Many more overseas companies will follow in the steps of Tesla to set up plants in Shanghai once they see how the U.S. carmaker benefits from the city's policy bonus, as the Shanghai municipal government opens markets to overseas investors with the continuous launch of new policies, experts said on Sunday.
Which will be the next "star project" in Shanghai after Tesla? Global robotics giant ABB is one overseas company mentioned by Ying Yong, mayor of Shanghai, in the government work report released on Sunday morning during the city's two sessions, as he called the roll of several projects that the government will push for construction this year.
ABB earlier revealed its plans to the media, saying that it's planning to establish a plant in Shanghai using robots to produce robots, according to a report by yicai.com in October. ABB didn't disclose its Shanghai plant's current status as of press time.
The other two companies mentioned by Ying are Shanghai-based biomedical firm Haohai Biological Technology and ACM Research, also based in Shanghai, reported the Shanghai Securities News over the weekend.
Shanghai will also speed up mass production of major domestic industrial projects like Semiconductor Manufacturing International Corp and Everdisplay Optronics' second phase, Ying disclosed.
"Even though the current global environment is tough for cross-border trade and investment, a lot of overseas investors are analyzing where the future market lies. China apparently is one of the answers to this question. When overseas investors see how Chinese tycoons like Jack Ma make money from China's burgeoning market, how can they not choose to invest in China? Particularly in Shanghai, with its residents' strong spending power and burgeoning middle class?" Sun Lijian, an economics professor at Fudan University, told the Global Times over the weekend.
Tesla, which held a groundbreaking ceremony for its Shanghai factory a few weeks ago, has become a "star project" that attracted high attention from the Chinese government, with Chinese Premier Li Keqiang meeting Tesla CEO Elon Musk to deliver congratulations on the investment, news.china.com.cn reported on January 10.
"I think Tesla should become a kind of beacon that draws similar overseas companies to Shanghai," Sun said.
Ying's comments also reflect a trend of the Shanghai municipal government to attract overseas high-tech companies to the city, experts said.
"Shanghai is not the place for labor-intensive manufacturing, with its rising labor costs. It's the place for high-tech industries and services industries," Zhou Yu, director of the international finance research center at the Shanghai Academy of Social Sciences, told the Global Times on Sunday.
Ying also mentioned in the report that Shanghai will speed up the implementation of industry policies in sectors like integrated circuits, artificial intelligence and biomedicine.
In Sun's view, Shanghai will not block traditional low-added-value companies, but what Ying said is a kind of "reminder" that such investment is unlikely to succeed in Shanghai.
According to the Shanghai municipal government's public WeChat account Shanghai Announcement, Shanghai last year further eased market access for overseas investors by reducing management measures and shortening the time for cargo clearance.
In 2018, 45 multinational companies set up regional headquarters in Shanghai, while 15 overseas companies founded new research and development centers in the city.
"From what I see, policies for overseas investment are 'in place' in Shanghai, as the local government fears that it might lose important investors or even the whole industrial chain with Chinese cities' fierce competition for overseas investors," Sun said. "In the future, more policies will be launched by the local government to provide support services for overseas investors to help them deal with problems like accommodation, healthcare and public transportation."
