chapter  9
30 Pages

Producer services growth: Its impact on Shanghai as a globalizing city


Introduction The rise of the service sector and, more precisely, of advanced producer services (APS) is associated with the growth of global cities (Knox and Taylor 1995; Sassen 2001). After thirty years of reform and opening-up, China has rapidly integrated into the global economy and has risen rapidly as the greatest manufacturing power in the world. However, comparatively, the country’s industrial value chain remains quite low. To upgrade the industrial value chain, the country intends to develop producer services. With the progress of global economic integration, one specific change seen in coastal cities such as Shanghai is the emergence of producer services. According to the global city theory, global city growth can be shaped in part by producer services growth because this growth shapes both physical appearance and control and command nodes function in the global cities network (Sassen 2001). This chapter provides a brief analysis of ongoing research into producer services, and explores the possibility of Shanghai becoming a more important focus for producer service location. This advantage has shaped Shanghai from an industrial and commercial city (from 1949 to 1978) to an economic center city (from 1979 to 2009), and then into a potential global city (from 2010 to 2039). The analysis highlights the diamond model of producer services growth in Shanghai; its type, number, and convergence trends; and the impact of the development of producer services on the manufacturing sector in Shanghai.