Morning:
8°c
Among talk of reserve currencies and other G20 posturing last week, it was good to see Shanghai get a plug from China's state council. In the obscure world of Chinese politics, not much needs to be said to be significant. The council gave clear support for Shanghai's plans, particularly on the expansion of finance and shipping.
Shanghai has been developing its financial sector since the early 1990s. It wants to be the Asian financial hub. But it still doesn't have the financial products and markets of Hong Kong. As a result, it lacks that essential ingredient for a financial centre: a pool of skilled professionals. This is not something that can be cured by investment alone. It requires a complex mix of liberalisation, regulation and encouragement. This may now happen.
Shipping is in the Shanghai blood. Things have moved on since ships used to moor off the Bund but the lack of a deep-water port was a problem until recently. Restricted by the shallow mouth of the Yangtze, Shanghai took a Gordian knot approach. A couple of islands were borrowed from neighbouring Zhejiang province and a 20-mile bridge built to link them to Shanghai. It opened in 2006. Deep-water port arch-rival Ningbo was not pleased. It'll be even less pleased by thinly veiled suggestions of an operational merger with Shanghai.
Passenger shipping is being encouraged and a major cruise liner terminal was opened last year near the Bund. But there was a slight problem. Cruise ships are getting bigger but the Yangpu bridge, just down river from the terminal, is too low to let in the largest floating palaces. No problem for the resourceful. A second terminal, for large vessels, is being built further down river.
* There are signs the proposed maglev train route to Hangzhou is on hold. Many homeowners demonstrated against having a high-energy magnetic field zipping past their windows. Officially it's still under discussion but the fact that work has started on a high-speed rail link to Hangzhou may give some hope for people power.
* Statistics for 2008 show that Shanghainese are taking to credit cards with a vengeance. By the year end there were eight million in issue, up 73% on 2007. And bad debt rates? Falling for Chinese banks but rising for foreign ones. No surprise there then.
