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Foreign businesses keep faith in Shanghai's potential

China Daily| Updated: December 29, 2023

Amid fluctuations in the global economy, Chinese metropolis remains a safe bet for investors and companies across the world

Shanghai, which has been committed to "five centers" construction — to build itself into an international center for economy, finance, trade, shipping and sci-tech innovation — will continue to extend a warm welcome to global investors and provide fertile ground for enterprises to realize their ambitions.

According to Chen Jining, Party secretary of Shanghai, who attended the "Invest In China Year" and Shanghai City Promotion at the 2023 China International Import Expo on Nov 5, the city is a window through which the world will see China's steps in opening-up and the strong economic prospects and opportunities generated by Chinese modernization.

The Shanghai government will draw strength from Shanghai's spirit — openness, innovation and inclusiveness — to promote development in all aspects of life, including the creation of the service trade innovation demonstration zone and the Silk Road e-commerce pilot zone, and support integration of the chains of innovation, industry, capital and talent.

"We welcome global businesses to invest and start ventures in Shanghai to unlock the potential for innovation and entrepreneurship, immerse themselves in the city's distinctive allure and collaborate with us as we pave the way toward a brighter future," Chen said.

According to Chen, the development of Shanghai's economy showed resilience and vitality in 2023. The city's GDP grew at 6 percent year-on-year in the first three quarters and some 353,000 new enterprises set up base in Shanghai, up 42 percent year-on-year.

"Shanghai is a charming city full of hope and unlimited opportunities, and it is a land for entrepreneurs to pursue their dreams and make a career. We will continue to create a first-class business environment that is market-oriented, law-based and internationalized, provide accurate, convenient and innovative high-quality services, and work hand in hand with everybody to create an open and prosperous future," said Gong Zheng, mayor of Shanghai.

As of the end of September, Shanghai was home to 940 multinational corporations' regional headquarters and 551 foreign-funded research and development centers. The city has been gaining popularity among foreign investors and multinational corporations, Gong said.

Smooth sailing

MSC Mediterranean Shipping Company SA, one of the world's largest container shipping companies headquartered in Geneva of Switzerland, entered China in 1998 and set up its first office in Shanghai. Leveraging the rapid growth of the Chinese shipping industry, MSC has experienced remarkable expansion over the past 25 years. At present, the company boasts an extensive network of 27 offices throughout the Chinese mainland, bolstered by a dedicated workforce of more than 1,300 employees.

"MSC calls at around 20 ports in China, operating more than 40 mainline services and 10 intra-Asia routes, connecting businesses in China with the world," said Jonathan Zhu, managing director of MSC Greater China.

Shanghai, which is on track to be an international shipping center and where the company has deep roots in the nation, plays a vital role in supporting MSC's expansion in China, according to Zhu.

"As shipping is one of Shanghai's key focal points for development, we are fully committed to aligning ourselves with the city's goals. Shanghai boasts a robust business environment, characterized by remarkable strengths in marketization, rule of law and internationalization. These advantages provide a fertile ground for all types of enterprises, including foreign-funded companies, to thrive and expand swiftly," said Zhu.

The city's inclusiveness and openness also make it stand out as an ideal business destination for global companies, according to Zhu.

"Shanghai has long been a cosmopolitan city with a strong sense of inclusiveness, which gives multicultural multinational companies a good foundation for development. In the face of competition in the global market, China has the advantages of talent, policy and efficiency, and Shanghai's advantages are even more apparent as it is at the forefront of China's reform and opening-up," Zhu said.

Zhu said MSC will continue to expand its investment and provide leading and forward-looking supply chain solutions to the Chinese market.

"We will continue to increase investments in new areas and collaborate with more partners to promote the development of the shipping industry as well as support Shanghai in becoming an international shipping center," said Zhu. "We are confident that the Chinese market will bring even more and bigger development opportunities for enterprises, and we look forward to continuing to develop together with China and Shanghai to create a better future."

Unwavering commitment

Over the decades, Covestro has fostered an exceptional level of collaboration with China, spanning a wide spectrum of business operations encompassing R&D, manufacturing and sales. As of the end of 2022, the company's investment in the Chinese market had totaled 3.9 billion euros ($4.29 billion). With sales of 3.6 billion euros in 2022, China contributes one-fifth of Covestro's global total, according to Holly Lei, senior vice-president of Covestro Group and president of Covestro China.

According to Lei, Shanghai is one of the main investment destinations of Covestro China. The megacity is home to Covestro's largest production site as well as its Asia-Pacific innovation center. Also the global headquarters of the company's engineering plastics section is based in the city. In recent months, several new production facilities have been inaugurated at the production site there, including a line for the mechanical recycling of polycarbonates.

In the first quarter of 2024, Covestro will put into operation a new polyurethane dispersions plant in Shanghai to enhance the production of raw materials for coatings and adhesives, meeting client requirements in the transportation, construction, furniture, footwear and packaging sectors. The plant will also help the company capture growth opportunities of waterborne systems in the Asia-Pacific region.

In the coming years, Covestro will continue to embrace emerging opportunities from the circular economy in China, according to Lei. It will catalyze fresh business momentum in dynamic markets like electric vehicles, wind energy, photovoltaics, consumer electronics and construction with regard to the circular economy to support China achieving peak carbon emissions before 2030 and carbon neutrality before 2060.

"We believe that China will lead the way in high-quality growth, vibrant innovation and a green transition. Covestro remains deeply committed to this remarkable nation, where our primary focus will continue to revolve around strategic investments, innovation and sustainable development. We are thrilled by the immense potential and opportunities for even closer collaboration with our valued partners," Lei said.

Challenging yet spirited

The 2010 Shanghai Expo took place in the city from May to October that year, serving as a global showcase for practices centered around the theme of "Better City, Better Life." It provided a valuable platform for exchanging ideas on how to enhance urban living standards. The former site of the expo, spanning 5.28 square kilometers, including 3.93 sq km in the Pudong New Area of Shanghai, has been transformed into a vibrant hub that integrates a central business district, parks, green belts and cultural demonstration areas. It has become a gathering place for global leading businesses, fostering innovation and collaboration.

South Korean enterprise SK Group's Chinese landmark project Shanghai SK Tower is located in the Pudong site of the 2010 Shanghai Expo. The super high-rise building of 280 meters, has a total floor area of 200,345 square meters. So far, the tower is home to the East China regional headquarters of SK Group with nine subsidiary companies such as SK China, SK geo centric, SK hynix, SK on, SK ie technology, SK energy, SK siltron, SK Biopharmaceuticals and SKC. It has also attracted more than 50 international enterprises from various industries including new energy, biopharmaceuticals and financial services.

"In 2021, the completion of Shanghai SK Tower not only marked the 30th anniversary of SK Group's entry to China and its huge investments; the branding of the building and move-in of SK Group subsidiaries have reiterated the confidence and determination of SK Group on continued investment in China," said Susan Du, general manager of Shanghai SKY Real Estate Development.

According to Du, despite global market uncertainties, China remains a magnet for foreign capital including SK Group, and Shanghai will still be a promising land for foreign enterprises.

"Acknowledging the impact of the three-year pandemic, it is evident that the global economy is currently confronting unparalleled challenges, including high inflation, geopolitical conflicts, deglobalization, and the decoupling between China and the United States. As a result, the path to recovery remains uncertain. However, when considering the medium to long-term outlook, we maintain a positive stance on the future of China," said Du.

"Shanghai is the most metropolitan city in China and aims to become an economic, financial, trade, shipping and innovation hub with global influence. Its top-class infrastructure, excellent industrial chain, forward-looking vision and planning, plus favorable policies all make the city a fertile land for international enterprises to grow sustainably," Du added.

"For us, Shanghai SK Tower is a long-term investment thus (it) will not be shaken by short-term fluctuations. Our vision is for the better and for the future. At difficult times, we are more committed to providing better facilities and services to our clients. Thus we are not seeking tenants, but long-term partners."


From left: A production site of Covestro in Shanghai. SK Group's Chinese landmark project Shanghai SK Tower is located in the Pudong New Area of Shanghai. MSC Mediterranean Shipping Company SA sets up its first Chinese office in Shanghai. CHINA DAILY


A birds' eye view of Shanghai. GAO ERQIANG/CHINA DAILY


Shanghai hosts the "Invest In China Year" and Shanghai City Promotion to extend a warm welcome to global investors in November. CHINA DAILY

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