ABSTRACT
Jiangnan rural and suburban economies modernized; but Shanghai during reforms lost markets to other Chinese areas that had lower taxes and funds to innovate. In 1980, capital for urban Shanghai’s industries had for decades been so scarce that 50 percent of the machines dated from the thirties and forties; 35 percent were from the 1950s and 1960s; and 15 percent (largely suburban) had been made in the 1970s. Demand for Shanghai brand-name products remained strong, but increasingly they were made in Sunan under “joint venture” arrangements. Shanghai technicians had long been seconded to inland places, especially in Jiangsu and Zhejiang, where many had kin; and local portions of university-educated employees were smaller than in many other cities. As late as 1989, Shanghai’s first “Silicon Valley,” Caohejing, was still announcing a list of areas in which it hoped for investment (microelectronics, information technology, optical fibers, lasers, bioengineering, aviation, and materials science), but scant state money came for these. Jiangnan inter-local cooperation with cities such as Wuxi spurred innovation that in the 2000s reached global standards.
