There are few more accurate measures of regional prosperity than land prices. So the report by Richard Ellis in Hong Kong showing that Shanghai has become the fifth most expensive city for office space in the world, is confirmation that it has become the most sought-after location in China.
If further proof were needed, there is no shortage of impressive news emerging from China's largest industrial centre. Just a few weeks ago a new fund management company controlled by the Ruentex group of Taiwan and the Shanghai government announced plans to raise US$100m for a fund to invest in Shanghai construction factories, warehouses and housing.
However the other side to the property price equation is an acute shortage of office space in Puxi, to the west of the river and the historical centre of the city. Despite growing 20 per cent during the first eight months of 1993, Shanghai's economy could be constrained in the future by worsening congestion and a crumbling infrastructure.
The development of Pudong ? an isolated 350 sq km expanse of land in east Shanghai across the Huangpu river ? represents an opportunity for the city to restore its industrial and commercial status. Pudong does not have a proud history, yet the wasteland, farms and outdated docks that have been allowed to decay could now be an advantage to the region. Put simply, Pudong has little worth keeping compared to the historical and relatively prosperous Puxi. The flat 1.7 sq km tract of land in the Lujiazui Finance and Trade Zone just across from the Bund is especially ripe for development. Pudong's other three zones are: Waigaoqiao, an international trade centre that allows foreign investors in China to re-export; Jinqiao Export Processing Zone; and Zhangjiang Hi-Tech Park that will be developed into a technology trade centre.
Pudong is a highly ambitious project with major repercussions for the local and national economy. The area offers special tax concessions and is drawing greater foreign investment to east Shanghai. Between January and August 1993 the area at tracted US$1.2bn of foreign investment, up 60 per cent on last years figure. There are now 1,334 foreign-funded enterprises in the New Pudong Area with contracted foreign funds of US$2.8bn, according to Shanghai's mayor, Mr Huang Ju.
The Pudong development faces an important few weeks. An architectural plan for Lujiazui is being discussed that will shape the city's skyline and working and living conditions into the next century. The city's planners have a unique chance to create a modern city that stands apart from the many drab cityscapes elsewhere in China.
Following advice from the French government, a consultation process was initiated involving architects from France, Italy, Japan and the UK. The Richard Rogers Partnership of the UK emerged as the 'favoured' architectural adviser to the Chinese planners. Their proposal, which Rogers stresses is not a blueprint but an adaptable idea, places much emphasis on energy conservation, public transport and linked neighbourhoods of office, residential and leisure space. The plan ensures maximum daylight and views for all buildings ? either of the river or the grand central park. Houses, shops and restaurants combine with office space to create "a balanced 24-hour community". All buildings are to be well-connected by tram, metro, train and a radial road network. In this way Rogers hopes that Shanghai will avoid the transportation problems experienced by many Western cities during this century, some of which are typified by the London Docklands project.
However, early adaptations by the Chinese have transformed the plan into an old-fashioned, grid-like structure with a central highway and greater emphasis on the car. Car ownership levels of less than 0.1 per cent in China are likely to escalate early next century. So it is natural for Shanghai's planners to want to build more roads, particularly as the scarcity of the car makes it such a status symbol. Forget the pollution and congestion, they seem tope saying, we want to build a city in the Western model.
Some 35 per cent of proposed land space would be taken up with roads under the revised plan, exceeding even Hong Kong and compared to just 5 per cent in London's Broadgate development. Links are being built ? the Yangpu, the city's second bridge, was opened last month ? but not an a scale that is likely to transform a transport system already creaking under the weight of traffic. Rogers' design which aims to reduce dependence on the car, proposes more links across the river including ferries, cable cars and bicycle tunnels in addition to metro and car tunnels.
Talks are entering a crucial phase with Shanghai's vice mayor Zhao Qizheng heading a large delegation to the UK in early November. But the omens are not good. Any chosen plan must negotiate around the rapid construction already taking place in the area, including Asia's tallest television tower and the 39-storey China Merchants Tower. And a lack of state finance and public debate about the redevelopment mean more influence to the already powerful property developers. Hopes of a considered and efficient solution are therefore receding and many believe that Lujiazui will fail to emulate the example of well-connected new business centres such as La Defence in Paris. *