The city is to step up efforts to develop a modern services sector to enhance its global competitiveness and transform from a manufacturing-based to services-based economy.

That is according to Mayor Han Zheng, who made the remarks yesterday at the 17th International Business Leaders' Advisory Council for the Mayor of Shanghai.

To become an international economic, financial, trade and shipping centre, the city will speed up construction of functional clusters in both urban and suburban areas and foster a number of large and competitive service groups.

Han said priority would be given to financial services, logistics and information technology sectors.

Long Yongtu, secretary-general of the Boao Forum for Asia, endorsed Han's efforts.

Long said developing a modern services sector will help upgrade the manufacturing industry, and create more jobs for rural residents.

He encouraged the city to develop retailing, logistics, tourism, entertainment and catering industries.

To develop a modern services sector, Long believes Shanghai should integrate resources throughout the Yangtze River Delta region.

"Shanghai should take the lead in breaking the restrictions of administrative division, allowing a free flow of goods, capital and labor force," he said. He also called for the breaking of boundaries separating administratively divided industries, including air, land and sea transport.

He said the three transport systems should be better integrated to achieve higher efficiency.

Another aspect Long and other business leaders emphasized was a better environment.

"Raising one precious kind of flower is more difficult than raising 1,000 kinds of ordinary flowers," he said.

Developing a modern services sector requires a transparent and predictable legal framework and high-quality administration.

Samuel A. Dipiazza, chief executive officer of PricewaterhouseCoopers, believes a fair and properly enforced legal and regulatory environment is very important for a city wanting to attract high-level service organizations.

As China's economic hub, Shanghai takes the lead in the development of modern services.

When the council first opened in 1989, the added value of the city's tertiary industry accounted for less than 30 per cent of gross domestic product (GDP). Now it makes up nearly half the city's GDP while in urban areas the ratio reaches 70 percent.

(China Daily October 31, 2005)