Foreign firms share aspirations for Lingang at symposium

Li Xinran
Representatives of more than 20 foreign-funded enterprises participated in a recent symposium, covering many key industries and frontier fields in the Lingang Special Area.
Li Xinran

Representatives of more than 20 foreign-funded enterprises participated in a recent symposium, covering many key industries and frontier fields in the Lingang Special Area.

In terms of further opening-up, developing offshore business, improving the industrial ecology and building a tax system with international competitiveness, these foreign enterprises are concerned about what actions Lingang Special Area will take next.

Representatives, including those from Tesla, SAP, Cummins, Novo Nordisk and PricewaterhouseCoopers (PwC), participated in the symposium.

At the forum, representatives of nine foreign-funded enterprises discussed Lingang Special Area's investment and trade freedom, system opening and innovation, a convenient business environment, key business layouts and future development strategies, among other subjects.

Along the way, they shared experiences related to common growth with Lingang, describing the grand blueprint for enterprise development and actively providing advice and suggestions for the construction of a high-level special economic functional zone.

Song Gang, senior director of production and manufacturing at Tesla's Shanghai Gigafactory, said the company has accelerated the pace of localization development.

Last October, Tesla set up the Shanghai Research and Development Innovation Center to implement the localization strategy relying on the Shanghai Gigafactory.

"At present, the R&D team in Shanghai is developing rapidly. In the future, it will build new cars developed in China, launched globally and sold internationally," Song said.

Akerson (Shanghai) Enterprise Management Co is the Asian regional headquarters of Akerson Group, a nonferrous metal trader. It registered in the Lingang Special Area in 2012, mainly engaging in the trade of nonferrous metals and mineral products in China and offshore bulk commodities in Asia. In 2021, the import and export trade volume exceeded 2 million tons and trade exceeded 46 billion yuan (US$6.72 billion).

Wang Hao, the financial director of Akerson China, said the company's onshore and offshore businesses are serving as two engines of growth. In 2021, more than US$400 million of offshore resale transactions were completed and over US$500 million were completed in the first half of 2022.

Offshore business has become an important part of the company's business structure.

"In June, the group injected another 25 million yuan of capital to the Shanghai company as the first step to keep investment in place," Wang said.

Tang Ciming, a partner in PwC'S comprehensive business consulting unit, said he hopes the special area will establish an internationally competitive tax system and form a fiscal and tax system that matches the special economic functional area.

"For example, we will study and expand the scope of applications of enterprise income-tax incentives in key areas. In addition to the four major industries, we will implement 15-25 percent tax incentives for high-end equipment and other industries," Tang said.

"At the same time, we will focus on high-end service industries such as cross-border finance and offshore trade and shipping services, and implement special tax policies for high-end service industries."

The 15 percent enterprise income tax policy for the four key industries – integrated circuits, artificial intelligence, biomedicine and civil aviation – is the tax policy with the highest social awareness implemented in Lingang."

To date, 132 enterprises have passed the qualification-certification process, with an aggregate tax reduction amount of 1.2 billion yuan. This policy has effectively promoted the agglomeration of relevant frontier industries in the special area.

In addition, Tang expressed hope that Lingang can serve as a platform and test field for China to participate in the formulation of international economic and trade rules, and participate in the formulation of international economic and trade rules in specific fields, such as AI and global digital governance.

Chen Jinshan, Party secretary of Lingang, said the special area has undertaken major initiatives to reform and open up, and has always maintained strong development momentum.

"In the next stage, Lingang will further promote high-quality development in an all-around way with a better design, a further vision and a more incorporated style," Chen said.

Presently, there are more than 2,600 foreign-funded enterprises in Lingang with aggregate foreign capital of US$3 billion. In the first half of the year, a total of US$1.2 billion investment was put in place, with a year-on-year increase of more than 260 percent, demonstrating the confidence and determination of foreign-funded enterprises to continue investing in Lingang.

Zhu Yi, deputy director of the Shanghai Commission of Commerce, said that in terms of foreign investment, Lingang has become one of the strongest growth areas in the city.

PwC recently set up the first aviation finance innovation laboratory in Lingang to promote the development of the civil aviation and international finance industries in the special area by cultivating the aviation leasing market.

Tesla's Shanghai Gigafactory, which is "the same age" as the special area, recently manufactured its one millionth vehicle in the area.

Lenze Group, a German driving and automation giant, has made the area its world's largest production base outside of Germany after setting up a Lingang plant about 15 years ago.

In the next phase, Lingang will continue to promote high-quality development in an all-around way – expanding open areas, accelerating the creation of new platforms, providing high-quality services and accelerating the hiring of talent at home and abroad.

The Lingang authority is studying and introducing a series of supporting policies to accelerate the introduction of professionals in various industries. It is committed to becoming a model embodying the construction concept of a "people's city" and the preferred place for global talent innovation and entrepreneurship to create an environment suitable for living and working for foreign enterprises.

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