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Press Release for November 20, 2018 Media Briefing by the Shanghai Municipal People’s Government

November 21, 2018

The Information Office of Shanghai Municipality held a press conference today (November 20) during which Chen Mingbo, director of the Shanghai Commission of Economy and Information Technology, introduced latest government opinions on the improvement of allocation of resources to promote quality industrial development. Xu Yisong, director of the Shanghai Planning, Land and Resources Administration, also briefed the media about  a series of policies that the watchdog is launching to raise land use efficiency around the city. Wu Jincheng, deputy director of the Shanghai Commission of Economy and Information Technology, Cen Fukang, deputy director of the Shanghai Planning, Land and Resources Administration and Qiu Wenjin, vice inspector of the Shanghai Development and Reform Commission, also joined them at the conference to take questions from the media.

I Several opinions on the improvement of allocation of resources to promote quality industrial development.

Since the fourth plenary session of the 11th CPC Shanghai Committee, the city’s Party secretary Li Qiang has been making emphasis  in various occasions that Shanghai should focus on four areas, namely the land yield, economic returns, energy consumption and the environment, to guide the city’s next round of economic development. And the latest opinions on the improvement of allocation of resources to promote quality industrial development, which include 20 measures classified into seven parts, are the detailed measures worked out to implement the future economic development plan.

First, to plan with a big picture in mind and form a new direction for high quality economic development.

To put the city’s high quality economic development in a big picture of new development concepts and serving the national development, Shanghai should stick to its efforts to deepen the reforms in working out new strategies and mechanisms. That is particularly important for Shanghai because the city has started its structural upgrading earlier than its counterparts around the country which has provided it with more advantages. Out of all, with very limited industrial resources, Shanghai must focus on the improvement of allocation of resources to boost its industrial development, mainly through digging deep into its existing capacities and improving the quality of development. 

Taking these into consideration, Shanghai is now focusing on three areas to seek a new growth model. First, to draft a masterplan, set up unified standards and optimize strategic direction and entry threshold to clarify the basic connotation and requirement of high-quality industrial development. Second, to set up models in key areas and promote the self-upgrading of scattered industrial lands to boost reforms involving various entities and in various forms. Third, to establish standards for the assessment of resource utilization efficiency and ensure support through differentiated land, fiscal and financial policies to make sure key element resources are gathered for the real economy and the city’s business environment gets further improved.   

Second, to strengthen overall planning of industries and promote the clustering of industrial brands unique to certain areas.

In order to form a new industrial development system which mainly composes of modern service industry with emerging industries of strategic importance taking a leadership and advanced manufacturing industries offering a firm support, Shanghai has to optimize its overall industrial resources to facilitate its high-quality economic development. On November 7, Shanghai formally launched its maps for industrial development which have covered the complete first, second and third industries. A total of 101 maps, spanning 16 districts, 67 key areas and 27 major industries, have been released. 

Notably, focusing on the needs of national strategy, strengthening masterplanning of cutting-edge technologies and core industries and seeking breakthrough of bottlenecks are the key issues in accelerating the city’s industrialization process. For instance, the city will improve its planning in strategic industries such as new generation technologies, civil aviation and biomedicine and join global alliances and competition on behalf of the country. Moreover, based on the released maps for industrial development, Shanghai will promote the development of leading industries in certain districts and key areas, which include integrated circuit and shipping trade in Pudong, auto in Jiading, intelligent manufacturing equipment in Songjiang, etc, with an aim to raise the collective strength and profile of the city’s industrial development.

Third, to focus on quality allocation of resources and realize performance orientation through institutional innovation.

The Opinions aim to establish a policy system that can facilitate industrial growth of high quality through four parts, namely “evaluation, allocation, management and guidance.” The first is to create an evaluation system to gauge the efficiency of using resources. The city is to make clear the principle of evaluation while the districts are to map out detailed measures. The classification of high-performance land and low-performance land should be based on core measurement including energy consumption, production efficiency, technological innovation and pollution. The second is to implement an allocation system that can differentiate. The policies should help to accelerate transformation and facilitate quality growth through differentiated ways in market access, technological transformation, electricity price and environmental protection. The third is to strengthen the management of industrial lifecycle. Shanghai is to strictly carry out market access of industrial projects and enhance the supervision of industrial transformation and its dynamic evaluation with the implementation of a negative list with higher standard of the national requirement. The fourth is to set up a guidance system to point out the direction of a high quality growth. For a particular industry, the city will release a targeted guidance for growth, while strengthen the evaluation, supervision and services for industrial parks.

Fourth, to provide space for new development with multiple-level efforts, and raise efficiency of space and quality of growth.

To push forward an overall transformation of Shanghai’s industrial economy, the city must set apart new space for development. Shanghai has been making great efforts in industrial restructuring in recent years. There were 2,600 related projects during 2016 and 2017, which created space for new growth. But there still exist many challenges if the city expects to create more space for the development of emerging industries. At the same time, the reform has come into so deep a level that the authorities have to be strong enough to push forward it. In order to set apart more space, Shanghai must be smart on its approaches, respecting the market rules and using ways of both stimulus and punishment to eliminate backward production capacity and revitalize existing land parcels. There are three main approaches: the first is to retrieve land parcels and prepare them for industrial projects of higher quality; the second is to encourage market transfer and allow resources to move to enterprises of high efficiency from those with low efficiency; the third is to promote self-transformation that leads to technological upgrading in automation and environmental protection. The “27 opinions for the growth private economy” also encourage self-transformation of prominent enterprises.

Fifth, to target at increasing economic density and optimize industrial capacity and core competitiveness

To increase economic density, Shanghai must set up an economic system integrating industrial chain and innovation chain based on resources allocation, industrial innovation, space efficiency, efficient growth and policy facilitation; In particular, the good land is for good industries, and good resources are for growth of high quality. The Opinions also make it clear that Shanghai is to implement the strategy of “3+5+X” with the establishment of a city-level mechanism to manage and guide resources to concentrate on quality enterprises and products, and accelerate the construction of new industrial zones that have higher production, more innovation and bigger economic output.

On growth model, Shanghai will introduce higher-end industries and projects of higher quality to these zones, especially in Wujing, Gaoqiao, Nanda, Wusong and Taopu which are key areas for transformation. The focus will be leading companies in industries that gather innovative resources and have big space for further growth, such as smart hardware, artificial intelligence, Internet of Vehicles and health services. The city will support areas like Jinshan No 2 Industrial Zone and Xinghuo Development Zone to grow into model zones for self-transformation. On policy facilitation, Shanghai also explores some innovative ways, such as mixed land use and retrieval with construction after integrating technological, industrial and land reforms.

Besides, Shanghai is accelerating the making of an evaluation system to gauge the efficiency of resource consumption, the 2018 guidance of land use, and a new version of negative list for industrial transformation. All of them are expected to be released within this year as complemented documents for the Opinions.

II Suggestions on quality use of Shanghai’s land resources

On November 16, 2018, Shanghai Municipal People’s Government officially issued “Suggestions on quality use of Shanghai’s land resources”, “policies about quality use of land resources” for short. This is to carry out the requirement of quality development made by the central government, the directive given by President Xi Jinping during his visit in Shanghai, the plan of Shanghai to realize the construction of “five centers”, improve the city function level and core competence, as well as the overall planning of “Shanghai 2035”. The land policies will guide the use and management of Shanghai’s land resources in the next years.

One: The background and the policy-making process

In 2014, Shanghai introduced a series of policies about the conservation and intensive utilization of land resources. With the combined efforts of the whole city, the policies have taken effect, effectively ensuring the development need of Shanghai’s economy and society. Since entering the new era, faced with new requirement and new orientation, Shanghai is still harassed by problems such as the land supply and demand conflict, under-qualified use of land resources shown in aspects like insufficiency of land usage intensity, incoordination of land distribution, imbalance of land usage efficiency and so on.

As for these problems, party secretary Li Qiang repeatedly required to accelerate the formulation of policies about quality usage of land resources with the highest standard. Mayor Ying Yong made it definite that Shanghai must adopt policies about quality usage of land resources that are more intensive, more efficient and more sustainable. After the comprehensive collecting of opinions from every district and some industrial parks and enterprises, policies about quality usage of land resources got formulated in the end.

Two: Main considerations around the policies

“Policies about quality use of land resources” was made on the basis of Shanghai’s land status. The policies give consideration to both high quality development and high quality life. Adhering to the principle of “four real heroes” proposed by Party Secretary Li Qiang, focusing on the common development of private companies, foreign-owned enterprises and state-owned enterprises, ensuring the development of advanced manufacturing, the policies strive to build up high quality development space that matches honor of being the global brilliant city; meanwhile, the policies carry out new development ideas, adhere to the coordination among production, life and ecological space, perfect the city function, make up for deficiencies in public service facilities, ensuring community-level public service facilities can be reached by residents within 15 minutes and strive to build the most attractive high quality life space.

As for the policy orientation, Shanghai adheres to set strict requirements, choosing the brilliant cities globally whose space layout is more than balanced as its benchmark and the highest standard in land usage efficiency. As for the implement, the policies make overall planning of the land resources and focus on “making full use of the existent land resources and driving the development based on quality improvement”. The policies rely on perfecting the existent land distribution to expand the supply of quality resources, raise the distribution efficiency of land resources, improve land usage efficiency, promote the formation of new development momentum and comprehensively improve the land’s carrying capacity and output efficiency.

Three: Main content of the policies

1.To support the development of real economy and serve the common development of private companies, foreign-owned enterprises and state-owned enterprises, policies about high quality land supply, the improvement of output efficiency of occupied land resources and space layout planning got formulated. The first is about industrial land supply, including five parts, namely, the land supply mode of total factor and standard selling, the land usage mode of flexible selling term and selling after lease, the land usage price based on management and production efficiency, the full life circle land use efficiency evaluation and exit mechanism, and different policies for different kind of companies. The second is about improving the output efficiency of occupied land resources, also including five measures, namely, taking back, transforming, raising the capacity, conserving and selling and exiting low efficiency land usage. Further innovate in interest balance mechanism, enrich the improvement policies, motivate parties’ enthusiasm, establish exit mechanism of low efficiency land usage, lead land resources to proper allocation and squeeze more space from the occupied land resources.

The third is Shanghai will implement a comprehensive development intensity strategy. According to the principle of capacity control, structural optimization, classification and guidance and protection of industrial demand, Shanghai will implement controls to manage development intensity based on stratification and districts, in order to maintain reasonable development intensity and improve urban space quality. For industrial land, the development intensity will be verified based on industrial demand. At the same time, industrial building plan review and full life cycle supervision will be strengthened to improve the urban economic density.

2. In the aspect of ensuring ecological space and coordination of production, living and ecological functions, Shanghai has studied and formulated policy measures covering the entire land resources.

First, Shanghai will coordinate the three major spaces of ecology, agriculture and urban areas and expand the ecological space. By 2035, the land plots designated for ecological purpose should exceed 60 percent of the city’s overall land area. Also by 2035, 1.5 million mu of farm land will be maintained in the city in order to ensure agricultural space. The total land area allocated for construction will be limited to 3,200 square kilometers to optimize urban space.

Second, Shanghai will implement four control lines. The city will establish four control lines for the global ecological protection red line, permanent basic farmland protection red line, urban development boundary and cultural protection control line. Shanghai will strengthen land use control and space control, optimize urban and rural construction land use structure and improve urban comprehensive carrying capacity.

Third, Shanghai will increase the intensity of reduction. In combination with the five violations of four must ecological construction and industrial restructuring, efforts should be made to promote the reduction of construction land outside the development boundary and to promote the optimization of urban space while promoting ecological construction.

3. A series of policy measures have been proposed to ensure that community-level public service facilities can be reached by residents within 15 minutes. The city will overcome the shortcomings of public service facilities and create the most attractive high-quality living space.

First, Shanghai will improve the implementation mechanism of urban renewal, focus on implementing public elements and overcoming shortcomings of public facilities, as well as classify and guide the implementation of various functional areas such as public activity center areas, historical building areas, surrounding areas of rail transit stations and old residential areas.

Second, Shanghai will promote the transformation of old districts and urban villages, as well as protect the historical features and support the transformation of old districts in the central area of the city through land protection, such as bidding, directional listing and combined transfer. The city will focus on strengthening regional functions, infrastructure and public service facilities and carry out transformation of urban villages.

Third, Shanghai will efficiently allocate rural land resources. The city will implement rural revitalization strategy, optimize and adjust the layout of village land, implement comprehensive ecological restoration, improve the quality of rural space and pilot the new Jiangnan pastoral.

Fourth, Shanghai will coordinate the development of policy on intensity and adhere to the intensity for space, space to promote quality. The city will increase the intensity of development and then move out the land used to increase public space, greening and service facilities.

IV Relevant supporting documents

The high-quality land use policy is not just a document but a policy system. While researching and formulating several opinions, Shanghai has also formulated 20 supporting policy documents and actions for the implementation of high-quality industrial land use rules, plot ratio management implementation rules, rural revitalization planning land policy and low-efficiency land withdrawal action plan, in order to support the implementation of high-quality land use policy.