“Develop the Leading Area and deliver new results.” It has been two years since the release of the Opinions of the CPC Central Committee and the State Council on Supporting the Pudong New Area in Building Itself into a Leading Area in Socialist Modernization through High-standard Reform and Opening-up (hereinafter referred to as the Opinions) and over the past two years, numerous large, medium-sized and small enterprises in the Pudong New Area have prospered. Professor Ruan Qingsong from the Department of Economics and Finance, Tongji SEM has recently been interviewed by the 632 Observation column of the Oriental Financial Pudong Channel to discuss the achievements of Pudong’s core industries and how to achieve higher-quality development in the future. The following is an excerpt from the interview.

Q1

Which aspect of the development achievements of the Pudong New Area’s core industries over the past two years have caught your notice in particular?

 Ruan Qingsong:  

I pay special attention to the integrated circuit industry because of how well it has developed in the Pudong New Area—not by introducing one or two enterprises, but by strengthening the entire industry chain and fostering industrial agglomeration. For example, Pudong is now home to seven of the top 10 chip design companies in the world as well as two of the world’s top five foundry companies.

Q2

The scale of the Pudong New Area’s artificial intelligence (AI) industry accounts for 40% of Shanghai’s total. The recently concluded World Artificial Intelligence Conference put a heavy emphasis on generative AI. What advantages do you think Pudong has in this regard?

 Ruan Qingsong:  

Let’s look at the core of generative AI. It is AI that uses some existing information in the form of text, image, video and audio to generate new information that is logical and effective through machine logic thinking or machine learning. This is how it is defined, and the supporting computing power, algorithms and data, particularly big data, are its fundamental components.

With this background, it is easy to understand the advantages of Pudong in this regard. First is the carrier advantage: Zhangjiang AIsland, the CAS Center for Excellence in Quantum Information and Quantum Physics and other carriers, provide Pudong with a comparatively favorable eco-environment. Second is the industry advantage: by the end of 2022, Pudong had over 600 key AI enterprises and a scaled-up AI industry worth over RMB 120 billion, with the industry showing a general trend of aggregation and driving the development. The last one is the scenario advantage: whether it’s AI or generative AI, it ultimately requires application scenarios. Pudong has scenarios, enterprises and industries for applications in education, healthcare and finance.

Q3

The Opinions mentions making full use of the Leading Area’s industry guidance fund and exploring and optimizing venture capital systems. What role do you think these measures can play in providing the real economy with financial support? What will be the challenges?

 Ruan Qingsong:  

In my view, the first role they should play is a leading role, especially in new industries and new enterprises representing the future direction, in order to enable accurate investments and effectively drive the development of the entire high-tech industry.

The second role is an incentive role. Entrepreneurs, especially those in the technology industry who hold shares, can only be encouraged with a market-oriented financial incentive mechanism, in which good returns may be attained via the capital market.

The challenges or aspects that may require our attention, in my opinion, are risk control and efficiency increase. The key to increasing efficiency lies in government guidance and market leading. Market leading should not be ignored because it is the only way for a market to be viable, sustainable, and capable of increasing efficiency.