Business climate warms amid deregulation
Part of Shanghai’s goal to become a global center of commerce rests on improving the city's business environment.
“Shanghai must stay at the forefront and strive to build the city into a powerhouse in the new round of comprehensive opening-up in China,” said Shanghai Party Secretary Li Qiang. “It should be a bridgehead to serve the Belt and Road Initiative, an Asian-Pacific hub to allocate global resources and a strategic support for China’s development on the world stage.”
The city has attached great importance this year to the release and implementation of 100 new policies to attract foreign investment. The measures cover the areas of finance, advanced industries, intellectual property, import support platforms and the business environment.
For example, imported cancer drugs not currently registered in China can now be trialed in Shanghai before registration application. Also, restrictions on foreign investment in the aviation industry are being lifted, cooperation with other nations in the field is being encouraged, and collaboration on talent, technology and management is being enhanced.
More than 90 percent of the 100 measures are expected to be implemented by the end of the year, according to Zhou Bo, Shanghai’s executive vice mayor.
Also of note, the long-awaited Shanghai-London Stock Connect is expected to go live this year — a momentous step in China’s further opening of its financial markets to foreign investors.
Trial guidelines for the stock link were published by the China Securities Regulatory Commission on October 12, allowing stocks listed on the Shanghai and London exchanges to be cross-traded through the issue of depositary receipts.
Shanghai is also working to make the business environment more convenient, governed by law and a greater international presence.
According to the Doing Business 2018 report of the World Bank, China ranked the 78th in ease of doing business, up 18 notches since 2013. Shanghai and Beijing are the two sample cities in the report.
When meeting the World Bank data-collection team for the report in May, Shanghai Mayor Ying Yong said that the business environment is an important “soft power” for competitiveness, and he noted that the Chinese government has always valued efforts to build a good business environment.
“In 2018, we will push forward supply-side reforms and focus on streamlining administration and lightening the burden on companies to improve the business environment and vitalize the market in Shanghai,” said Ma Chunlei, director of the Shanghai Development and Reform Commission.
The target is to help businesses reduce their cost burden by 50 billion yuan (US$7.23 billion) this year. To that end, Shanghai has implemented measures to help cut taxes, lower the ceiling of imposed government funds, lessen charges, reduce the costs of labor, energy, financing, and institutional transactions, and encourage regional pilot programs.
The city has also cut fees for city road repairs, land use for foreign-funded companies, registration for drugs and medical equipment, and testing charges for special equipment.
“The government’s fiscal and tax reforms and other policies and measures vigorously promote the sustained and healthy development of Shanghai’s economy and society,” the Shanghai Finance Bureau said. “These include cutting, canceling or exempting administrative fees.”
Meanwhile, the city has implemented measures to further promote reforms in separating operating permits and business licenses, optimizing administrative approval processes, and promoting “Internet Plus Government Services” to streamline administration and delegate power to lower levels.
For startups, Shanghai has cut red tape in administrative approvals, saving business owners nearly half of their time. It takes only six days to apply for a permit to start a new business, down from 22 days previously. The number of hoops fledgling businesses have to jump through also has been cut.
Shanghai has scored well in many internationally recognized evaluations, ranking the 9th on the Globalization and World Cities and the 6th on the Global Financial Centres Index, authorities said.
“But the business environment can always be improved further,” Ma said.