When I asked a trading company employee who considers himself to be proficient in English whether he knew that the word “shanghai” is also a transitive verb in English, he said that he didn’t. In the dictionary, it says that it means, “to make senseless through drugs (or drink) and then put on a ship or kidnap (to serve as a sailor)”. I wonder whether the etymology of the word relates to incidents that happened in Shanghai, in the days when it was a port town.

Incidentally, the non-verb Shanghai (i.e. the city) is, as you know, a center for the Chinese economy to which the world is paying close attention as a “global factory” and a major market. Recently, when I participated in a study mission to Shanghai, I was surprised to see how busy the flight schedule was between Narita and Shanghai. I heard that the reason for this was the fact that passenger numbers are growing to such an extent that the airlines cannot keep up, even though they have increased the number of flights. Naturally, business is booming for hotels in Shanghai. Until only a few years ago, Southern China, centering on Guandong Province, was the focus of external liberalization policies and Japanese companies also established themselves in the area. Many of the companies that ventured into the region were from Hong Kong and Taiwan; however, the trend among Taiwanese companies is changing considerably, in favor of establishing bases in Eastern China, including Shanghai and its environs.

Although the main reason for the shift from Southern to Eastern China was down to the rapid development of the eastern region, there are other factors in the background.

According to Mainland China Investment Environment and Risks Survey (digest for 2001) compiled by Taiwan Electrical and Electronic Manufacturers’ Association, the “competitiveness ranking” of cities in China was, as can be seen below, not surprising: 1. Shanghai, 2. Beijing, 3. Guangzhou, 4. Shenzhen, 5. Tianjin, 6. Nanjing.

In addition, the ranking in terms of “investment environment analysis” was 1. Wujiang, 2. Ningbo, 3. Hangzhou, 4. Kunshan, 5. Fenghua, 6. Shanghai. Cities in Eastern China, including less well-known cities, feature high on the list, while cities in Southern China are listed lower; Guangzhou is at 33, Shenzhen is 39 and Dongguan is the lowest at 44.

Furthermore, the ranking in terms of “investment risk analysis” is as follows: 1. Wujiang, 2. Jinan (Shandong Province), 3. Fuzhou, 4. Huizhou, 5. Baoding, 6. Shijiazhuang (Hebei Province). Cities in Southern China feature towards the bottom of the list, including Guangzhou at 39, Shenzhen at 41, Zhuhai at 43 and Dongguan the lowest at 44.

This report is based on a questionnaire aimed mainly at the Taiwanese electricity industry, but other industries, which were evenly distributed, were also included. At the end, the report provides guidelines for Taiwanese companies, presenting a list of “cities recommended by this research” (Top Recommendation, Recommended, Not Recommended Now and Never Recommended). Wujiang, which attained the top ranking in terms of investment risk, has learned from the bad example set by major cities in Southern China and improved its investment environment in order to attract investment not only from companies in Taiwan, but also from other countries. Compared with the research conducted the previous year, quite a few cities gained a much higher position with regard to improvements to the risk environment thanks to efforts by the government. The research originally aimed at ensuring that, “the governments of cities in China compete to improve the investment environment actively, reduce investment risks and protect the interests of advanced enterprises”.

This is part of the background to the recent stream of foreign investment advancing from Southern to Eastern China.

[Translated by ERINA]