Lingang doubles size of FTZ as city moves to take on the world
The Shanghai free trade zone officially added a new area yesterday, doubling the size of China’s major economic reform test ground.
The China (Shanghai) Pilot Free Trade Zone now includes Lingang new area, a port town at the southeast tip of Shanghai.
The new section will match the standard of the most competitive free trade zones worldwide and will facilitate overseas investment and capital flows and realize the free flow of goods, according to the area’s development plan.
The area will be built into a special economic function zone with global influence and competitiveness.
The Lingang Special Area is to the south of Dazhi River, east of Jinhui port, and includes the south side of Xiaoyangshan Island and Pudong International Airport.
The first-stage of development will be carried out in Nanhui New Town, the Lingang equipment industrial zone, Xiaoyangshan Island and the south side of Pudong airport covering a total 119.5 square kilometers.
Zhu Zhisong, deputy secretary-general of the Shanghai municipal government and executive deputy director of the Lingang area administrative committee, said the Lingang area would become a new engine for China’s reform and opening-up.
The plan stated that the gross regional product in the area will exceed 1 trillion yuan (US$140 billion) by 2035.
With 100 billion yuan worth of industrial projects this year, Zhu forecast 20 percent year-on-year growth to ensure that the goal will be achieved.
The new area will also become a business-friendly and livable modern town and better serve China’s reform and opening-up.
As a relatively new town, it will create the freest open economy, Zhu said.
“The development of new types of international trade, cross-border financial services, research and development of cutting-edge science and technology, and high-end international shipping are among Lingang’s top priorities” he said.
Under the development plan the area will be built into an “internationally acclaimed, competitive free trade industrial park.”
“Moreover, Lingang will focus on key sectors, such as artificial intelligence, integrated circuits, biomedicine and aerospace and build a number of world-class industrial clusters that represent China’s participation in international competition.”
Analysts said the focus will be on China’s manufacturing weak links in its industrial chain in the fields of chips, drugs, smart technology, aircraft engines, new-energy vehicles and data centers. Chips and AI are of special importance, they said.
Media reports said companies registered in the area include NASDAQ-listed ACM Research Inc and solar energy giant Hanergy.
Leading manufacturing companies such as SAIC Motor, Shanghai Electric Group Co, Siemens and GE have already established a presence in the area.
US electric carmaker Tesla’s first overseas plant — worth US$7 billion — is also located in Lingang and is set to to begin production within the year.
Earlier this year, Tesla founder Elon Musk was in Lingang to break ground for the company’s first overseas factory — the largest foreign-funded manufacturing project yet built in Shanghai.
The Tesla Shanghai Gigafactory will integrate research and development, manufacturing, sales and other functions, with an annual production capacity of about 500,000 all-electric vehicles.
Grace Tao, Tesla’s global vice president, said: “Tesla is the first wholly foreign-funded Chinese manufacturer. There is no precedent in terms of manufacturing, technology or policy environment,” Tao said.
“The Shanghai free trade zone has many advantages. Innovative ideas can be tried first here, giving enterprises more space to test the most advanced technology in the world.
“If it can bring greater productivity, it will be of great benefit to China’s future development.
“When Tesla comes to Lingang, it will optimize the overall industrial layout and bring more resources to Lingang. It’s win-win.”
Tesla has also received a comprehensive acceptance certificate for a power station it built as part of the phase I project of its factory three days after Tesla completed construction. This reflected the “Shanghai Service and Lingang Speed” policy as well as the new area’s resolution to optimize its business environment. It also set a record for the approval process.
Also yesterday, 13 companies were granted business licenses after the debut of the new area. One was newly established while the rest were for business registration changes.
A subsidiary of Lingang’s major developer Lingang Group, the newly founded Lingang New Area Co, was granted business license No. 001.
General manager Sun Canglong said the new company had contacts with large state-owned enterprises and international conglomerates in finance, trade, medicine, duty-free retail and the Meetings, Incentives, Conferences and Exhibitions sector.
“With the support of industry and urban infrastructure in Lingang, we still have a lot of room for improvement in the modern service sector,” Sun said.
Feng Hui, chief operating officer of Shanghai Junshi Bioengineering Co, said Lingang was ideal in terms of entry and exit procedures and imports and exports.
“We also anticipate preferential policies for talent attraction. We want more talent and larger business in Lingang,” Feng said.
Yang Yun, chairman of Rongfeng Wind Energy Co, a wholly owned subsidiary of China National Offshore Oil Corp, said: “We hope to enter the deep sea area. Our country has abundant deep-sea resources.
“Our future development will not only be limited in domestic waters, but also the high sea. At that time, the advantages of Lingang will be fully reflected, particularly in policy and technology support.”