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eventually supplant Hong Kong and Singapore as the most important business hub in the Far East.
COMPETITIVE ADVANTAGE Teresa Yuen is general manager of travel management company Swire Travel China, part of the Globalstar network. She says the impact of the zone will “spread beyond the city itself” and would “further strengthen Shanghai’s competitive advantage in attracting large corporations compared to other large mainland cities”. She adds: “Competition between Shanghai, Hong Kong and Singapore will no doubt heat up when the FTZ matures.” Kim Ran Frost Fuglsang, ATPI’s regional managing director for Singapore, Hong Kong and Shanghai, agrees about the potential impact of the development: “Corruption is being dealt with by the authorities with a firm hand, which will reinforce the city’s image as a reliable and stable place to do business.” But the Association of Corporate
Travel Executives’ (ACTE) Asia regional director Benson Tang believes it may take some time before the FTZ really takes off. He adds: “This free trade zone is still a piece of undeveloped land, just like the Pudong area of Shanghai 20 years ago, which was just a marshland with no development. In the short-term, the zone might not be a big challenge to well-established international financial hubs such as Hong Kong or Singapore.”
Like all China’s major cities, Shanghai is undergoing a constant renewal of its already impressive infrastructure. The historic Puxi area west of the Huangpu river – opposite the iconic Pudong skyline – is set to become more of a hub for business
Lik
Shan renew infras west
If the Shanghai experiment goes well, the impact on business travel to China is likely to be significant
travellers with new developments such as the Kerry Centre with its offices and high-end shops, as well as the extensive conference facilities in the neighbouring 60-floor Shangri- La Jing’an (see Reviews, p 117). Other plans include the reconstruction and expansion of the World Expo site and the continued upgrading of the main international airport.
REAPING BENEFITS Will buyers have to pay higher hotel rates with the anticipated rise in corporate travellers? Yates Fei, general manager for HRG China, thinks that although the hotel industry “will reap benefits”, rates are likely to “remain extremely competitive” due to the continued opening of new properties. Cultural differences and the etiquette of doing business in China can also become a significant hurdle for businesses looking to move into the world’s most populated country. ACTE’s Benson Tang organises events for global travel managers to understand the “complexity” of doing business in China. “Unless travel managers are really experienced and learn locally with us, they can’t understand the market well enough,” says Tang. “Don’t underestimate the complexity in China. Something very simple in your country, can be so different and complicated in China – such as credit cards, where the limits are very small due to foreign exchange restrictions. “Any little error or mistake can be a huge issue in China, and the company’s director can be put into jail easily.”
This is why doing business in China always carries risk – projects such as the free trade zone could disappear with one bureaucratic edict from Beijing. You can see it in the way the city’s parks are arranged – sub-divided into lots of little sections to prevent any chance of hundreds of people gathering together. Even in a cosmopolitan hub, such as Shanghai, there is a palpable sense of state control.
TRADING WITH CHINA
THE IMPORTANCE OF CHINA as a trading partner with the UK has been illustrated by Prime Minister David Cameron, Chancellor George Osborne and London Mayor Boris Johnson all making trade visits to China last year. Cameron even delayed Osborne’s autumn statement by one day to allow him to go to China. Meanwhile, Transport
Minister Patrick McLoughlin
is due to start negotiations in early 2014 on increasing the number of UK-China flights under the bilateral agreement, which currently limits each country’s airlines to a total of 31 return flights per week. Currently, British Airways
and Virgin Atlantic fly daily to Shanghai, while BA also has a daily service to Beijing and started a new route in September 2013 to Chengdu, the capital of the
south-western province of Sichuan – but nobody thinks this is enough to drive a successful relationship with China. Obtaining visas to China
remains a major problem with business travellers forced to fill in a convoluted form. Esther Jones, senior team leader at FCM Travel Solutions, says: “Visas take a minimum of three to four days, so this means that no late travel can be booked.”
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