Stores launched
The trend of products making their regional or global debuts at CIIE extends beyond the expo, with Shanghai increasingly favored by brands from home and abroad for store or product launches.
The Shanghai Municipal Commission of Commerce said 375 new stores opened in the city in the first four months of this year.
Liu Min, deputy director of the commission, said: "These store launches help address supply-side reform at the consumption end. Domestic and international brands can also explore more opportunities to seek product innovation by making various debuts here."
Meanwhile, the China (Shanghai) Pilot Free Trade Zone, which was officially launched in 2013 and underwent expansion in 2015 and 2019, serves as one of the best examples of systematic innovation.
The negative list for foreign investment, first adopted by the Shanghai FTZ when it was launched, was promoted nationwide in July 2017. In early March, the Ministry of Commerce said efforts are being made to trim the national negative list to further relax the limit on foreign capital in certain areas.
The free trade account, first introduced at the Shanghai FTZ in June 2014, has brought increased convenience to companies' cross-border financial businesses — nurturing new business models.
In February last year, textile exporter Orient International Enterprise launched Shanghai's first offshore processing trade business, in which purchased raw materials are directly shipped to the company's overseas production base and delivered to overseas end users when production is completed. This process saves the cost of exporting the completed products from domestic facilities.
Xu Lan, deputy general manager of the transaction banking department at Bank of China in Shanghai, which has provided related services to Orient International, said such progress has been made possible by the free trade account's offshore economic and trade policies. The settlement and exchange services provided by the account have largely enhanced overall efficiency, Xu said.
Lingang Special Area, part of the Shanghai FTZ that was officially launched in August 2019, is another good example of Shanghai's advanced two-way opening-up.
Gu Jun, director of the Shanghai Municipal Development and Reform Commission, said that in recent years Lingang has formed a systematic opening-up mechanism featuring freedom of trade, investment, capital flow, transportation and employment, as well as the rapid connection of information.
Global new energy vehicle giant Tesla has benefited from the systematic advantages in Lingang. It held the groundbreaking ceremony for its Lingang gigafactory in early January 2019, and the first car was completed at this facility 11 months later.
Tesla's vice-president Tao Lin said, "Shanghai has provided Tesla with development opportunities in China."
Chen Kele, deputy director of the intelligent manufacturing promotion division at the Shanghai Municipal Commission of Economy and Informatization, said systematic innovation in Lingang has created a win-win situation. Not only has Tesla's production capacity increased, Shanghai's industrial growth has been boosted and the city's new energy vehicle, or NEV, ecosystem has been optimized, he said.
Over 1.1 million NEVs were in use in Shanghai as of last month, more than in any other city worldwide, data from the commission show. The goal of producing 1.2 million NEVs by the end of 2025, raised by the municipal government in a plan released in early 2021, now appears to be easily attainable.
Six key sectors
In Shanghai, the NEV industry is just one of six key sectors striving to create complete industrial clusters and build a new industrial system. Information technology, biomedicine, high-end equipment, advanced materials and fashionable consumer goods are also seeking substantial growth in the city to facilitate high-quality economic expansion.
To further optimize the city's industrial planning, in 2018, the Shanghai Municipal Government released an industrial map — the first of its kind in the country — and revised it last year. Early last month, Shanghai announced 24 policies to help attract more investment to the city.
The presence of foreign companies and investment is of great importance to Shanghai's optimized industrial planning. As a result, the local government has held global investment promotion conferences annually since 2020, reaching 850 cooperation agreements and attracting investment of about 1.8 trillion yuan.
Zhang Guohua, deputy director of the Shanghai Municipal Commission of Commerce, said that while the actual use of foreign capital rose by 28.1 percent year-on-year to $7.8 billion during the first quarter of this year in the city, the value of foreign capital reaching high-tech industries rose by 45.9 percent year-on-year.
To date this year, local government officials have met with top executives from 51 multinational companies. The government has also set up special service mechanisms to attract, construct and officially operate foreign-invested projects, Zhang said.
The municipal government's efforts have paid off. Shanghai's accumulative actual use of foreign capital exceeds $330 billion. A total of 907 multinational companies have set up regional headquarters in the city, which is also home to 538 multinationals' regional research and development centers.
Meanwhile, some 70,000 foreign companies have set up operations in Shanghai, contributing about 25 percent of the city's GDP and one-third of its tax revenue. They also account for more than half the city's aggregate industrial output generated by companies with an annual turnover of at least 20 million yuan. Nearly two-thirds of Shanghai's annual import and export value has been contributed by these foreign companies.
"Shanghai is still one of the most attractive destinations for foreign investment worldwide," Zhang said.
At the start of this year, the authorities in Shanghai rolled out the latest action plan to improve the city's business environment. The plan has been revised every year since 2018.
Chen Jining, Shanghai's Party secretary, said: "Improving the business environment is key to stabilizing market expectations and strengthening confidence. An optimized business environment is required, as Shanghai aims to further elevate its core competitiveness in the global market and better serve China's new development paradigm."
Zhang said Shanghai should better address the Belt and Road Initiative to set up new cooperation channels and seek fresh growth engines, adding that the China-Europe Railway Express should play a bigger role in providing new trade opportunities for companies based in the city.