Ye Jia-an: Productive Service Will Definitely Be More Mature

If one day, America does not represent the wholeworld, and China’s GDP per person rises from $3000 to $10000, then China willrepresent the world, and Shanghai will become world financial center andnational financial center.   

Reporter：Xiang Huilian

Reporter: What isthe reason in your opinion that causes productive service regularly gathers inbig cities?

Ye Jiaan:Productive service is different from industry and service. Industry can bedeveloped in small cities such as Kunshan, Jiaqing, etc., because their maintask is production, and then is the transportation issue. Service needs to bescattered around because its service object are people and people scatter around.In many small cities, industry develops, and thus gathering labor, andtherefore there comes service because of people，yet high-level and diversified services arestill gathered in big cities.

A complete citysystem is necessary which means harmonious existence of large, middle and smallsize cities. Some people ask whether we can scatter productive service in smallcities, they ignore that an important part of productive service isinterpersonal interaction. We can make phone calls or send emails, but it isafter all not as convenient as face-to-face communication. It is even more sowhen we discuss about large amount of files because it is definitely moreconvenient to have conversation across the street than taking an hour bus. Wecan always see that people coming and going in London, New York and Tokyo, andthe value of central business region just lies in enhancing inter-officecommunication.

Wall Street inAmerica, Fleet Street in UK and Central in Hongkong all form their ownintegration system. To practice productive service needs to build interpersonalnetwork, yet it cannot be accomplished through virtual space. People think thatif nowadays, network is so convenient, why not work and study at home. However,are there many people actually doing these in reality? People need workingatmosphere, and virtual world is very different from realistic world. Generallyspeaking, only 10% people work at home, while others all go downtown. Thelocation of office is very important, and it is also the reason why productiveservice cannot be scattered around. Urban development must be more and morecentralized. 

Reporter: Development of industry and service is the precondition ofproductive service, what are its characteristics in China? How do you think oflocation issue of productive service?

Ye Jiaan: In UK,industrialization is achieved after the industrial revolution. The industrialrevolution happened in cities, and attracted many people to cities. Thenindustry is gradually replaced by service, yet basic of cities is stillindustrialization. In China, urbanization is different from that of foreigncountries. During open and reform in 1978, Fei Xiaotong put forward “do notleave homeland”, trying to support township enterprises. Many industriesdevelop well in the countryside and small towns, which is urbanization ofcountry side, or integration of urban and rural areas. Manufacturing industrygathers people, and service naturally develops. However, people later findsthat environment of countryside and town is not good for enterprises, andtherefore moves enterprises to small cities, then to middle cities, and last tobig cities. Countryside has already finished the historical task oftransfer.  

Our industry andservice are all rather developed, why can’t our productive service keep in pacewith them? Research shows that productive service gradually integrates and atlast gathers in big cities. In the 1980s, places such as Kunshan, Suzhou, etc.Have set up economic technique development zone and asked the country for landin order to build business center, yet how many of them have succeeded? Earlythis century, we find that many resources are wasted and many lands areoccupied, yet there are few people on those sites. Therefore, we need toconsider about location issue. To develop industry needs to comprehensivelyconsider factors including land, capital, transportation, etc., as well asrural places mean high transportation cost and low profit. At the same time, wehave many lands but not so many industries because demand in both China andabroad is fixed and therefore industry cannot endlessly expand. Service isclosely related to people, yet there is certain percentage as well and cannotexceed. Industry, service and productive service all have limitations andcannot endlessly expand.

Reporter: What function does history play in Shanghai’s productiveservice development? Is there anything of Shanghai’s development that can belearnt by other cities?

Ye Jiaan: Shanghaiopened and developed Pudong in 1991, and at that time productive service didnot start yet. Shanghai had a foreseeing view: We want be an international cityagain through planning. I mentioned in an article written in 1996 that Shanghaihas already been an international city in early Republic of China, and at thattime all prosperous things were gathering in Shanghai while Hongkong was only asmall fishing village then. Shanghai enjoys rich history background, and isburned with history duty as well. Pudong tried to become an internationalagain, which first needs sufficient office buildings. Then there were foreignscholars thinking that it was unreasonable because too many empty offices wouldcause waste of resources, yet it was already very hard to find house in Pudongin 2003. If Pudong did not have such leading plan, productive service such asfinancing would lag behind.

Other cities wantto learn from Pudong, yet some fail. There are some things in Shanghai thatother cities may lack because Shanghai has specific history background. Itstudies London, Hongkong, Tokyo and Singapore to make plans in advance.However, there are risks of planning in advance, because if productive servicefails to keep up, it is not good. Luckily, China is a country full of miracles.Now cities like Shenzhen are undergoing similar development as well, and weneed to draw a questionmark about that and wait for answers from practice.

Reporter：How is theprospect of productive service development? What are the pushing factors?

Ye Jiaan:Productive service will definitely be more mature. Industry is more and moredeveloped, and thus requiring more on productive service. Issues such asfinance, law, accounting, research, public relationship, etc. are all hottopics in our time, of which conference and exhibition is an important industrythat does well in promotion. With increase of industries, services andfactories, there will be more services provided by productive service, andsupply will also be larger with increase of demand. 

Pushing power ofproductive service is industry and service. On one hand, demand of industrycomes from overseas because we need to sell product overseas and should providebetter services such as transportation. On the other hand, we need to developdomestic demand as well. In the 1990s, Shanghai’s GDP per person is only $1000to $1500, while now it nearly reaches $15000, and basic need is usually $5000per year, and therefore remaining income stirs increase of consumption and thuspromotes the domestic market. The higher personal income goes, the moreimportant domestic demand is. When there are many factories, they need to findproductive service, and thus form industry chain: industry promotes productiveservice and productive service is related with GDP per person. Productiveservice will continuously increase according to economic regularity and globaltrend.  

Reporter: What will be Shanghai like after 10 years?

Ye Jiaan: Shanghaimay become world financial center. Now, it is financial center of China, andmain obstacle comes from lack of floating of China’s foreign exchange market,and cannot gain foreign investment as a result, yet Shanghai is alreadyexcellent as center of national productive service.

It is hard to givedefinition of world. Is America the world? New York is world financial center,and America is very strong and provides large capital. Nowadays, America is thestrongest economic body in the world, and China still cannot compete with itnow. If one day, America does notrepresent the whole world, and China’s GDP per person rises from $3000 to$10000, then China will represent the world, and Shanghai will become worldfinancial center and national financial center.   

We are now used to a rapid development mode, but miracle is not foreverthere. We can take more time, and do not mind slowing down because it does nogood of developing too fast. From 1978 till now, China’s GDP increase has hitthree-digit, yet land utilization rate, urban planning and infrastructure alllag behind. Such problem has already been found in early 2000. It is all rightfor Shanghai to develop at current speed, and it does not have to pursue 100%increase.

Introduction of Ye Jiaan:

Expert in geography information science, urbanplanning, urban geography, graduated from department of geography and geologyof Hongkong University in 1974, professor in Urban Planning and EnvironmentAdministration Research Center, dean of research college, director of GeographyInformation System Research Center of Hongkong University, director ofTransportation Research Institute, elected academician of Chinese Academy ofSciences in 2003, first Hongkong academician in Geography Department of ChineseAcademy of Sciences, elected academician of Third World Academy of Sciences in2010