Shanghai Abundant in Investment Opportunities

Invest Shanghai recently released 

2020 Shanghai Foreign Investment Guide

Heidy Han | Partner

W&H Law Firm Shanghai Office

Member of Intl. Bar Association 

[email protected]

WeChat 13818408820

01 Enhancing Urban Capacities and Core Functions

As Chinas largest economic center, Shanghai exhibits buoyant economic dynamics characterized by robust resilience and inclusiveness. 

Shanghai grows faster than most of the worlds major cities in terms of GDP, recording a compound annual growth rate of 11.56% between 20012019.


Shanghai has achieved remarkable progress in its Initiative of Five Centers, showed strong economic resilience and vitality, and enhanced its urban capacities and core competitiveness in every aspect. 

Economy: Shanghai is one of the worlds top ten economically vibrant cities. According to the study of Oxford Economics in 2018, Shanghai was expected to rank fourth in the 2035 Global GDP Rankings of Major Cities, jointly with London.

Sci-tech Innovation: As of the end of 2019, 70 enterprises had launched their IPOs on the Science and Technology Innovation Board, or the STAR Market. In 2019, the total funds devoted to research and test (R&D expenditure) in Shanghai accounted for 4% of the local GDP, marking an increase for nine consecutive years. 

ShippingShanghai ranked fourth in the 2019 Xinhua-Baltic International Shipping Centre Development Index. Shanghai Port has topped the list of global ports in terms of container throughput for ten consecutive years.

FinanceShanghai takes the fourth place in the Global Financial Centers Index (GFCI 27) in 2020. Shanghai is No.1 in China according to the China Financial Centers Index in terms of comprehensive competitiveness and financial market scale. 

TradeShanghai is the worlds largest port city for international trade. Shanghai ranks second globally in terms of the intensity of international retailers.


02 Influx of Foreign Investments into the Pioneer of Chinas Opening-up

In 2019, foreign investment in Shanghai maintained steady growth, and by the end of the year, a total of over 50,000 foreign-invested enterprises had been established in the city. Already a home base to the largest number of regional headquarters (RHQs) and foreign-invested R&D centers in China for years, Shanghai has continued to push ahead the all-round opening-up at a higher level. As a result, it is now one of the most attractive investment destinations in China and beyond, boasting a new foreign investment landscape pillared by headquarters, service and R&D economies.

New foreign investments 

in Shanghai in 2019 

Total foreign investments 

in Shanghai as of the end of 2019

A secure and healthy investment environment is the foundation for continuous attraction of investment. 

Well known for its security and orderliness, Shanghai is one of the worlds safest cities to invest in. According to the research of a third- party institution, the index of the sense of security and satisfaction of people in Shanghai has been steadily growing for seven years in a row, testifying to how safe and secure the city is. The city was also rated by The Economist magazine as one of the safest cities in the world.

Regional Headquarters of Multinational Corporations

In recent years, given the changing landscaping of Chinese and international economies, multinational corporations (MNCs) have been accordingly adjusting their business operation models and global presence. Closely following their movements, Shanghai has been committed to strengthening its capacity of allocating global resources of high-end factors to encourage MNCs to set up in the city RHQs covering Asia, Asia-Pacific or broader regions. At present, RHQs of MNCs in Shanghai mainly operate in a diversified range of manufacturing industries, represented by automobile, chemicals, biopharmaceuticals and electronic equipment. RHQs of MNCs make up 1.34% of foreign- invested corporations in Shanghai, contributing substantially to local economic growth.

Foreign-invested R&D Centers

Favored by foreign and local innovators, Shanghai is home to one fourth of the foreign-invested R&D centers in China, thanks to its proactive efforts in recent years in supporting foreign-invested enterprises to establish R&D centers and open innovation platforms. It has also been encouraging these R&D centers to develop global competitiveness and participate in the R&D of public service platforms. Today, foreign-invested centers are playing an essential role in building Shanghai into a global innovation hub.

03 Further Opening-up Measures in Support of Local Development

At the first China International Import Expo (CIIE) in 2018, three missions were set for Shanghai by President Xi Jinping, cementing its role in Chinas further opening-up: expanding the SHFTZ to include a new special area; launching on the Shanghai Stock Exchange (SSE) a science and technology innovation board with a pilot registration-based IPO system; and promoting the integrated development of the YRD region as a national strategy. The three missions, together with the CIIE, constitute the "3+1" system, which will create new opportunities driving the growth of Shanghai in the new era.

Lin-gang Special Area of SHFTZ

The Lin-gang Special Area of SHFTZ was inaugurated on August 20, 2019, with an initial planned area of 119.5 km2. As an all-round, fundamental institutional innovation in response to new trends in global economy and trade, this special area with re-organized functions is expected to strengthen Shanghais position as a gateway to both national and international markets, and to serve as an important platform for China to become more integrated into the global economy.

The SSE STAR Market with a Pilot Registration-based IPO System 

Launched on June 13, 2019, the SSE science and technology innovation board, or the STAR Market, is a critical move in promoting the development of Shanghai as a global center of both sci-tech innovation and finance. Aiming to facilitate the marriage of capital and innovation, it is designed as a source of capital for high-tech enterprises and the real economy. As of the end of 2019, 70 companies were listed on the STAR Market, raising a total of RMB 82.4 billion. 

Integrated Development of the YRD Region as a National Strategy 

As one of the most economically dynamic, open, and innovative regions of China, the Yangtze River Delta (YRD) region is actively pursuing integrated regional development to better contribute to Chinas reform and opening-up. In 2018, the YRD Regional Cooperation Office was established by the municipal government of Shanghai jointly with the provincial governments of Jiangsu, Zhejiang, and Anhui, as the first permanent cross-regional administrative office set up for the integrated development of the YRD region. In December 2019, the Outline of the YRD Region Integrated Development Plan was issued jointly by the CPC Central Committee and the State Council of China, highlighting the need for Shanghai to enhance its urban functions and core competitiveness as a forward-looking, globally-minded city, and take lead in the integrated development of the YRD region. 

The Second CIIE 

The second CIIE was held in Shanghai on November 5-10, 2019, as not only an international exhibition and high-level forum, but also an opportunity for diplomatic dialog and people-to-people exchanges. Representing an important move of China to open its market to the world, the CIIE is an international public platform for open cooperation that maximizes mutual benefits. The event will continue on an annual basis, signifying Chinas commitment to keeping its door open to the world, and creating more opportunities for global economic growth. 

     READ MORE     

China Target Internet Giants in Antitrust Law Overhaul

Is COVID-19 a Force Majeure event under your CM contract?

Shanghai Favorable Policies for Companies Affected by COVID-19

How do Chinas employers pay salary during 2019-nCoV outbreak?

China issues judicial interpretation on Foreign Investment Law

China Call for Comments on Draft Implementing Regulations of FIL

China to introduce regulation to improve business environment

China Issues Rules on Prohibition of Abuse of Market Dominance