Shanghai has to build more than buildings to compete

Depending more on services, especially highly value-added services, is an inevitable course for Shanghai - even although its manufacturers, such as those in the automobile, pharmaceutical and petrochemical industries, did generate good growth last year.

Equipment and machinery manufacturing had been suffering from a lack of orders through the year, municipal officials admitted. And that would be enough to signal the same predicament coming for other industries.

This being the case, it is easy to understand why Han Zheng, the chief official of Shanghai, said he "didn't feel quite all right" after he went through the list of the top 100 private corporations based in the city - because the majority of them are real-estate developers.

Private companies are supposedly representative of the more flexible, if not more innovative, forces in the market.

Shanghai doesn't have

At the same time, it just can't help conceding orders and revenues to traditional industrial manufacturers based in lower-cost locations. With a few exceptions, it won't take long for mass-production based manufacturing to fade away from the oldest industrial city in China.

The author is editor-at-large of China Daily.