Shanghai has long held plans to develop itself into a global center of finance, trade, commerce and shipping by 2020 – the so-called ‘four centers’ initiative. More recently it has added a further plan to become a global hub for innovation and research and development.
Wanting to maintain its manufacturing competitiveness, Shanghai is striving to become a leader of China Manufacturing 2025.
Yet, any progress with these plans can only be achieved by creating an open and attractive environment in which to live and work, particularly in the innovation-driven economy that Shanghai aims to become: clarifying the financial incentives framework to encourage foreign investment in R&D, updating visa policies to attract foreign, high-level talent as well as generally improving Shanghai’s quality of life are all issues that the local government needs to address.
This will require close coordination between Shanghai and the central governments.
Strong support of foreign business
“In order for it to succeed in its ambitious goal to be a global centre, Shanghai will need the strong support and participation of foreign businesses, investment and talent,” says European Chamber Shanghai Chapter Chairman Michael Adams.
“While it is clearly a leading Chinese city, there is still much to do at both local and central government levels if Shanghai is to compete effectively on the global stage.
“Critical to Shanghai’s ambitions will be whether the city remains attractive to global talent. Ensuring that it does so, will require raising the quality of life in the city and further opening the regime for the issuance of visas, working permits and hukou.”
Advocate for capital market and reforms
Shanghai’s plans to become a global financial center by 2020, to rival London and New York, face particular challenges – not least because of the slow progress being made at the central level to reform China’s financial system.
The city must continue advocating for capital market as well as institutional and regulatory reforms. The need for such reforms is amply demonstrated by the badly communicated responses to last year’s stock market volatility as well as the ongoing issues surrounding the prevalent window guidance approach to regulation.
The latter issue causes a great deal of uncertainty for companies and is detrimental to the standing of Shanghai as an international marketplace for financial services.
The European Union Chamber of Commerce in China has published its Shanghai Position Paper 2016/2017. This second edition of the Shanghai Position Paper evaluates Shanghai’s ongoing development and provides recommendations from European business invested in the city on how it can best realise its ambition to become a global center.
Specifically, the paper discusses how Shanghai can increase its standing as a global innovation centre, foster its manufacturing competitiveness, become more important for global finance, improve its quality of life and gather the best global talent in the city.