Shanghai, the New Capital of the World

The Huangpu River winds its way through the heart of the world’s largest port and coming economic superpower. Welcome to Shanghai.

The spring wind is harsh this year, but we are greeted by joy and faith in the future as we cross the Garden Bridge on our way to The Bund – Shanghai’s famous promenade near Huangpu river. Numerous Chinese couples have chosen this particular spot for taking their wedding pictures, with the city’s famous skyline as a backdrop. The cold spring wind sweeping across Shanghai during Network’s visit to the city puts no damper on the happiness of the young, enamoured couples – whether they are taking their wedding pictures or sitting in some secluded area of the park just below the level of the promenade. 

The Next Superpower

In terms of the world economic situation, China is also just about ready to burst forth in full bloom and assume the role of the world’s greatest economic superpower. The U.S. is currently at the top of that podium, but China is shortening the gap as the number 2 nation and the experts believe that it is just a matter of few years before China will attain the top position.

To be sure, the rate of China's growth has recently not been quite as rapid as before, but we are still witnessing a China “on the go” that is flexing its economic muscles. When the country presented its latest figures for gross domestic product earlier this spring, they indicated a growth that far surpasses that of both the U.S. and Europe. In this sense, China is serving as the locomotive in the world economy.

Shanghai is China’s second largest city with a population of more than 9.3 million citizens, and we are referring to the city core! If you include the entire Shanghai Province, the population increases to an incredible 23 million people. The city also has the world’s largest port with an enormous amount of shipping traffic along the 97 km long and grey Huangpu river that winds its way through the city.

This is the city that is being described by experts as the “city of the future”. It is a fascinating sight to sit high up in one of the skyscrapers along the river’s edge and observe the bustling life down on the 400-meter wide river that divides Shanghai into two “city sections”, Pudong and Puxi. One boat after the other passes by both night and day – in all sizes and types of vessel. It is like a gigantic artery into the heart of the world’s coming economic superpower.

A World of International Business

An ever-increasing number of international companies find it necessary to establish a presence at its heart, assuming that they have not already done so. One of these companies is the law firm Wikborg Rein, Norway’s largest and most international law firm with offices in many cities worldwide. Wikborg Rein has been represented in Shanghai since 2002, and the firm has been present in Asia for 47 years.

2012 1 shanghai2 Wikborg Rein partner Geir Sviggum (35 years old) directs WR’s office in Shanghai. He has been here for four years. Sviggum remembers his first impressions well, when he was introduced to this world city and his new home in 2008. “I experienced a rush of feelings. Everything is so terribly enormous; you can easily feel “lost”, and your first time here can seem downright chaotic. You’ re a bit like a fish out of water in all respects, also in professional terms”, Sviggum tells Network.

“But at the same time the city is terribly exciting and dynamic,” he adds. Sviggum shares the conviction of the experts that Shanghai is the city of the future, and that the city will be the “capital of the world” in a few years. “New York was the capital of the 20th century, but that role will be assumed by Shanghai in the 21st century. It is increasingly studied and in tune with the times. It will likely be sometime in the 2020s that China will assume the position as the world’s greatest economic superpower, and Shanghai will be the key city in this respect. The city’s management has specific plans for making it an international hub within many different segments such as finance and maritime operations,” says the WR lawyer.

Together with a group of 15 Norwegian, Chinese, Danish and American lawyer colleagues at Wikborg Rein’s Shanghai office, Sviggum is among those who are helping to facilitate the establishment of international operations in China. Everyone wants to get established in China, to be ready and well-positioned when the country reaches its peak as the world’s leading economy. And that is no easy task – in a country known for its need for control and all-consuming bureaucracy.

If you have a look at the world Bank’s “ease of doing business index”, you will see that China does not do particularly well. This list indicates which countries in the world are the easiest in which to do business – in terms of laws and regulations for doing business in the assessed country. The absolutely easiest country in which to do business is Singapore, followed by Hong Kong and New Zealand. China is down at 91st place this year among the 183 assessed countries. In 2011 China was in 79th place which means that according to the world Bank’s index, it is more difficult to do business in China now than it used to be. But that does not mean that international companies will be deterred – they are swarming to China. This is where the money and the future are.

Profitable, But Not Easy

“Countries in which it is easy to do business certainly attract international operations,” says Sviggum. “This is why you find Asia’s largest hub of Norwegians in Singapore. China breaks this pattern. Although the country is number 91 on the list of where it is easiest to do business, they are number 2 on the list of countries that receive the largest portions of international investments. The investments are coming because the opportunities are so wide-ranging; not necessarily because it is a simple process," he comments.

"According to figures published by China Daily, over 70 per cent of the multinational corporations that are established in China have greater profits here than in any of the other places where they are present. China is now also taking rapid steps towards a lifting of controls on their currency (RMB) and the possibility of trading it across international borders. This lays the groundwork for Shanghai as a financial centre in the coming decades,” the lawyer adds.

Many large companies also choose to send their coming managers to China for “training”, (including Ikea and British Petroleum), based on the following thesis: If you can succeed in China, you can succeed anywhere in the world. Geir Sviggum describes the environment in Shanghai as youthful and exciting. Three of the Nordic banks that have been established in the city have, for example, been managed by directors in their 30s until recently.

Amazingly Dynamic

“Like most Norwegians, my wife and I love skiing, being close to nature and similar common Norwegian qualities. You won’t find any of that in Shanghai, but the upside that compensates for it are the amazing dynamics the city has to offer. All the Norwegians living here have been uprooted from a somewhat ‘fixed’ existence, and the environment is becoming very exciting. Here, your time is constantly being influenced by work. We encounter very young people in top positions here in China, and many foreigners use Shanghai as a launching pad for their careers,” says Sviggum. He has settled in nicely in the world city; he often bikes to work and explores the region together with his family during his leisure time.

“Through work I have travelled extensively throughout China and visited 21 of the country’s 34 provinces. Beyond that, my wife and I have travelled a whole lot throughout Asia during the past four years. East of Central Asia, the only place we haven’t been is Bangladesh, and the list of countries we have already visited includes such exciting destinations as North Korea, Nepal, Bhutan, East Timor, Burma and Brunei,” says Geir Sviggum.

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“What will you miss when you eventually leave Shanghai?
“Lots. The people, the light that appears at six o’clock every morning, the warm summers and the extremely international and dynamic environment you are immersed in while living down here”.

Optimistic and Proud

“What is your impression of the average Chinese person? Is he/she happy?“ Network asks the lawyer. 

"I have gradually made a large number of Chinese friends, and they are all characterised on the whole by a considerable optimism for the future. Young Chinese people have the opportunity to live a totally different life than their parents. In a survey in Norway, in which the question was whether the respondents believed that tomorrow would be better than today, 95 per cent answered ‘No’. While large parts of Europe and the developed world are characterised by resignation and pessimism, you will encounter an optimistic underdog mentality in China. This mood is mixed with a feeling of national pride that China is on its way back to the position of being a major superpower, which had distinguished the country during hundreds of years,” Sviggum tells us.

On the way back from the stroll along the Bund, dusk has begun to settle in and the skyscrapers have turned on their fascinating orgies of light designs across their facades. The city appears – if possible – even more futuristic in the evening darkness than it did in daylight. But when the clock strikes 11 PM, the lights are turned off in Shanghai. Wisely enough, Chinese authorities have implemented a series of measures aimed at making amends for the country’s runaway energy needs. These include restrictions on outdoor lighting on buildings. We hear youthful laughter from the park where we passed a couple of sweethearts earlier in the afternoon. The future is looking bright in Shanghai.

1. Dec. 2012