City's foreign investment to exceed US$20b
Shanghai’s foreign investment will exceed US$20 billion this year for the first time, according to the Shanghai Commission of Commerce on Monday.
The city has made foreign investment stabilization a top priority this year, along with the COVID-19 pandemic prevention and control.
Foreign funded companies have become an important engine to promote the city’s economic growth, creating more than a quarter of the city’s gross domestic product, a third of its revenue, about two thirds of goods imported and exported, and the total output of enterprises with an annual income exceeding 20 million yuan (US$3.06 million), as well as a fifth of the city’s payroll.
Since the city’s first joint venture was established 40 years ago, the total amount of foreign capital actually used in Shanghai has exceeded US$270 billion.
In the1990s, Shanghai put forward the strategic idea of attracting Fortune Global 500 companies and headquarters of multinational companies.
In 2002, Shanghai was the first city on the mainland to introduce a policy of encouraging multinational companies to set up regional headquarters. At present, there are 767 regional headquarters of multinationals, of which 112 are of Fortune Global 500 companies make the city home to the most regional headquarters of multinational companies in China’s mainland.
The 13th Five-Year Plan (2016-2020) period was extremely important for the development of foreign investment in Shanghai. The scale and quality of foreign investment have been significantly improved over the past five years.
Meanwhile, the pace of opening-up has been significantly accelerated, and the investment environment significantly improved. Over the past five years, Shanghai's foreign capital absorption exceeded US$92 billion, about a third of the total foreign investment over the past decades.
Foreign funded companies are also an important support for the adjustment of Shanghai’s industrial structure.
The proportion of foreign investment in the modern service industry, advanced manufacturing, strategic emerging industries and other fields is rising, playing an important role in accelerating the construction of the city’s modern industrial system.
Foreign funded companies also play a major role in promoting scientific and technological innovation, setting up a total of 479 R&D centers. About half of the R&D investment by the city’s industrial enterprises with an annual income exceeding 20 million yuan comes from foreign funded companies.
In the next stage, Shanghai will implement the foreign investment law and its regulations on foreign investment, promote implementation of further opening-up and strive to build itself as an Asia Pacific Investment portal with an agglomeration of high-level players, a sound investment promotion system of high standards and an integrated high-level service system, so as to make Shanghai a central node of the domestic economic circulation and a strategic link of domestic and international double economic cycles.
Shanghai is to play its part in the Regional Comprehensive Economic Partnership while aiming at the Comprehensive and Progressive Agreement for Trans-Pacific Partnership with a much higher level at the same time to accelerate all-round and high-level opening-up.
In particular, Shanghai will seize the opportunities of accelerating the construction of China (Shanghai) Pilot Free Trade Zone and key areas such as the Lingang Special Area, Hongqiao Central Business District and the demonstration zone for integrated ecological and green development in the Yangtze River Delta region and a comprehensive pilot program of the further opening-up of service industry.
The city will promote the opening of banking, securities, insurance, futures, trust investment, asset management, credit rating and other financial fields, promote the further opening-up in the fields of telecommunications, Internet, health care, transport, culture and education and function as a test ground of other national policies and measures for the further opening-up.
Secondly, Shanghai will become a high-quality destination of foreign investment. Shanghai will focus on accelerating the construction of a modern economic system and promoting high-quality economic development and vigorously attract investment from advanced manufacturing industries, such as integrated circuits, artificial intelligence, biomedicine, strategic emerging industries and high value-added service industries.
The city will implement the “headquarters empowerment plan,” innovate policies on capital management, overseas financing, data flow, personnel entry and exit, break the bottleneck of cross-border flow of talent, innovative resources and other resources, encourage multinational companies to set up Asia Pacific headquarters, global headquarters and global R&D centers and further improve the ability of global resource allocation.
Shanghai will also strive to create a world-class investment environment. It will follow the highest level of international standards, be close to the needs of investors and enterprises, explore and implement high-standard international investment and trade rules and promote the opening-up from the flow of goods and resources to the opening-up of institutional rules, regulations, management and standards.
It will also fully implement the administrative mode of national treatment plus negative list before admission, strengthen the protection of the legitimate rights and interests of foreign investment, further enhance the marketization, legalization and internationalization of business environment, and strive to create a favorable environment for foreign funded companies and foreigners.
Tim Slatter, vice president of Ford China, told Shanghai Daily that the American multinational automaker had strong confidence of China in its economy and auto industry and had a very expansive plan for new model development in the coming years.
“Recently we announced the opening of our DX hub in Yangpu District where we will have our physical, vehicle design. But there is also digital experience creation and enterprise connectivity, so that’s a very strong investment in the Shanghai economy and Shanghai capability,” Slatter said.
Anri Nakahara, vice president of Shiseido China external affairs, said the Chinese market had the fastest growth and her company was very satisfied with Shanghai’s business environment.
“What Shiseido hopes is a win-win strategy with the city. The Chinese market still has a large potential and Shiseido will develop more high-quality products for the demand side amid the upgrading of consumption structure and expansion of domestic demand,” said Nakahara.
Jessica Cheng, chief financial officer of Covestro China, is proud that Covestro (Shanghai) Investment Co was recognized by the city authority as Shanghjai’s first global headquarters of multinational companies.
Cheng said the company’s integrated base in Shanghai has become its biggest manufacturing hub globally which owns 11 plants with the latest technology and with their products widely used in industries, such as architecture, automation and electronics.
“By the end of last year, total investment in the Shanghai base had reached 3.4 billion euros (US$4.15 billion) since construction commenced in 2001. We are very grateful for the Shanghai government’s support and mostly satisfied with the policies it offers,” Cheng said.
Shanghai is also home to the Asia-Pacific headquarters of the company’s special chemicals business. “The solutions we worked out here will be applied globally. In some areas, they lead our global R&D and innovation. For instance, in the application of 5G, intelligent driving and new materials to build fan blade of wind turbines amid the development of green economy,” Cheng said.