Abstract
At the end of April in 1990, The Chinese Government announced a New Good Treatment Policy as law for the Shanghai City economic development, which meant the actual start of Shanghai's economic redevelopment.
In this paper, we develop an econometric model which contains 31 variables to explain the structure of Shanghai City's economy. The model is consisted of 26 endogenous variables and 5 exogenous variables. As for the estimation method, ordinary least squares (OLS) and Orcutt procedure are adopted. We use the model to forecast Shanghai City's economic structure to be effected by the New Economic Redevelopment Policy and present the results of the policy simulation.
This paper examines investment increase which will be brought about by the New Economic Development Policy. The impacts caused by the increasing investment on Shanghai City's economic structure are evaluated and assessed. In conclusion, we find facts that at the present time the investment in energy and communications infrastructure must be given the top priority, while investment balance should be maintained.
