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Business Focus Sino - German Business October - November 2008 | 12 The German Chamber of Commerce in China Just How International is Shanghai? Shanghai has been home to residents from a wide variety of cultures and ethnic backgrounds over the last 170 years. In fact, looking at the cityscape, you could say many areas were built by expatriates. Over the years, relatively accurate records have been kept on the numbers and nationalities that have called Shanghai ‘home’ - right down to the last Albanian. Yet, at no point in the last 100 years has this number been as difficult to pinpoint as today. If one thing is certain, it’s that Germans have played an important part within China’s expatriate community, particularly in Shanghai. In fact, it’s widely acknowledged that Germans and Americans outnumber all non-Asian expats. This is no surprise, when you consider that Germany is China’s largest economic and trade partner in Europe, or that many of the largest German investors in Asia are based in Shanghai. Immigration Over the Years 1865 - Out of total 2,235 international residents, 175 were German 1915 - The foreign settlement and concession area housed 20,924 foreigners – predominantly British merchants, missionaries and physicians. The number of Germans had increased to 1,425. 1925 - Census revealed there were nearly 30,000 foreign residents, consisting 3.5% of the population. While the Japanese made up the largest group, the German population was rapidly increasing. 1930 - The German expatriate community outnumbered the French, at 1,430 residents throughout the International Settlement, external roads and French Concession. 1934 - Shanghai was the world’s 6th largest city, with a foreign population of 70,000. Most were Japanese or Russian, but Germans still outnumbered the French. 1942 - Shanghai’s pre-1949 foreign population peaked at 150,931. Snapshot of a City’s Growth In the early census days, a complete breakdown of the nationalities was available. However, today the situation is no longer clear, with a number of different authorities responsible for keeping records. These include the Shanghai Municipal Labor Bureau, the Public Security Bureau as well as the various foreign Consulates. While in the 1930s foreigners required neither visas nor passports to enter Shanghai, today’s complicated requirements span a wide range of visas and residence permits. Resident Status The F visa also known as a business visa is the case which causes the most confusion. Some ‘F’ visas holders visit China strictly to conduct business for a short period of time. They stay in hotels and don’t stray much beyond the Bund, Pudong and Yuyuan Gardens. Others remain here a little longer, and extend their stay a few times until they count essentially as residents, but how many of these cases are there? How have recent visa changes affected this group? The answer is uncertain. According to the Shanghai Municipal Statistics Bureau, by late 2006, Shanghai’s total population (not including itinerant or migrant residents) had grown to 18m. According to the Municipal Labor and Security Bureau, legally registered international residents numbered Fig. 1 Japan 30% 29,326 America 13% 15,877 South Korea 12% 17,020 Singapore 6% 6,336 Germany 5% 5,636 France 4% 5,437 Canada 4% 4,572 Australia 3% 3,927 Malaysia 3% 4,097 UK 3% 3,725 Other 17% 23,923 119,876, constituting around 0.7% of the total population, and more than 50% of China’s total international population. In mid 2006, the Shanghai Municipal Labor and Social Security Bureau announced there were 51,000 foreigners working in Shanghai. (Fig.1) As these statistics reveal, ‘Western’ expatriates constituted a mere 32% of the international community in Shanghai. Regional expats from Japan, Korea, Singapore and Malaysia made up 52%. There were also a further 20,000 permit holders from Hong Kong, Taiwan and Macau listed as permanent residents. If you include those working in China without a work permit (usually living here on an F visa), estimates of the total number vary greatly and rise to as high as 600,000 but this is an impossible number to validate. Since 2004, annual increases have been between 25-35%. Apparently, the long-term goal of the Shanghai Municipal Government is to establish an international community that constitutes 5% of the city’s total population. The question, nervously being asked by expatriates and other foreign residents, is will the gates be shut once that goal is reached? Recently, a tightening of F visa regulations has been one indicator. Germany in Shanghai 1872 - C. Melchers & Co. enters Shanghai 1885 - German Consulate General built 1886 - First German business delegation in Shanghai 1914 - German School of Engineering built at the Tongji University 1929 - German Cultural Center established in Shanghai consisting of the German Community Center, the Kaiser Wilhelm School and the new German Protestant Church 1972 - Germany established official diplomatic ties with the People’s Republic of China 1984 - German Business Association is founded with 13 members 1986 - Hamburg and Shanghai become sister cities 2000 - Trade volume between Shanghai and Germany totals USD3.6 bn 2001 - China attracted direct investment from 1,600 German companies, 650 of which had set up their joint ventures or representative offices in Shanghai. Second Generation Expats The majority of Shanghai’s international population consist of the employees of multinational corporations and their families. Over the last 3 years, the number of expatriate children has risen by more than 30%, an increasing number of which were born in Shanghai and know no other home than China. As the number of children increases, so do the education resources and schools that cater to them. The German School Shanghai was
The German Chamber of Commerce in China Fig. 2 established in 1995 to cater to German students. As the largest German school in China, it is now responsible for 850 students, from kindergarten to the Abitur. (Fig.2) Becoming a World Class City So where do all these foreigners fit in to Shanghai’s plans to become a world class city? Most metropolitan, international cities have an average of 4.3% expatriate residents. According to official statistics, Shanghai’s foreign population has yet to reach even half of this figure and recent changes to visa application procedures make it difficult to predict when that figure will be reached. History reveals that Shanghai was most definitely a global city prior to WWII, particularly in the 1930s. Where does it stand today? The Globalization and World Cities Study Group and Network (GaWC) provides a categorization and ranking system of world cities. The top four cities in the world are widely acknowledged as London, New York, Paris and Tokyo. Sino - German Business In the categorization and ranking of world cities, GaWC assessed major world cities based on “advanced producer services” provided by international corporations, such as accountancy, advertising, finance and law. They defined Shanghai as a ‘minor global city’ in 1999, on par with Singapore and Hong Kong, which attracted large foreign businesses and a related expatriate community. Since then, Shanghai has become the regional and corporate headquarters for more than 500 multinational companies. In March this year, the Shanghai Personnel Bureau stated that the city now has 70,000 expatriates, with another 70,000-plus returned overseas Chinese also working in the city. While Shanghai may not be a world class city yet, it definitely has potential. The Average Expat • 67% of international residents granted work permits hold mid-level or senior management positions in foreign invested enterprises, while only 14% work for domestic firms. • 90% have university degrees. • Expatriate staff hired on the ground in China represent more than 50% of all international residents, compared with only 26% in 2005. • Over half are employed in the service sector Source: Shanghai Municipal Labor and Social Security Bureau Laura Mitchelson is Strategic Director of Amber, a Shanghaibased consultancy specializing in market and competitive intelligence and business analysis in China. Laura Mitchelson | Email: lmitchelson@amberinsights.com www.china.ahk.de 13 | October - November 2008 Business Focus
Page 1: Beijing • Guangzhou • Shanghai
Page 4 and 5: GCC Board Beijing * All-China Board
Page 6: Preface The GC Ticker is the intern
Page 9 and 10: The German Chamber of Commerce in C
Page 12 and 13: Business Focus Cover Story Planning
Page 16 and 17: Business Focus Yingkou - North Chin
Page 18 and 19: Business Focus Kunming - South Chin
Page 20: Business Focus Yangtze River - East

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