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Shanghai Prepares for WTO Challenges

Mayor Xu Kuangdi said yesterday's gathering of the International Business Leaders Advisory Council for the Mayor of Shanghai was a great chance to discuss the challenges and opportunities the city will face once China joins the World Trade Organization.

After meeting with the council's 36 members - mostly leaders from large multinational companies such as Coca-Cola and General Motors - Xu said the city must understand and play to its strengths to compete globally.

He compared Shanghai's strategy to succeed as an international business center to China's attempts to win gold at the Olympic Games.

"We can't win in the 100-meter dash no matter how hard we work, but we can reap gold in other fields such as table tennis and gymnastics," said Xu, who has been mayor since 1995.

But, he warned, "We need to readjust our economic structure."

A major part of the readjustment will be moving from a regulated economy to a market economy, Xu told reporters.

Sticking with his sports metaphor, Xu said, "The government is no longer coach or club manager, it is referee."

He told reporters that a discussion of shifting government roles was the most interesting part of the day-long meeting.

"We are going to gain something and lose something," Xu said of efforts to reduce bureaucracy, "but the city must change if China is to enter the WTO."

Shanghai's government has already taken several steps to reduce bureaucracy and make it easier to do business in the city.

Authorities recently launched a "one-stop" service for enterprises in a bid to simplify the process of applying for a business license, but the mayor called the step "far from enough."

He promised the city will spend two years cutting red tape to ensure it is in full compliance with the WTO.

"The government should learn how to help enterprises operate independently, and enterprises are supposed to supervise the government," Long Yongtu, China's vice minister of Foreign Trade and Economic Cooperation, said after attending the meeting.

Jiang Shangzhou, executive deputy director of Shanghai's Economic Commission, told reporters after the meeting that China will phase out the so-called "managed economy," implying the government will focus on assisting enterprises instead of managing them.

The council - some-times referred to as IBLAC - was created in 1989 by then-mayor Zhu Rongji to seek input from business leaders about how Shanghai could improve its investment environment.

IBLAC has met annually since, choosing a new topic every year with a stated mission of helping Shanghai take its rightful position among the world's most prominent business, educational and cultural centers by the year 2010.

This year's meeting was particularly well timed as China is expected to be officially accepted into the WTO on Thursday at a meeting of trade ministers in Doha, Qatar.

Several business leaders said they also profited from the meeting with top local officials and ministers from the central government.

"We also learned from the meeting," said Robert Greenhill, president of Bombardier International.

He, like many other participants, wouldn't say what precise benefits membership on the council offered.

But they were willing to discuss their optimism about Shanghai's future.

The government used yesterday's event to further push its plan to turn Shanghai into a "Global Procurement Center," an idea officials hope will increase the city's exports by several billion U.S. dollars a year.

The government wants to see multinational companies set up their Asian sourcing headquarters in Shanghai, and is backing up the wish with rewards for companies that move their offices here.

Next year, IBLAC will focus on how to build Shanghai into an international city.

(eastday November 5, 2001)


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