A view of Lujiazui Financial Center in Pudong New Area Photo: VCG
The Chinese central government on Thursday issued a directive on building the new Pudong area in Shanghai as a pioneer area for socialist modernization in the years to come.
Analysts said that by emphasizing the “dual circulation” paradigm, Pudong will become China’s hub when the country becomes the world’s largest economy before 2035.
The directive, issued jointly by the Communist Party of China (CPC) Central Committee and the State Council’s cabinet, listed several measures to guide the new Pudong area in building its leadership position and conducting the Shanghai’s efforts to lead the integration of the Yangtze River Delta, and build the area as a shining window to a modern socialist country.
By 2035, Pudong will see that its modernized economy is fully established, a modern urban area built, and modern governance fully realized. Its level of urban development and its international competitiveness will be the best in the world, according to the directive.
By 2050, Pudong is expected to become a major, highly attractive, creative, internationally competitive and influential urban area, becoming a global model of urban governance and the “shining pearl” of a large modern socialist economy.
The directive stipulated that Pudong should continue to pursue high-quality reforms and openness, and forge a central pole of national circulation and the strategic link of the development paradigm of “dual circulation”.
Tian Yun, a Beijing-based economist, told the Global Times on Thursday that Pudong would become a pioneer by focusing on the dual circulation paradigm.
“By 2035, China will be the world’s largest economy with the world’s largest manufacturing industry, and Pudong in Shanghai will become a modern hub for the country,” Tian said. “Behind this lie the high-tech, high-tech industries of the Yangtze River Delta as well as innovation bases at the national level – the embodiment of national strategic interests.”
The outlines of the new role of the new area of Pudong in Shanghai follow the designations of the state for other competing localities.
In June, central Chinese authorities issued a directive designating eastern China’s Zhejiang province as a demonstration area for common prosperity.
Another directive was published in 2019 for Shenzhen, in the province of Guangdong (southern China), to make the city a demonstration zone of socialism with Chinese characteristics. A more detailed plan was released last year.
Tian said Pudong’s role is different from that of Shenzhen, which focuses on strengthening its integration with Hong Kong and the Big Bay region. “Pudong’s role will be a pioneer in nature.”
In terms of an international financial center, Pudong will be different from Hong Kong, as it will become the global financial center which mainly uses the yuan, Tian said.
The directive published Thursday offers tangible benefits to research institutes by exempting import duties for equipment intended for research. Businesses in sectors of vital importance – integrated circuits, artificial intelligence, biopharmaceuticals and civil aviation – will benefit from corporate tax relief for the first five years after operation.
The new Pudong area is also expected to set up a standard blockchain system for trade finance and conduct a pilot program for the digital yuan.
“One of the highlights is that the plan will build a special economic functional zone in Pudong which will undergo open economy risk and pressure tests,” Sun Yuanxin, deputy director of the Free Zone Research Institute from Shanghai to Shanghai University of Finance and Economics, told the Global Times on Thursday, noting that the entire Pudong region would become a special economic zone in the future.
At present, the Lingang Zone, a newly launched section of the China (Shanghai) Pilot Free Trade Zone, is a Special Economic Function Zone, but through the development of Pudong, it will lead the development of the five centers in Shanghai and will further promote the integration of the Yangtze River Delta to better serve the whole country, the expert said.
Shanghai aims to become an international center of scientific and technological innovation, a financial center, a shopping mall, a shipping center and a consumption center.
The document also talks about “formulating a list of special measures for Pudong to facilitate market access,” which Sun said is an indication that Pudong will open up more vigorously than any other part of China.
China has established 21 pilot free trade zones and is attracting more and more foreign investment as it becomes an increasingly popular destination for foreign investors, according to media reports.
Pudong will boldly shoulder the heaviest burden, “break the hardest bone”, and strive to become a pioneer of reform and opening up to a higher level, according to the directive.
According to public information, since 1990, when the central government decided to allow Shanghai to accelerate the development of the new Pudong area, the district has achieved exceptional achievements, with a GDP exceeding 1,200 billion yuan (185, $ 8 billion) in 2019.
Shanghai has also decided to become a global center for commodity trading, and by 2035 the new Pudong area is expected to have the same international influence as New York, Tian said.