Multinational companies flourish in Hongqiao CBD

Multinational companies are making full use of the benefits of the Shanghai Hongqiao International Opening-Up Hub.

The Shanghai government took a significant strategic decision in 2009 to expand the Hongqiao Central Business District, or CBD, which led to the creation of the open hub. The government has been giving it important functions with a number of favorable policies.

The State Council, China’s Cabinet, gave its approval in 2021 to develop the area, together with parts of the provinces of Zhejiang and Jiangsu, into a center for higher-level opening-up and strengthen international collaboration, with the Hongqiao CBD serving as its central hub.

To put the decision into practice, a number of policies were introduced, including those that facilitate the recruitment and settlement of talent, the admission of foreign-invested ventures into specific industries, support for bonded logistics, cross-border capital operations and management, and the optimization of aviation services at Shanghai Hongqiao International Airport.

To reinforce the foundation of the Hongqiao CBD and promote the integrated development of the entire Yangtze River Delta region, 24 additional measures were adopted in July 2023 with the goal of accelerating the development of the open hub.

Jay Jiang, vice president of Bosch China, said that the opening-up hub and the growth of the Hongqiao CBD had greatly helped the company.

Established in 1886, Bosch was a pioneer in globalization strategy. It opened its first sales office in Asia in Shanghai in 1909, and in the middle of the 1990s, it began to rapidly expand in China.

“Since we opened a representative office in Shanghai in 1995, we have made rapid progress. We already employ close to 60,000 people in China across around 60 businesses and sites,” Jiang said.

“We made more than 130 billion yuan (around 18 billion euros) in sales revenue in China last year, making it the largest single market for the group for three years running. Remarkably, last year’s sales for Bosch China’s mobility business surpassed 100 billion yuan.”

The company moved into its China headquarters in the Linkong Economic Demonstration Zone in the Hongqiao CBD in 2011.

“There are clear benefits to the Hongqiao business area. It is conveniently located near the Hongqiao train station and airport. Traveling to different locations in the Yangtze River Delta region is convenient, which is crucial because Bosch has made significant investments in Suzhou, Wuxi, Hangzhou, and other cities in Jiangsu and Zhejiang provinces,” he said.

Located in the west of Shanghai’s downtown, the Hongqiao CBD is home to the Hongqiao airport, the Hongqiao Railway Station, and other transportation hubs that provide convenient access not only to the inner-city traffic network but also to the rest of the country, particularly the Yangtze River Delta.

There are several conference and exhibition venues close by, which is crucial to business operations, Jiang said.

“Bosch, which has been based in Linkong for 12 years, has expanded in tandem with China’s quick development, particularly the economy’s quick ascent following reform and opening up. Originally, we only employed a few hundred people here; today, we employ over 3,000 people. The most obvious example is the tremendous growth Bosch China has experienced over the last 12 years. We made roughly 30 billion yuan in sales in China in 2011, and they surpassed 130 billion yuan in 2022,” he said.

“The numbers speak for themselves.”

“Some Bosch Corporate Research scientists are now working here, which is really important because they focus on forward-thinking research such as artificial intelligence and novel materials.

“Their accomplishments are used by our entities around the world and help to determine our company’s future development orientation.”

He said that the administration of the Hongqiao business district has provided significant assistance to global corporations like Bosch, such as favorable talent settlement policies and reasonably-priced housing for them.

Another beneficiary of the hub’s expansion is Kistler, the world’s leading dynamic measurement solution provider, whose clients include Bosch.

Founded in 1959, the Swiss family-owned company entered the Chinese market in 1996 with a modest marketing and after-sales operation in Shanghai.

In 2018, it relocated to Minhang’s South Hongqiao Area and grew into a 200-person business, expanding the function into more engineering system integration.

“That means putting together a whole technical system for our customers, mostly automotive customers,” said Michael Raber, Continental Head APAC of Kistler Group. “For instance, we have a lot of exposure to the automotive industry and EVs in particular as well. Now, new technologies and new trends are coming up. This enables us to serve the market from here.”

Raber lauded the area for its easy access to clients and convenient traffic conditions.

“We have all the conditions for transport. We have the railway station and the airport around the corner. We have the connections to the highway. Here, we have a large customer base in Suzhou, in Wuxi. So going out from Shanghai to the customers from here is very, very easy,” he said.

He is especially pleased that the company now occupies a new seven-storey facility in the SCE Plaza in the West Hongqiao Area, which he says complements Kistler’s growth plans.

In addition, he stated that the Minhang government provided beneficial policies and networking opportunities when the company relocated to the new location.

“We found the tax environment here very attractive as well, as was the support for initiatives and projects that we were doing,” said Raber.

“Now look at the policies over time. I think it makes me confident that we have made the right choice,” he said. “Why is that? So? Because the government evolves, it also develops new policies and a new framework. This will be a big economic upturn.”

Over the years, Kistler has grown by double-digits.

In addition to technical expansion, the company will invest in its Hongqiao R&D center as new policies stimulate investment.

“We want to double our business in China in the next five years. We believe that does not work by simply scaling up or multiplying what we are doing at the moment.

“At the moment, our business is more like sales and after-sales service with a bit of system integration capabilities to satisfy our customers. What we are doing in the future is developing research and development, engineering, technology, and also local manufacturing,” he said.