Shanghai maintains strong foreign investment

International companies show confidence in Chinese market resilience

Foreign investment maintained steady growth in Shanghai in the first half of 2020, reflecting the confidence of foreign investors in the resilience of the Chinese market amid the global economic slowdown due to the COVID-19 pandemic.

According to statistics from the Shanghai government, the city received $10.28 billion in foreign investment in the first six months of 2020, an increase of 5.4 percent based on the same period in 2019.

As of June 30, the city is home to 746 regional headquarters of multinational companies, up by 26 from last year. The total number of foreign-invested research and development centers is now 471, an increase of 10 from 2019.

A total of 54 foreign investment projects with a combined contracted value of $8 billion were inked in Shanghai on July 22, among which 15 are related to new infrastructure construction, artificial intelligence, internet technology, pharmaceuticals and integrated circuits.

According to Xu Kunlin, vice-mayor of Shanghai, the slew of projects signals companies' determination and confidence in China and in Shanghai.

"The city has a complete set of infrastructure, an environment that respects the rule of law, and an efficient government, on top of a multitude of talents, all of which are integral to a company's growth and development," said Philippe Snel, China representative of PRD Group.

Fengxian online

Aiming for more foreign investors, the Shanghai government and all lower-level governments in the city have made great efforts in supporting them in the first half of 2020.

Fengxian district, a traditional manufacturing hub in Shanghai, has paid great attention to organizing online promotions to keep global investors in contact amid the pandemic, district officials said.

"We hosted 76 online promotions in the first half of 2020 and attracted an audience of about 25.6 million," said Gu Weixing, director of the investment promotion office of Fengxian and the Oriental Beauty Valley industry promotion office. "More than 1,300 foreign investors' information has been collected from those online events."

A WeChat platform, named Invest Fengxian Cloud, which allows potential investors to obtain detailed information about parcels of land including total area, location, rental and function, began operation in November. There are staff members to answer investors' inquiries and provide them with investment information, according to Shao Xudong, deputy director of the investment promotion office of Fengxian.

"We are constructing a Taobao-like platform so investors can select sites in Fengxian online," Shao said.

"Compared to other districts, Fengxian has not always had high-profile projects, but we will spare no effort to strengthen communication and settle new projects in the region," Gu said.

Oriental Beauty Valley

In recent years, Fengxian has paid much attention to developing its beauty and health industry and initiated the Oriental Beauty Valley construction project in 2015 to support economic upgrading and transformation.

According to Gu, the Oriental Beauty Valley, or OBV, is different from traditional industrial parks and economic development zones which are comprised of new buildings and factories in a designated area.

"The Oriental Beauty Valley is a concept to cover the whole area of Fengxian and will take the beauty and health industry as the core, and it is a beauty and health alliance with multiple industries," Gu said. "Fengxian wants to create a beauty and health industrial cluster that covers all related industries such as skincare products, perfumes, daily consumer chemicals, biomedicine, food and healthcare products."

Construction on the OBV has recorded significant breakthroughs.

As of the end of 2019, it was home to 131 large-scale enterprises, which each have an annual operating income of 20 million yuan ($2.9 million). Beauty products under more than 3,000 brands, including Nu Skin and Cosmax, are produced in the valley. About 25 percent of all facial masks used in China are produced in the OBV.

In March, cosmetics company Shiseido announced the setup of a research facility in the valley to drive innovation. The Shiseido site will focus on environmental and sustainability-related research and share resources with partners in the valley.

Wuxi Apptec's new site in Fengxian, covering 10.4 hectares, has been completed. The site will provide research and development services to global businesses.

A space, specially designed for the Institute Pasteur of Shanghai under the Chinese Academy of Sciences, is ready to debut.

For companies, Fengxian is one of the few places in Shanghai that have irreplaceable offerings, according to local authorities. They are: the gathering of key industry players, premium government service, strong policy support for businesses and talent, well-developed facilities and infrastructures, and it is part of the Lingang Special Area of the China (Shanghai) Pilot Free Trade Zone.

"Brands can quickly settle down, implement their plans and turn dreams into reality in Fengxian because the valley has all the resources they needed－from R&D to market," said Yuan Fei, general manager of the OBV Group. The group is responsible for the valley's development, management and investment promotion.

The annual Oriental Beauty Valley International Cosmetics Conference is also making Fengxian known to the world. First held in 2018, the conference has become one of the most important beauty industrial gatherings in China. The 2019 event attracted representatives from 30 global cosmetic groups, including L'Oreal, Estee Lauder and Shiseido.

Bright future

It is estimated that by 2025, the overall industrial output value of the OBV will reach 100 billion yuan, almost double its current figure. Fengxian will have a complete beauty and health industrial chain that covers design, R&D, smart manufacturing, quarantine and testing, exhibitions and trade. It will be one of the largest beauty and health industry clusters in Asia, with all companies owning independent intellectual property rights, according to the district government.

Apart from the health and beauty industry, Fengxian is encouraging development in biomedicine, advanced manufacturing, new energy vehicles and emerging industries. Currently, the district boasts more than 150 biopharmaceutical enterprises and 130 automobile parts suppliers.

So far, Fengxian boasts about 80 square kilometers of industrial land, which can serve different needs of companies, according to the local government.

tangzhihao@chinadaily.com.cn