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Utilising Foreign Investment for Renovation of the Shack Area in Shanghai

Liu Yan Ping

05 / 2001

In the south-east of the ’Dapuqiao Area’ in Shanghai, there is a group of new high-storied block tower which is magnificent and elegant. It is well-known Haihua Garden and Haixing Plaza in Shanghai.

Since 1990, there were a group of simple slum dwellers in this area, it was one of the poorest areas in Shanghai, called ’Xiesan Area’. This area, from Xujiahui Road in the north to Yuntong Dyeing Factory in the south, from Dapu Road in the east to Rihui Dong Road in the west, has a total area of 3.49 hectares, 1300 households, about 30000 persons and 26 factories. The crowded slum-dwellers were close to ’three wastes generation’ factories and located beside the whole-year-smelled Rihui River. The condition and environment were extremely terrible in this area. It was listed in one of the 23 Shanghai old areas for renovation. The problem is needed the funds for renovation, where would the funds come from?

Luwan District Government took the lead in using batch leasing of land and attracting foreign investment for renovation in old areas. On January 25, 1992, Shanghai Haihua Real Estate Co. Ltd.which was jointly invested by Zhongcheng Group, Hongkong-China Overseas Construction Engineering Co., Ltd. and Shanghai Huahai Science & Technology Company, obtained the right to use the land for first phase renovation for seventy years by US 1 million dollars. It became the first blank land for leasing in Shanghai. The Haihua Real Estate Co., Ltd. made a total investment RMB 263.52 million yuan on this land to develop and build up Haihua Garden. 90 per cent of the funds was from overseas. The work for demolition and removal started in August 1992. On October 30, 1992, the Haihua Garden broke the ground for construction.

At the same time, the second phase of ’Xiesan Area’ renovation - the construction of Haixing Plaza - took the same way. On August 26, 1992, Shanghai Haixing Real Estate Co., Ltd., which was jointly established by Luwan District Housing Construction Development Company General and Hongkong-China Overseas Development Co., Ltd., got the right to use the 0.92 hectares land for 50 years with a total investment US 43.88 million dollars. Nearly 300 residential families have been finished removal less than one year,. On August 8, 1993, Haixing Plaza also started to break the ground for construction.

Under constructors’ hard work during day and night, the old face of ’Xiesan Area’ was completely changed to a brand-new metropolis area. Only taking more than two years, Haihua Garden was finished its construction on May 9, 1995. Haihua Garden included four 31-storied residential buildings, 3-storied business group buildings with a total building area 92,374 square meters. There are 13,000 square meters green grass garden and parking area. Haihua Garden, Haixing Plaza have also been finished its construction on July 18, 1996, which consists of one 28-storied office building and one 30-storied apartment building. At 1st to 3rd floor in this building, it is the restaurant provided Chinese and western cuisine; at 4th floor is a large-sized business centre; at 5th to 28th floor is office using. There are two-storied basement in this buildings. The high-storied block building which are composed by Haihua and Haixing individually won the Shanghai award of excellent construction in 1995 and 1996 with their first class design, first class quality and first class environment. With the filling the Rihui River and planting green trees, and expansion Ruijin Nan Road, Xiesan Area has now become a modern residential area with first class residences, green space and advanced commercial and cultural facilities. It became a model of Shanghai old area renovation.

The principle of using foreign investment to make renovation for ’Xiesan Area’ is to batch lease out the area that is in poor condition and has high efficiency and construct buildings which concerns urban overall planning. On the other hand, local government can accumulate funds through batch lease of land for renovation of old areas and improve the citizen life qualities. During this period from 1992 to 1996, the lands for batch leasing reached 1300 areas, among which 600 in urban area. It made the renovation of old areas in Shanghai reach high tide.


moradia, favela, construção de moradores, desenvolvimento urbano

, China, Shangai


Using foreign investment for renovation of the shack area and improving citizen life qualities in Shanghai urban redevelopment is not only set to more ways of financing mechanisms on urban construction but also make a break-through more importance in ideological form. Since 1992, Shanghai made the further reform. Urban construction is quicker. More and more foreign investors enter into Shanghai and bring the development of Shanghai real estate prosperous. The demolition of old residential areas reached 11.63 million square meters till 1995. The funds from land leasing to foreign investors reached 13.6 billion yuan which invests in housing projects, is 12.5 per cent of total funds of investment in housing projects during the period from 1992 to 1996. Therefore the funds invested in urban infrastructure starts to become more widely.


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