ShanghaiLingangEconomicDevelopmentZoneStrategicPositioningandPlanningInterimreportNovember4th,2002,ShanghaiCopyright©2002byA.T.KearneyThisdocumentwaspreparedbyA.T.KearneyfordiscussionwithShanghaiPlanningCommissionandmaynotbeusedforotherpurposes,ordisclosedtootherpartieswithoutthewrittenpermissionofA.T.KearneyA.T.Kearney10/10.02/17231d_011©2002Agenda�Executivesummary�Statusofproject�Relevanttrendsininternationalindustrymigration:ImpactonShanghai’sinternationalization�NecessityandstrategicfeasibilityofCCEDZ�Nextsteps�Appendix:•Selectedinternationaldevelopmentzones•AssessmentofindustriesA.T.Kearney10/10.02/17231d_012©2002ExecutiveSummaryA.T.Kearney10/10.02/17231d_013©2002ExecutiveSummaryExecutivesummary(1)�TheA.T.KearneyFDIConfidenceIndex®showsthatChinaismoreattractivetoforeigninvestorsthancompetingAsiancountries.•ChinaranksfirstinElectronics,HeavyIndustry(e.g.EquipmentManufacturing),LightIndustryandChemicals/Petroleum.Itranks10thinTelecommunication.•ItisexpectedthatChina‘saccessiontoWTOwilldrawsignificantadditionalFDIflowstoChina.•Laborintensiveindustrieswilllikelybecomemoreattractedthancapital-intensive,highvalue-addedindustries.•However,Chinaisalsorapidlybuildingupcapabilitiesinhighvalue,automatedproductionlines(e.g.semiconductors),whichwillbethespearheadforfuturehighvalue-addedindustries.�ThenecessityandfeasibilityfortheintendedCCEDZwillbedeterminedviaanecosystem:•MajorcriteriaforCEOsinvestmentdecisionsare–inadditiontomacro-economiccriteria,suchaslaborcosts,andgovernmentpolicies–locationspecificcriteriaasavailabilityofpotentialstrategicpartners,theexistenceofanestablishedindustrystructure(e.g.suppliers,contractmanufacturers,marketpartners,customerindustries)andtheexistenceofindustry-specificinfrastructure(e.g.logistics,utilities,…)•Tobetterpositionitselfwiththeseinvestors,ShanghaineedstobuildupcomprehensiveecosystemsfortargetindustriesasvaluepropositiontoattractFDI.Anecosystemrepresentsasignificantvaluepropositiontopotentialinvestors:—Relevantparticipantsalongthevaluechainassuppliers,serviceprovidersandinfrastructureareinplace—Ecosystemscanbelinkedtootheraffiliatedecosystems(e.g.chemicalandpharmaceuticalecosystems)—Ecosystemscanrealizecross-industrysynergies(e.g.sameserviceprovidersandlogisticalinfrastructure)�BasedonrespectiveFDI-growth,generallocationfitness,impactofregulationandpotentialredundancywithindustriesalreadyinplace,A.T.Kearneynarrowedthetargetindustriesfrom107segmentsto22segmentsinsixindustries.Theseinclude:•Communication&HighTechnology•Pharmaceuticals•Chemicals•EquipmentManufacturing/IndustrialMachinery•Aircraft•Transportation/LogisticsA.T.Kearney10/10.02/17231d_014©2002ExecutiveSummaryExecutivesummary(2)�Twoindustrieswereconsideredinaspecialway:•EquipmentManufacturing/IndustrialMachineryishighlyfragmentedandcoversmorethan100segments.A.T.KearneysuggestsfocusingonlyonthoseindustrysegmentswhereShanghai/Lingangoffersauniquevaluepropositionintheformofanestablishedecosystemfortargetindustries(e.g.Communication&High-technology,PharmaceuticalsandChemicals)•Transportation/Logisticsisseenasasupportingindustryforpotentialtargetindustries(seeabove)BothindustriesplayacrucialroleforShanghai‘sfutureecosystem,butneedtobeassessedinthecontextofthesurroundingindustrialstructure.�Thedetailedindustries-segment-specificassessmentisbas...
