Foreign companies eye continuous growth in China’s Pudong despite a rising tide against globalization

By GT staff reporters Source:Global Times Published: 2020/4/19 19:38:40

A resident walks through the overpass at Lujiazui area of Pudong, one of the influential financial centers in China. Photo: Yang Hui/GT

In midst of the COVID-19 pandemic and a rising tide against international cooperation, Shanghai's Pudong New Area has shown no sign of closing its doors to foreign investment and enterprises. In just three decades, Pudong has transformed from a desolate land plot into one of the most developed, technologically advanced regions in the world. 

Just 10 days before it celebrated its 30th anniversary of development and opening-up on Saturday, Pudong became home to eight regional headquarters of overseas companies from biomedicine, AI, intelligent manufacturing and digital information technology sectors. It now boasts more than 600 regional headquarters of overseas companies and overseas-invested research centers.

Despite the unprecedented impact of the COVID-19 pandemic, 21 key foreign investment projects, collectively worth more than $1.7 billion, were established in Pudong in late February. Back in 2019, the district had introduced a total of $8.77 billion foreign investment.

Pudong achieved a GDP aggregate of 1.273 trillion yuan ($180 billion) in 2019, about 212 times more than the 6 billion yuan in 1990. 

Observers noted Pudong's open and inclusive attitude toward foreign companies and investment has contributed to its rapid growth over the past three decades, an approach which is winning worldwide attention.

Improving business environment

Experts and foreign companies approached by the Global Times gave much credit to Pudong's improving business environment, favorable policies, transparent business policies for fair competition and competitive talent resources.

Johnson & Johnson China launched its largest, and the Asia-Pacific region's first innovation incubator in Pudong's Zhangjiang Hi-Tech Park in June 2019. Will Song, chairman of the company, told the Global Times that it has received support from the Pudong government for the incubator project, which aims to accelerate innovation and R&D in healthcare.

"We are pleased to see the government puts forward multiple favorable policies, to support the development of an open, transparent and fair business environment that attracts and retains foreign investment," Song noted.

"Located in Zhangjiang, we're just hundreds of feet away from entrepreneurs, scientists, universities and other key players," Song said, adding that it's a vivid example of how Pudong serves to nurture an ecosystem that brings together innovators.

Like Johnson and Johnson China, pharmaceutical multinational AstraZeneca also benefited from Pudong's strong engagement in innovation. "AstraZeneca has gained great help and supports from the innovation policies in Zhangjiang of Pudong, such as its fast review and approval procedures and talent encouraging mechanism," said Leon Wang, executive vice president, International and China President at AstraZeneca.

"These policies have promoted the mutual integration of foreign enterprises and local economy to achieve a win-win situation," Wang noted.

The pharmaceutical giant set up its China headquarters in Pudong's Zhangjiang Hi-Tech park in 2012. It also built its Innovation Center China in Pudong.

For some foreign companies in Pudong, innovation in local mechanisms has also provided good examples for their business operations outside China. Fabrice Megarbane, President and CEO of L'Oréal China told global Times that, to facilitate product import, local authorities formulated a convenient policy for custom clearance of cosmetics samples.

The policy is called green channel internally by L'Oréal China, Megarbane said, and the group's R&D center in India later formulated the Indian version of green channel based on the practice in China.

Zhang Jun, dean of the School of Economics of Fudan University, said Pudong is very competitive in talent resources, especially high-level talents, compared with some other domestic economic hubs. 

This is echoed by Hidefumi Mizutani, Managing Director of Itochu Shanghai LTD, a Japanese trade and investment company which is the first wholly foreign-owned enterprise in Pudong since its opening up. "Pudong enjoys rich talent resources, which are critical in doing business," Mizutani told the Global Times. 

Remaining attractive

Despite the economic slowdown amid the pandemic, experts noted that Pudong will continue attracting foreign investment in creative industries including finance, trade, and technology.

Foreign companies approached by the Global Times also shared their determination toward their future development in Pudong as they express hope for the big picture regarding Pudong's potential.

"As a new area in Shanghai, Pudong enjoyed good development prospects with its vast space and numerous business opportunities," Huang Jianzhong, dean of International Business School in Shanghai University of International Business and Economics, told the Global Times.

Will Song with Johnson and Johnson China said he believes that Pudong will continue serving as the investment focus, innovation incubator and scientific R&D hotspot, which further contributes to Shanghai development as a regional innovation.

The financial innovation that Lujiazui in Pudong leads and plays an irreplaceable role in bringing in foreign investment and developing financial markets in Pudong and the whole country, said Citibank China in a note to the Global Times.

The firm believes that Shanghai and its Pudong district will remain the frontier of China's economic growth and innovation. 

Mizutani, the Managing Director of Itochu Shanghai LTD, added that his company plans to set up some of their future investing projects in its new areas like Lingang Industrial Zone where Pudong is now vigorously exploring, and gradually expanding their investment to the whole Yangtze River Delta.

"Pudong is located in Shanghai, the most open place in Asia. It has Shanghai's typical spirit of pursing openness and diversity," he noted.


Newspaper headline: Cosmopolitan cradle

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