Shanghai and Multinational Enterprises: A Two-Way Journey
Opening up to the outside world is China’s basic national policy. This year’s government work report proposed to make greater efforts to attract and utilize foreign investment. In 2022, China utilized over $189 billion in actual foreign investment, setting a historical record.
According to a survey by PwC last year, 60% of multinational companies in China are seeking opportunities to expand their businesses, with over three-quarters of these companies preferring to invest in the eastern regions of China.
Attracting foreign investment has always been Shanghai’s strength. Located in the Yangtze River Delta, China’s most dynamic economic region with the highest degree of openness and strongest innovation capacity, Shanghai plays a key role in international economic and trade exchanges as the forefront of China’s reform and opening up. In 2022, Shanghai utilized over $23.9 billion in actual foreign investment, a historical record. The cumulative actual foreign investment reached over $330 billion, with more than 70,000 foreign-funded enterprises thriving in Shanghai. Among them, 907 are regional headquarters of multinational companies, and 538 are foreign-funded R&D centers, both ranking first among Chinese cities.
Since the beginning of this year, international investors have been actively visiting Shanghai. Since March, global executives from Fortune 500 companies such as Apple CEO Tim Cook and Tesla CEO Elon Musk have frequently visited Shanghai to discuss deepening cooperation. This not only reinforces Shanghai’s position as the top choice for foreign investment but also brings new opportunities for Shanghai to intensify its efforts to attract foreign investment.
It is crucial to both “bring in” and “go out.” A two-way journey is necessary to achieve win-win cooperation. Under the momentum of the “Invest in China Year” investment promotion series activities organized by the Ministry of Commerce, Shanghai has frequently launched overseas investment promotion activities. In April and May, Mayor Gong Zheng led a delegation to Singapore, Indonesia, and Thailand to conduct investment promotion and trade negotiations, sending a strong signal of Shanghai’s continued expansion of openness and boosting the confidence of foreign companies to invest in Shanghai. Meanwhile, various districts and key industrial parks in Shanghai have also formed delegations with tasks, projects, and policies to visit countries such as Japan, South Korea, and Switzerland, collectively showcasing the ‘Shanghai Attraction’.
According to Yu Fang, Director of the Italy Asia/China Business Department at PwC, a representative of Shanghai’s global investment promotion partners, Italy is China’s third-largest import and export trade partner in the EU. In 2022, China’s total exports to Italy reached $51 billion (with a compound annual growth rate of 6.6% from 2014 to 2022), and total imports reached $27 billion (with a compound annual growth rate close to 4% from 2014 to 2022). From 2015 to 2022, the main areas of cross-border investment between China and Italy were precision manufacturing, pharmaceutical and healthcare, and retail and consumer goods industries.
‘The industries of China and Italy are highly complementary, and economic and trade cooperation has yielded fruitful results. The two countries have achieved early successes in areas such as port construction, aerospace, clean energy, industrial funds, and third-party markets,’ said Jia Guide, the Chinese Ambassador to Italy, in a public statement.
Currently, Shanghai is building a ‘2+(3+6)+(4+5)’ modern industrial system, focusing on attracting high-quality projects in fields such as integrated circuits, biomedicine, artificial intelligence, electronic information, life and health, automotive, high-end equipment, advanced materials, and fashion consumer goods. Among these, foreign-funded manufacturing projects with strong leadership, significant driving force, and exemplary benefits are particularly favored.
Italy and Shanghai have limitless possibilities for cooperation in industrial synergy and innovation. We will actively implement the requirements of the Shanghai Municipal Party Committee and Municipal Government, ensuring the effective introduction and utilization of foreign capital and advanced technology, thereby contributing to a virtuous cycle of high-quality development and high-level openness,” said Liu Ping, Deputy Director of the Shanghai Municipal Commission of Economy and Informatization, in his speech at the event. “Choosing Shanghai means resonating with the times; choosing Shanghai means growing together with the most dynamic, resilient, and open market; choosing Shanghai means embracing a world-class business environment; choosing Shanghai means journeying alongside a beautiful life.” We welcome more Italian companies to choose Shanghai and invest in Shanghai.
According to Italian statistics, over 40% of Italian investment enterprises in China are concentrated in Shanghai and its surrounding areas, covering numerous fields such as manufacturing, pharmaceuticals, finance, automotive, food, and fashion. Li Bin, Minister Counselor for Economic and Commercial Affairs at the Chinese Embassy in Italy, believes that Shanghai’s ability to attract global investors, including those from Italy, is due to China’s stable development and continuous expansion of openness. A growing economy, vast market, and open and inclusive China are irreplaceable partners for Italy.
Thanks to government support, Solingen has gradually been providing diagnostic solutions in key hospitals across China. To better meet the needs of the Chinese healthcare system, the company has established an advanced factory in Baoshan District, Shanghai, aiming to contribute to the future of the Chinese medical industry.” Ugo Gay, General Manager of Solingen Group, representing Italian investment in Shanghai, shared opportunities in Shanghai.
It is reported that on June 9th, Solingen Diagnostic Group’s Shanghai production base project, located in Baoshan High-Tech Park’s Liandong U Valley (hereinafter referred to as “Solingen Diagnostic Baoshan Factory”), was inaugurated.
Baoshan is an important hub for Shanghai’s major development strategy of ‘North-South Transformation’. According to Ding Jianping, Director of the Baoshan District Science and Technology Innovation Development Committee (District Investment Promotion Office), Baoshan is vigorously promoting the ‘Science and Technology Innovation in Baoshan’ initiative to accelerate industrial transformation and upgrading, with biopharmaceuticals being one of Baoshan’s leading industries. Chen Jianzhong, President of Solingen Diagnostics China and Chairman of the Board, has stated that choosing Shanghai and Baoshan is a strategic move for the company to focus on the entire industry chain of research, production, and sales in China. In the future, the company plans to establish itself in Shanghai, creating an internationally leading production base and research center, developing a diverse range of products including research reagents and supporting instruments, thereby advancing Chinese manufacturing to serve the needs of the Chinese medical market.
Shanghai is one of the primary investment destinations in China for Italian companies. Leading Italian enterprises such as Comau Engineering, Solingen Diagnostics, Ansaldo Gas Turbines, and Ferrari have deeply rooted themselves in Shanghai and achieved tremendous success,” stated Wang Dong, Director of the Shanghai Investment Promotion Service Center, during a presentation on the theme of ‘Invest in Shanghai’. Shanghai will continue to create a world-class business environment and investment environment, providing multinational companies with optimal policies and attentive services, thereby creating more market opportunities, investment opportunities, and cooperation opportunities for enterprises.
At the beginning of this year, the ‘Shanghai Action Plan to Strengthen Integrated Innovation and Continuously Optimize the Business Environment’, also known as the 6.0 version of optimizing the business environment, was announced, introducing reforms encompassing nearly 1,000 measures. Market entities are the most direct beneficiaries of the business environment. In 2022, Shanghai saw the establishment of 414,600 new market entities, with a cumulative total of 3.2839 million entities, averaging over 1,600 new market entities daily.
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Prior to hosting the ‘Invest in Shanghai – Global Tour’ series (Italy stop), a delegation from the Shanghai Investment Promotion Bureau also visited local companies in Tel Aviv, Israel, and Milan, Italy, to understand their investment intentions and development strategies in Shanghai, and to discuss further cooperation.In addition to continuing the targeted approach of visiting and connecting with enterprises, the Shanghai delegation made a significant move during the Italy stop by inviting nearly 100 local Italian companies to participate in the event. The industries represented by these companies were focused on biopharmaceuticals, digital economy, green low-carbon, automotive, and other sectors, intersecting with Shanghai’s modern industrial system.
The ENEL Group is a leading enterprise in the global electricity industry, second only to China State Grid, and ranks as the world’s second-largest electricity company by revenue. Its business scope includes power generation, transmission, distribution, and natural gas transportation. Currently, the company mainly participates in the Chinese market through technical services, and has successively cooperated with Shanghai Electric and China Huaneng Group.
LOCCIONI Group specializes in research on measurement technology and automation control systems, with installation and commissioning lines in over 40 countries worldwide. The group established its Shanghai branch in China in 2013, providing technical support to customers in China and the Asia-Pacific region.
GEVIWIND is a local Italian innovative company focusing on “AI + energy”. By developing high-tech and high-performance wind turbines, the company uses AI intelligence to analyze real-time wind data, maximizing energy production and equipment lifespan while reducing carbon emissions, thus contributing intelligent solutions to green and low-carbon development. “When attracting investment, we must actively go out, truly engage with enterprises, ‘smell the scent of steel,’ understand the real industry, grasp the development of enterprises and our own situation, and achieve precise docking,” Director Wang Dong stated. Shanghai serves not only as a springboard for domestic companies to go global but also as a gateway for multinational enterprises to enter China, thus linking both domestic and international cycles effectively.
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Compared to traditional point-to-point investment attraction models, Shanghai has shifted towards Investment 3.0 models such as industry chain investment, platform investment, fund investment, and circle of friends investment. Among these, the circle of friends investment model is one of Shanghai’s specialties.In this event, not only did Shanghai invite PricewaterhouseCoopers, representing Shanghai’s global investment partners, to endorse ‘Invest in Shanghai,’ but it also held a trilateral cooperation signing ceremony.
The Shanghai Investment Promotion Service Center, the Baoshan District Investment Promotion Office, and the Italy-China Foundation for Development signed a trilateral cooperation agreement, aiming to establish a close communication bridge between Shanghai and Italian enterprises. Through this partnership, they will provide precise, timely, and high-quality services to facilitate the settlement of enterprises using the “New Friends” initiative.
To ensure that Italian companies understand Shanghai’s industrial development positioning and spatial planning, it is essential to proactively communicate our industrial strengths, development potential, and investment opportunities through our partners. Mutual understanding is the first step towards cooperation. Clearly, Shanghai has taken solid steps forward.
According to Xu Ming, Director of the Industrial Investment Division of the Shanghai Economic and Information Commission, the next step will involve the Economic and Information Commission of the municipality, along with the Investment Promotion Service Center of the municipality, jointly coordinating with relevant units to organize a series of overseas investment promotion events. These events aim to showcase Shanghai’s future development opportunities on the global stage and vigorously promote the strongest message of ‘Invest in Shanghai.
This event will explore the full potential for deepening bilateral cooperation in the industrial sector, promoting the bidirectional flow of industry resources such as capital, talent, and technology. Leveraging Shanghai’s global resource allocation capabilities and its role in connecting domestic and international dual circulation strategies, the event aims to actively attract more high-quality Italian enterprises to invest in Shanghai, establish a presence in China, and promote deeper and more substantial economic and trade cooperation between the two countries, achieving mutual development.
The event is organized by the Office of the Leading Group for Investment Promotion of Shanghai Municipality, co-hosted by the Shanghai Investment Promotion Service Center and the Baoshan District Investment Promotion Office, with collaboration from the Italy-China Foundation and the Sino Italian Innovation Center. Partners such as PwC and the Italy Asia Promotion Company are providing support.
Officials from the Shanghai Biomedical Industry Promotion Center, Baoshan District Investment Promotion Office, and representatives from relevant Italian business associations attended the event.
Editor | 陈思婕