This year marks the 70th anniversary of Shanghai’s liberation. As China's economic powerhouse, Shanghai has gone through four major stages when it comes to the optimization of industrial structure and the adjustment of industrial development strategies:

1. Before the reform and opening up (1949-1978): a stage of “excessively advanced development of heavy and chemical industries” under the guidance of the catching-up strategy. This period witnessed the contradiction between the long construction period of heavy industry and capital scarcity, that between the dependence on imported heavy industry equipment and foreign exchange shortage, and that between the large-scale initial investment and the weak monetary mobilization, and to make it worse, it was in for a bumpy ride in terms of economic development. As a result, the primary, secondary and tertiary industries developed at a relatively slow pace. Despite all of that, Shanghai managed to lay a foundation for the heavy and chemical industries including steel and petrochemical during this time.

2. From 1979 to the end of the 20th century: a stage featuring coordinated development of the secondary and tertiary industries with comparative advantages brought into full play. In the early 1980s, Shanghai introduced new policies and gave top priority to the textile and export substitution industries. Meanwhile, it proposed to focus on “eight major industries” such as textiles, instrumentation, light industry, etc. In the 1990s, it stepped up investment in energy, transportation, communications and other sectors. In 1994, it designated six pillar industries. The policies in the service industry underwent substantial changes and adjustments and the plan to build Shanghai into an international economic, financial and trade centers was proposed in 1994. In 2009, the development strategy of “four centers” (the shipping center was added later) came out, marking a shift of Shanghai’s development mode, namely from a single industrial center to a diversified one.

3. The end of the 20th century and the first decade of the 21st century: a stage featuring re-industrialization and upgrading of the service industry. Starting from 1998, Shanghai accelerated its industrial development. Different from the rapid growth driven by the government’s direct intervention and the distorted prices before the reform and opening up, this industrialization during this period was a natural result of the industrial development itself. Apart from the developing advanced manufacturing, a productive service industry represented by R&D, financial insurance and other industries took shape. The “Key Support Catalogue of Shanghai’s Industrial Development” published in 2008 covered 20 prioritized industrial clusters support, with the first eight being modern service industries, and the rest being advanced manufacturing industries.

4. The second decade of the 21st century: a stage of re-energized manufacturing and service industries guided by the scientific and technological innovation strategy. During the “Twelfth Five-Year Plan” and “Thirteenth Five-Year Plan” periods, Shanghai sets its sights on the global layout of innovation and deepening globalization, and at the same time strives to build itself into a global scientific and technological center and a manufacturing base with global influence. Meanwhile, it ramps up its efforts in developing high-end service industry, and attaches great importance to the cultivation of service-related capabilities such as independent research & development, and commercialization of achievements, in the hope of continuously enhancing the competitiveness and influence of its industries.

Author: Lin Lan