Foreign funds flow into Shanghai
4,105 projects received funding from overseas investors in first 7 months
SHANGHAI - Foreign investors have increased their investments in Shanghai, giving a solid vote of confidence to China's market potential and further opening-up despite a background of global economic uncertainties.
The country's financial and business center reported an actual use of foreign investment of $11.45 billion in the January-July period of 2019, up 13.8 percent year-on-year, the Shanghai Municipal Commission of Commerce said.
During the period, a total of 4,105 foreign-funded projects were established, up 58.3 percent over the same period in 2018.
The new policies pledge more free capital flows and intellectual property rights protection for the regional headquarters of multinational corporations, said Yang Chao, deputy director of the municipal commission of commerce.
"Facing external uncertainties, China has been unswervingly opening to the outside world to increase its resilience to risks and shoulder its responsibility as a major country," said Wang Xiaosong, a research fellow with the National Academy of Development and Strategy under Renmin University of China.
Covestro, a global chemicals giant that has been in China for nearly 20 years, is planning to upgrade its China headquarters in Shanghai to its Asia-Pacific headquarters.
Holly Lei, president of Covestro China, said after the move, the company could better coordinate global resources to grow together with China.
China is Covestro's biggest single market and Shanghai is home to its largest plant while housing its Asia-Pacific innovation center, said Lei.
Covestro is not alone in terms of expanding its business ambitions in the world's second-largest economy.
French carmaker PSA Peugeot Citroen plans to set up a regional procurement center in Shanghai. German chemicals giant BASF has increased investment to upgrade its innovation center in Shanghai after investing in a $10 billion production facility in Zhanjiang. The city is also home to Tesla's gigafactory, which is under construction with an investment of over 50 billion yuan ($7.1 billion).
Investments from the European Union, Singapore, Japan and countries included in the Belt and Road Initiative all grew at double-digit rates in the first half and the investment structure is being optimized, said Hua Yuan, director of the municipal commission of commerce.
The high-tech service industry reported an actual use of foreign investment of $1.7 billion in the first six months, posting a hefty annual growth of 29.6 percent, said Hua.
A series of opening-up measures in multiple fields and industries and the improving business environment has ramped up foreign investment interests in China.
In June, China rolled out revised negative lists for foreign investment market access, allowing foreign investors to run majority-share or wholly-owned businesses in several sectors.
China expanded the Shanghai free trade zone this month by building the new Lingang area into a special economic zone that is competitive and globally influential.
Shanghai has also rolled out a series of policies to further open the service industry to foreign investors and promote the development of regional headquarters of multinational corporations.
"The status as a special economic function zone means that it is not adding more facilitation but moving toward real investment and trade liberalization," said Shen Yuliang, a researcher with the Institute of World Economics under the Shanghai Academy of Social Sciences.