Shanghai needs at least 15 years of efforts to achieve the goal of becoming a world-class financial centre to match Tokyo or New York, according to a top provincial official.

"It's not impossible, but there are prerequisites," said Huang Qifan, vice-mayor of Chongqing. Before his promotion, Huang was director of the Shanghai Economic Commission.

The city needs a big increase in gross domestic product that should account for at least 10 per cent of the nation's. At present, it is only five per cent. The country ought to take around 15 years to reach a GDP of $3 trillion, a benchmark that can provide a favourable economic environment.

"Even when it is listed as a global financial centre by then, there will still be a gap with Tokyo and New York in scale," he said.

Huang made the remarks at Saturday's symposium on incubation and development of multinational companies sponsored by the Shanghai Economic Commission.

"The process of turning the city into a financial centre will create a favourable atmosphere for the growth of local multinational companies," he said.

Shanghai now has five conglomerates, each with annual sales of 30 billion yuan (US$3.6 billion), including Shanghai Baosteel and Shanghai Automotive.

Three out of five have good prospects of becoming one of the world's top 500 companies by 2005. And 50 enterprises will turn into part of the country's top 500 companies.

"China has created conditions for the birth of its multinational companies, which include its accession to the World Trade Organization and its wider opening to the market economy," Huang said.

Without multinationals, China will be thrown into a disadvantageous position in terms of resource disposition, international labour division and benefit distribution, he added. "It is strategically critical to foster China's own multinational companies," the vice-mayor said.

"But we can't just copy the experiences of multinationals in developed countries. We should take a practical approach to foster a group of made-in-China multinationals."

Huang suggested that the nation further improve its business environment for incubation of its own multinationals.

Efforts should be taken to smooth its property rights system, improve the social security system, enable free flow of labour, allow money-losing enterprises to be bankrupted according to the law, and loosen foreign exchange controls so that enterprises can get foreign exchange freely from banks to invest overseas.

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