Shanghai Street View: Zoned Out

Shanghai often looks more like a laboratory these days than a modern financial hub, as the number of new and experimental zones and projects in the city accelerates under Beijing’s new, reform-minded leaders. On a single day last week, I read at least 6 reports about various new projects and zones coming on stream in the city, including several in the Pudong area.

And then of course there’s the granddaddy of all these recent new zones, namely the Free Trade Zone in Pudong, known affectionately to zone lovers as the “China (Shanghai) Pilot Free Trade Zone.”  I’ve deliberately refrained from writing about this new FTZ for the last 2 months since its formal launch, mostly for personal reasons. I don’t really oppose such zones in principle, but rather I do sometimes feel I’m starting to suffer from a certain “zone burnout” that comes from living in China for so many years.

Somewhat appropriately, I’m writing about Shanghai’s recent love affair with new experimental zones as we mark the 170th anniversary of the opening of the port of Shanghai back in 1843. That event marked the start of Shanghai’s ascendance to the global map, kicking off a process that would see it become a living laboratory for a unique mixture of eastern and western ideas.

But moving back to the present, I found myself feeling just a bit zoned out last week on reading all the reports of new and experimental projects in the papers one day. Not surprisingly, the FTZ itself was among the headlines with word that the zone was rolling out a special credit system for companies that set up shop there. On the same page of the newspaper was another story about a new experimental area in Pudong designed to provide microcredit for small and medium sized businesses.

Elsewhere I got to read about a new creative park being set up in Pudong on the site of a major grain storage facility. Other local leaders were also feeling the need to join this wave of experimentation, with yet another report detailing the overhaul and transformation of two 80-year-old buildings in the Hongkou district.

Not wanting to be left out of this wave of reform and experimentation, other city planners announced their own major expansion of Shanghai’s popular matching-making event for singles. It seems the mass event, which recently expanded to a twice-yearly format, was being expanded further still to include special events just for returning overseas Chinese, public servants and the elderly, as well as an event for the parents of singles looking for mates.

As a longtime China resident, I’m certainly no stranger to these kinds of pilot programs and zones. I remember in the 1980s when nearly every city rushed to set up its own industrial, trade or high-tech zone, led by the city of Shenzhen and the entire Hainan island that were named as special economic zones during that time. Pudong was also named as a special zone during that time, launching a process that has seen the area transform from a huge tract of underdeveloped land to its current status as home to China’s tallest skyscrapers in the Lujiazui financial district.

The zone fever seemed to die down a bit in the 1990s, as cities big and small struggled to fill up all their newly created zones. I haven’t seen any formal study, but I suspect that many of those zones remain vastly underpopulated, and many may be filled with mostly smaller companies with strong government ties.

At the same time, Shanghai does seem to have a good record for hosting many of the country’s more successful zones, with Pudong serving as a showcase of what can be accomplished with proper planning. In many ways the rise of Pudong and Shanghai in general is testament to the city’s ongoing role as China’s living laboratory where new ideas can be tested out before expanding to the rest of the country.

As I’ve said above, I’m not particularly opposed to these zones and do think they have played a major part in China’s rapid economic transformation over the last 25 years. But I do also hope that this latest round of zone fever subsides soon, so that everyone can go back to the important business of trying out new ideas in both the corporate and social realms, and spending less time talking up plans for new pilot programs.