comments while meeting with more than 30 business leaders from multinational companies who were in Shanghai to attend the 12th China Daily CEO Roundtable 2020: the World's Shanghai. The roundtable was held on Friday at the city's Grand Hyatt hotel.

Shanghai is trying to balance economic growth and environmental protection, a huge population and limited natural resources, the mayor said on Saturday during the meeting with delegates to the roundtable.

The city is also addressing social problems such as unemployment and an ageing population, he added.

"We are facing very tough challenges in our development, and we need a world perspective, world talent and world expertise.

"We will continue to listen to your opinions and are open to new ideas from you," he told the executives at the meeting.

McDonald's could be more successful in China if it catered to the tastes of senior citizens, the mayor told the food giant's China head.

"McDonald's is quite successful in Shanghai. You really grabbed the hearts of the younger generation," Han said, in response to a question raised by Guy Russo, Greater China president of McDonald's China Development Company.

"In the Chinese market if you get the kids, you get everyone.

"My suggestion is if you develop something for the elderly, it would also be very successful," the mayor said.

During his meeting with the group, Han laid out a blueprint for the development of the metropolis.

Ports in Shanghai will handle more than 400 million tons of cargo this year, a volume no port city in the world reached last year, Han said.

In particular, the city will be capable of handling more than 17 million TEUs (a standard unit equivalent to one 20-foot container) of cargo this year, up 3 million TEUs from last year. It is now the world's third largest container port city after Singapore and Hong Kong.

"Shanghai was a major port city in the past, and it will become a world-class port in the future," Han said.

Shanghai's deep-water Yangshan Port, currently under construction on an island linked to Shanghai by a 32.5-kilometre-long bridge, will become operational in the fourth quarter this year, according to the mayor.

Shanghai, the engine of the affluent Yangtze River Delta which accounts for over 20 per cent of China's GDP, has been slated by the central government to become an international economic, financial, trade and shipping centre.

"This goal tallies with the theme of this roundtable," said Han.

Shanghai is set to upgrade its industrial structure to reach that goal by 2020, he said.

One focus for the municipal government is the service sector, including financial, information and logistics services.

The service industry accounts for about 48 per cent of Shanghai's GDP, but that number shoots up to between 75 and 80 per cent within the 600-square-kilometre urban area, and that is comparable to New York or Paris.

But Shanghai's traditional manufacturing industry will not wane amid the explosion of service industries, as Shanghai will cultivate advanced manufacturing industries in its suburbs, Han said.

Shanghai-based Baosteel, China's largest iron and steel producer and example of the city's industrial prowess, has a yearly output of more than 20 million tons. And Shanghai's automobile industry, which boasts some of the country's largest factories, is moving towards an annual output of 2 million vehicles.

The city also has plans for a 50-square-kilometre chemical industry park in Hangzhou Bay, which Han said would be "world-class."

Amongst all these changes, "there remain challenges and bottlenecks which we have to tackle," Han said.

"The Shanghai government recognizes there is a limitation on its land, on its resources, and on its environment and they believe they have to turn their attention to the knowledge intensive, high value added, lower resource utilization and lower environmentally polluting types of business," said Edward Tse, managing director of Booz Allen Hamilton (China).

"There are increasing concerns about Shanghai but there is also increasing interest to come to the city. The two forces are in a bit of a tug of war," said Tse.

The roundtable gathered CEOs and senior executives from 35 multinational companies including Bayer, Deloitte, Carrefour, ABB, HSBC, Honeywell, JPMorgan and Richemont.