Official statistics reveal Shanghai-based enterprises have initiated more than 3,900 jointly operated projects in the Yangtze River Delta, involving a total investment of 4.5 billion yuan (US$542 million).

More than 4,400 businesses have been set up in Shanghai by companies from Jiangsu and Zhejiang provinces.

With a total registered capital of 20.3 billion yuan (US$2.45 billion), these businesses account for nearly 50 per cent of new firms set up locally by companies from outside Shanghai.

"These booming two-way exchanges show that regional co-operation is the way forward to achieve a win-win situation," said Fei Jinsen, a senior official of the co-operation office under the city government.

The office's major function is to work with provinces and areas outside Shanghai to boost mutual development through a variety of joint-operated programmes.

Regional co-operation is needed to make the best use of respective advantages of the relevant areas in the delta region, Fei added.

While Shanghai has decided to target the tertiary industry as the major force for future development, Jiangsu Province is focusing on the growth of its township enterprises, and Zhejiang Province is highlighting the development of its private businesses.

Against the backdrop of China's entry to the World Trade Organization (WTO), it has become increasingly important to foster a dynamic market-driven "urban ring" around the delta, said Jiang Guangyu, vice-secretary-general of the Shanghai municipal people's government.

"The inflow of non-State-owned businesses into Shanghai will help optimize the local industrial structure," said Cao Dali, director of Zhejiang's liaison office in Shanghai.

But experts are still concerned about whether these projects will be effective given the existence of respective regional interests.

"Most cross-region businesses set up in recent years are the result of the initiative of the firms involved," said Chen Wei, senior researcher of the Shanghai Academy of Social Sciences.

"Before any substantial achievements are made, a key point is to form a common understanding among those governments involved on the importance of boosting regional co-operation."

The central government should play an active role in pushing co-ordinated development based on the integration of respective resources, he added.

(China Daily April 5, 2002)