A drive to improve the city's modern service sector over the next five years was launched by the municipality yesterday.

Chen Yin, deputy director of the Shanghai Development and Reform Commission, said the new policies would encourage the sector's role in the reform of State-owned enterprises.

He added special funds would be provided to outsource some services.

The modern service sector includes industries such as finance, logistics, commerce and trade, real estate, tourism and information services.

Chen told a press conference yesterday that the Shanghai government would try to create a fair environment to promote the development of the services.

It will encourage non-State capital to go to culture, education and healthcare fields, simplify the approval procedures for new chain stores and widen the market access of modern logistics.

"Well-educated professionals will play a key role in the drive," Chen said.

The city will set up favorable policies to attract talented people in culture, finance, logistics, shipping, information service and convention, he added.

It will also try to attract more senior executives working for multinationals and research and development institutions.

The burgeoning Pudong New Area, Chen said, will play a big role in the drive because it was given national approval in June to develop finance and High-tech sectors.

Shanghai wants to make the finance, logistics, commerce and trade, and real estate modern services sector create 60 percent of the city's service output in 2010.

Last year it made up only 47 percent of the city's gross domestic product (GDP), while the ratio in Tokyo and New York can be 60 to 70 percent.

It is even lower than the ratio of its manufacturing sector, which contributed around 50 percent to the city's GDP in 2004.

Shanghai has been well renowned as the country's manufacturing centre. Clothes, bicycles and watches made in Shanghai used to be popular. But concentrated efforts on manufacturing has drained the city's resources and seriously polluted the environment, experts pointed out.

It prompted the city to change the way its economy grows and develop those companies with high value-added output, low consumption of resources and little pollution to the environment.

(China Daily December 15, 2005)