Lin-gang a hothouse for incubating success, pioneering tech

Special area in Shanghai taking innovative approaches to develop industries, attract talent

In late June, China's first independent car design company IAT Auto signed an investment framework agreement with Lin-gang Special Area to conduct its automotive research and development, manufacturing and export operations.

Xuan Qiwu, chairman of IAT Auto, which has worked with over 80 industry leaders including Honda, SAIC Motor and Li Auto for the past 17 years, said there were major reasons the company was setting up in the special area section of the China (Shanghai) Pilot Free Trade Zone.

Apart from an extensive transportation network linking Lingang to the rest of the country and the world, various opening-up policies introduced to improve global competitiveness were good incentives for the company to expand its footprint there, he said.

IAT's new facility will be located in Lin-gang's Yangshan Special Comprehensive Bonded Zone.

The bonded zone has already attracted a large number of well-established overseas carmakers such as BMW and Fiat Chrysler Automobiles to build design hubs, and international centralized procurement and distribution centers for auto parts. Establishing itself in the zone is expected to accelerate IAT's internationalization, as Chinese automotive companies become more outward looking, Xuan said.

Apart from overseas companies, Lin-gang is also home to a large number of domestic companies in the auto industry chain. The possibility of working with more companies is another major reason IAT was attracted to the area, Xuan said.

In 2023, more than 1.1 million intelligent connected cars were churned out in Lin-gang, with the industry's annual output exceeding 300 billion yuan ($41.9 billion), which is 10 times the size in 2019.

Big players, big benefits

U.S. electric vehicle maker Tesla can take a big part of the credit for progress made by the industry in Lin-gang. By launching a gigafactory in Lin-gang in 2018, Tesla helped build a full industry chain for intelligent connected car manufacturing in the special area.

More than 180 companies have been providing auto parts or services to Tesla's gigafactory. Of those, 105 are based in 24 cities in the wider Yangtze River Delta region. Tesla's 40 gigawatt-hour energy storage project, also located in Lin-gang, is scheduled to be operational by the end of this year.

With a whopping 50 billion yuan in investment, Tesla's gigafactory is the largest foreign-invested manufacturing project in Shanghai.

More significantly, the massive project involved large and complicated construction work, which in the past usually resulted in a lengthy process to complete administrative approval.

However, Lin-gang allowed Tesla to start construction first and submit the documents later, as long as all the approval procedures were ultimately met. This allowed Tesla to start construction of the facility, put it into use as soon as possible, and churn out the inaugural vehicle in the first year of the factory's operation.

Wu Xiaohua, deputy-secretary of the Party working committee of the Lin-gang Special Area, said the seemingly miraculous speed at which Tesla achieved this feat reflected Lin-gang's dedication to improving the business environment. This also gave the market a glimpse of China's resolve, and the actions taken to expand the country's opening-up.

Tesla's vice-president Tao Lin said the multiple institutional innovations introduced in Lin-gang were another major reason Tesla's operations were galloping ahead there.

"The institutional advantages not only help companies land new projects rapidly, but provide nonstop vitality for the companies' operations, which is as important," she said.

Over the past five years, Lin-gang has realized 138 institutional innovative cases covering free trade, investment, cross-border finance and high-end shipping. Just as importantly, 70 of these cases were the first of their kind in China.

Boeing Shanghai Aviation Services' modification and maintenance businesses in Lin-gang is one of the latest, and best, examples of institutional innovation.

On June 20, the project set a record for Shanghai by completing the process of signing land contracts, gaining construction permits and starting operations within five hours.

To make that possible, Boeing Shanghai took advantage of 13 policies relating to engineering construction projects from Lin-gang's latest review and reform measures.

The presence of the industry giant will help Lin-gang expand the civil aviation industry, one of four frontier industries targeted in its development along with integrated circuits, artificial intelligence and biomedicine.