Ford's China division's recent announcement of a regional headquarters in Shanghai is merely latest indication of the growing trend of multinationals planting their regional headquarters in Pudong New Area in Shanghai.

Pudong New Area has lured more than 13,000 foreign firms from more than 100 countries and regions, with 300 coming from the world's top 500 companies, bringing together a total investment of US$25 billion.

"Headquarter economy", a new term for most Chinese, has almost turned out into a "cliche" for some experts in China.

Books on China's "headquarter economy" made their debut last Sunday, rating 35 major cities in China in accordance with their capability and potentiality to spur headquarter economy development.

Beijing, Shanghai and Guangzhou are sitting at the first three seats. Multinationals are the major force pushing forward China's headquarter economy.

Kang Huijun, deputy head of the Pudong New Area, said that many multinationals have intended to move their regional headquarters to Shanghai, and some even planned to upgrade their China headquarters into Asia headquarters.

Researcher Chen Wei, with the Pudong reform and development institute, said that the headquarter economy has boomed in China, which reflects the strategy of escalation of those multinationals who already have footholds in China.

Many people doubted the wisdom of Alcatel's move of its Asia headquarters from Japan to China five years ago, or when set up its third global research and development center in Shanghai.

More than 3,000 researchers from 16 countries and regions are now working together at the center to develop the 3G technology.

Kodak, Dupont, and many other multinationals have moved their Asia headquarters to China.

Thomas Connelly, senior vice president of Dupont, said as the third research and development center outside the United States, the Dupont China R&D center targets the Asian market and is the major component of Dupont global research and development.

Kang has an ambitious plan for Pudong. In the coming five years, Pudong aims to attract 15 to 20 multinationals to set their headquarters there, and lure a total of 150 multinationals in 2010.

Other Chinese metropolises, including Shenzhen, Chengdu, Hangzhou, Tianjin, Nanjing, Qingdao and Wuhan, have also shown potential in developing a headquarter economy.

(Xinhua News Agency December 7, 2005)