Early in 1993, in order to strengthen the trade relationship between China and Japan, and promote the joint development of foreign trade and industry between two countries, Shanghai Municipal Government registered and established Shanghai International Co., Ltd. in Tokyo; and after having gone through all hardships in the past ten years, it has become one of the largest, strongest and most remarkable comprehensive corporations among overseas enterprises of Shanghai. The volume of sales has been progressively increasing at a two digit rate per year, being increased from US$ 2,000,000 at the beginning to US$ 110,000,000 in last year. The number of employees has gone up from 4 to 24; the corporation consists of 6 departments, 3 offices, 12 invested enterprises and Shanghai offices. The registered fund has been increased by 500%; investment fund has been enlarged from US$ 5,800,000 at the beginning to US$ 44,000,000 of the total capital fund at present. The corporation, mainly located in Japan and Shanghai, successfully established and developed several joint ventures and single invested enterprises in Shanghai through importing foreign capitals and grafting state-owned enterprises (SOE), as well as transnational business and both internal and external action.

I. To Fix Position Correctly in the International Re-division

Mr. LU Binsun, Chairman of Board of Shanghai International Co., Ltd. believes that the transfer of industries, the flow of capitals and the restructure of enterprises at present are the international re-division and re-choice of brand. As overseas enterprises located in Shanghai, they must fix their positions correctly in the flow of re-division of the world economics. At the beginning of its foundation, Shanghai International Co., Ltd. put itself on this starting point, making full use of special superiorities of its own in resources, industries, information and talents, and making the Corporation have competitive power.

On dealing with business, for example, the Corporation only does business in which it can give play to its superiorities, such as business of agency financing; the Corporation becomes the supplier of transnational corporations on their purchases in all over the world; the Corporation cuts in both upper and lower industries on the OEM chain of processing industry. The Corporation has formed five parts on its business: the first one is semiconductor. Among enterprises of manufacturing electronic products in Shanghai, there are 6 to 7 ones whose elements and parts are from Japanese suppliers; up to now, 4 enterprises, including SVA NEC, Huahong NEC, Advanced Semiconductor and Jiemin Electronic Co., has entrusted the Corporation to be the agency for their business. Of theirs trust to the Corporation, many Japanese customers appoint Shanghai International Co., Ltd. to be the agency of the business. The second one is energy resource. In accordance with the development of Shanghai city and direction of industrial development, the Corporation always put a lot of stress on energy resources and important original materials, such as electrolytic copper, steel, heavy oil, natural gas, etc. In the past, copper occupied the most part of imported material in the Corporation; in recent years, steel, ore in sand form, etc. have been developed, each one is up to more than US$ 5,000,000 or 6,000,000. The third one is exported product. They are mainly sports requisites, foods and roast eels. Shells jointly manufactured by the Corporation and Zhejiang Flying Eagle Corporation have become the appointed ones on Olympic Games and Asia Games, replacing the products made in Germany, Japan, etc.. The forth one is process and service. They are mainly OEM products and products made by jointly invested branch corporation, as well as the agency of exported products and processing business. And the fifth one is patent trade mark and business. The item of right to use F1 trade mark has been started; it’s a noticeable form in modern trade. In the past ten years, the imported and exported goods handled by the Corporation in Shanghai were close to RMB 3,000,000,000 Yuan.

On the overseas investment, the Corporation, together with Shanghai industrial groups and universities, has established jointly invested enterprises in Tokyo, such as Shanghai Jinjiang Corp., Ltd., IT System Development Corp., Ltd., etc.; and, jointly investing with Shanghai Industrial Group and using technologies from Japan, established more than ten jointly invested enterprises in Shanghai, such as Shanghai SK Transformer Co., Ltd., Shanghai Misawa Medical Industry Co., Ltd., etc. On the medium service, the corporation has opened up avenues of information with financial and investment organizations in Japan, such as MIZUHO Bank, MITZUBISH Trust Bank, Shinsei Bank, MITSUI SUMITOMO Bank,KPMG, GMD, PWC, NAGASHIMA, ONO, and Changsong Law Offices, NOMURA Securities Company, Mitzubish Securities Company, etc.; the corporation also offer the service to importing foreign capitals, combining enterprises, overseas investment, contraction of projects, importing talents, trade of property, entering M&A market of Japan, etc., and has become the direct supplier for GM & GE Group of USA.,NEC, MINEBEA Corporation. In this June, the corporation successfully imported the right of using F1 trade mark to Shanghai; and, together with Malaysian Logo House Corporation which has right of using F1 trade mark in China, Shanghai Expo Group and Shanghai JIUSHI Corporation, established the jointly invested enterprise which can engage the products of F1 brand in China and special products.

Through many years, the corporation has formed the business and market structures with being equal to trade and investment as well as combining China and the world.

II. To Rely on Industrial Advantages in Shanghai and Act Together with Internal and External Parts

In the past ten years, Shanghai International Corp., Ltd. has gone through three periods of foundation, development and redevelopment. These three periods are closely related with economic development and urban construction of Shanghai.

During the first three years of the foundation of the corporation, China, with the development and the opening of Pudong as the leading pivot, was setting off another upsurge in importing foreign capitals, while Japan was regulating economic structure and transfer industries outside. Shanghai International Corp., Ltd., catching the opportunity, has imported foreign capitals US$ 1,000,000,000 in the past ten years and helped well-known enterprises of Japan (including MINEBEA, Ricoh, NEC, etc.) to set up offices in Shanghai, while has taken part in investing to some projects, such as Shanghai SK Transformer Co., Ltd. Shanghai SK Transformer Co., Ltd. has used and opened the latest technology of manufacturing transformer in R Type, and now developed a series products which have been entering all fields: electronics, communications, household electric appliances, office appliances, medical equipments, etc. Up till now, more than 70% of products have been exported to Japan, America, Europe, Hongkong, etc.; the corporation has supplied products for more than ten famous corporations in the world, such as GE, JVC, etc.; sales amount of products was increased from RMB 8,000,000 Yuan in 1993 to RMB 100,000,000 Yuan in 2003. This speed is rare in the same profession.

In the construction of Shanghai urban, Shanghai International Co., Ltd., as the outside window of Shanghai, has successfully taken the international financing for projects, such as Pudong International Airport, housing estates in Shanghai, etc.. For the construction of Pudong International Airport, the corporation, together with famous suppliers and manufacturers in the world, such as IBM, German Linde Corporation and Siemens Corporation, Japanese OKAMURA Manufacturing Corporation, etc., entered the bid for projects in large scale and won  11 international tenders and several domestic tenders; the total amount of tender for this project is up to ¥ 5,000,000,000 yen; the corporation raised ¥ 40,000,000,000 yen through financing for constructing Pudong International Airport. In the transnational business, the corporation, together with Shanghai Property Exchange, established Tokyo Property Exchange Center in order to help state-owned enterprises to enter in M&A Market and talent market; together with Talent Service Center of Organization Department of Party Committee of Shanghai, established Tokyo Talent Service Center; and, together with Shanghai Promoting Foreign Investment Center, established Tokyo Center (Branch) in Japan. Through “Three Centers”, the corporation has helped domestic enterprises to enter international capital market and international talent market.

In resent two years, Shanghai International Co., Ltd. has developed rapidly; and, supported by Shanghai industrial groups, has multiply reorganized with Shanghai Meter & Electronics Holding Group, Shanghai Industrial Investment Group and Shanghai Chemical Industry Zone Development Co., Ltd., thus making the total investment up to US$ 30,000,000. By capital reorganization, the overseas advantages of the corporation will be closely combined with industrial advantages of Shanghai, realizing mutually complementary in advantages and jointly acting both inside and outside.

III. To Set up a Long Effective System for Enterprise and Create an Image

Many foreign enterprises come to China to do business just for “Shanghai”, an important city in their eyes; it’s a tremendous intangible assets. But, if enterprises will be really merged into local political circle, enterprises and financial circle, they must set up their reputations and images with their own achievements.

The corporation has been laying stress on creating a honest image. In 1997, Shanghai International Corp., Ltd. arranged a loan US$ 50,000,000 from Japanese bank for building Chuncheng estate, one of exemplary estates of Shanghai in the 21st century; three years were allowed for the financing. While some local enterprises at home were unable to repay the debt abroad, bringing about a bad effects in the world, Shanghai International Corp., Ltd., through the sustained effort, repaid the debt to the bank wholly (including the principal and the interest) and on schedule. The Corp. won a high opinion from financial circle and enterprises because of this.

The Corp. also put stress on fostering professional dedication and the pioneering spirit among staff. Leaders of the Corp. believe that the most severe challenge comes from human resources; a core team of management must be organized and developed; and both the culture and image of the enterprise should be created by this team. As the policy makers of the Corp., they must turn strategy and purpose of the Corp. into the action and spirit of all staffs, and must create an environment of and a system of encouraging and keeping on excellent staffs. Shanghai International Corp., Ltd. has made a general principle of encouraging staffs, which is “ Local Staffs, and Local Salary”, aiming at forming a new system and inspiring talents to play a key role. At the same time, the Corp., from the angle of adding to the flourishing of itself and cohesiveness, has practiced localized management, and made the system be close to the market system and the international convention; with a farsighted view and humanized management, the Corp. has assigned jobs to talents in both Tokyo Corp. and Shanghai Branch, and employed many foreign staffs, gathering talents and tapping the talent potential to the most extent. The Corp. should find the wider opportunities of development between two resources, two markets and two cultures of both China and Japan.

The Corp. should also set up a long-effective system for creating an image; this long-effective system will improve the image of the enterprise continuously on the every stage of developing the enterprise. Shanghai International Corp., Ltd. has gone through three stages in its development; in every stage, we would pay attention to create the image of the enterprise. The first one is the creative stage. In the pioneer stage, the Corp. was in a small scale, and products were in single style. Staffs have fostered the spirit of pioneering the Corp. with arduous efforts, seeking for the survival through their services, and for the development through their pioneering spirits; they tried to deal with everything very well and to keep every business in success, and then set up confidence and reputation both inside and outside profession. The second one is the developing stage. The Corp., bringing everybody’s pioneering spirit into full play, and being on accordance with characteristics and resources of its own, has formed the core business. And the third one is the stage of speeding up the development. Relying on the connection with other corporations and the operation of capitals, as well as the enlargement of both capital and business, the Corp. will make itself up to a new step, and from this, cultivate core leaders continuously, bring about the new environment in the enterprise and set up a good image of the enterprise.