Shanghai Daily news

Officials in Jiading District are pushing to replace manufacturing plants in Jiangqiao Town with office buildings in an effort to increase tax revenues and employment levels.
A 3.5-square kilometer park, expected to home regional headquarters, purchasing, sales and logistic offices as well as research and development centers, is under construction on land owned by the Jiangqiao Industrial Zone, which hosts 70 factories.
According to Jin Jianzhong, the district's director, the restructuring plan aims to attract more competitive companies to raise the industrial park's production efficiency and urbanize the suburban area.
When completed in 2010, the service industry park is expected to be the largest of its kind in the country with its investment hitting 23 billion yuan (US$2.77 billion) and tax revenues reaching 6 billion yuan annually.
More than 40 companies, including the US-based National Automotive Parts Association, Japan-based Pioneer Group and Sweden-based Nestle Ag, have expressed interest in setting up offices in the park.
Moreover, eight companies signed letters of intent to open offices in the park, with combined investment of US$170 million.
The park, whose first phase covers 13.33 hectare and will be put into use next April, is composed of a business complex, a government service center, agents, advertising and art villages as well as residential communities.
Jiangqiao town is in the south of Jiading District, a comparatively barren area with vast amounts of farmland. The Jiangqiao Industrial Zone, set up in early 1990s, is a symbol of the industrialized era of the city's suburban towns.
However, in recent years when other industrial zones' tax revenues soared one after another, the district was no longer satisfied with Jiangqiao Industrial Zone's limited contribution, which is no more than 100 million yuan annually.
The district government hopes more multinational companies will head the western area and settle their branches concerned with automobile, clothing and sport industries in the wake of the city's first Formula One race in the area last September.
A convenient traffic network, which connects the area to the city's downtown, Zhejiang and Jiangsu provinces, is expected to help attract new investors.
Yin xingmin, an economics professor at Fudan University, suggests this is not the right time for suburban districts to give up manufacturing industries.
"Farmers with relatively low incomes may not be able to afford the products from advanced service industries, thus there will be a market deficiency," said Yin.
"It is a tough job for district governments to provide sufficient employees for big service companies, whose staff members are highly trained."
Furthermore, according to Yin, based on his observation, the headquarters and R&D centers that Jiangqiao Industrial Zone tries to attract also come from manufacturing industries.
Manufacturing industries dominate the city's economy by accounting for more than 50 percent of its gross domestic product in recent years.