Two Dragon Heads : Contrasting
Development Paths for Beijing and Shanghai

In broad terms, the sources of economic
growth are well understood, but relatively few countries
have succeeded in effectively harnessing this knowledge for
policy purposes so as to sustain high rates of growth over
an extended period of time. Among the ones that have done
so, China stands out. Its gross domestic product (GDP)
growth rate, which averaged almost 10 percent between 1978
and 2008, is unmatched. Even more remarkable is the
performance of China's three leading industrial
regions: the Bohai region, the Pearl River Delta, and the
Yangtze River (Changjiang) delta area. These regions have
averaged growth rates well above 11 percent since 1985.
Shanghai is the urban axis of the Yangtze River Delta's
thriving economy; Beijing is the hinge of the Bohai region.
Their performance and that of a handful of other urban
regions will determine China's economic fortunes and
innovativeness in the coming decades. The balance of this
volume is divided into five chapters. Chapter two
encapsulates the sources of China's growth and the
current and future role of urban regions in China. The case
for the continuing substantial presence of manufacturing
industry for growth and innovation in the two urban centers
is made in chapter three. Chapter four briefly examines the
economic transformation of four global cities and distills
stylized trends that can inform future development in
Beijing and Shanghai. Chapter five describes the industrial
structure of the two cities, identifies promising industrial
areas, and analyzes the resource base that would underpin
growth fueled by innovation. Finally, chapter six suggests
how strategy could be reoriented on the basis of the lessons
delineated in chapter four and the economic capabilities
presented in chapter five.