News

December 15, 2017

Gateway to a free trade zone

The central government’s approval to launch a pilot free trade zone in Pudong has provided an enormous economic boost to the new area and Shanghai.

Facing the Pacific to the east, the Chinese coastline is like a giant open bow and the Yangtze River is like an arrow. It is Shanghai, or more specifically Pudong, at the crossing of the arrow and the bow. The big river rushes to the ocean.

During a recent visit to the city’s east coast, Pudong’s Party secretary Weng Zuliang and Shanghai’s top leadership studied the construction plan of a free trade port on the basis of the China (Shanghai) Pilot Free Trade Zone.

In Weng’s opinion, the pilot reforms in the Shanghai FTZ highlight institutional innovation to generate a replicated and promotable experience.

Through years of reform, there have been over 100 innovative institutions promoted nationwide.

“China is facing an increasingly complex situation at home and abroad,” said the London headquartered  multinational professional services network PricewaterhouseCoopers. “International investment rules and trade systems are being reshaped. The reforms in the Shanghai FTZ as a national experiment has become an important driving force for China’s reform and opening up.”

One week after Shanghai’s new Party secretary Li Qiang took office, he launched a study visit in Pudong. “Pudong should be the benchmark for the reform and opening up, and the innovation and development of the nation in the new era,” said Li. “It should begin at a new higher starting point and become a vanguard of vanguards, a forerunner of the forerunners with greater responsibility and a better state of mind.”

 

 

Headquarters economy

The new area has become home to more than 400 corporate headquarters. Among these, 265 are regional headquarters of multinational conglomerates — representing nearly half of the total number in Shanghai — while the rest are head offices or regional headquarters of domestic enterprises.

The “headquarters economy” has helped Pudong transform and upgrade its economy and enabled the area to participate in the allocation of resources from home and abroad.

Multinational enterprises take a global approach to foreign markets and production. More and more transnational corporations are taking part in the construction of the Shanghai FTZ. They also act as bridges between domestic and overseas resources and markets.

Honeywell International Inc, an American multinational conglomerate company that produces a variety of commercial and consumer products, engineering services and aerospace systems, has established its China R&D center in Zhangjiang.

 

Science city

Pudong’s confidence also comes from innovation. The recently released “Construction Plan of Zhangjiang Science City” revealed that the high-tech park will become an administrative subdistrict, as part of a national strategy to establish Zhangjiang Comprehensive National Scientific Center.

The science city has ambitions to be on a par with California’s Silicon Valley, Singapore’s One North Science Park and the Japanese Tsukuba scientific town, amid the ongoing construction of a number of major scientific and technological infrastructure, such as the second phase of the Shanghai Synchrotron Radiation Facility and the Shanghai Superintense-Ultrafast Lasers Facility. And it will establish a basic framework for a comprehensive national scientific center by 2020.

 

FTZ providing a conduit for China’s Belt and Road initiative

Meanwhile, Zhangjiang has attracted the world’s top researchers. Nobel laureates Bernard L. Feringa and Kurt Wüthrich have been granted Chinese “green cards” after both of them filed applications for permanent residency in Shanghai. The management board of Zhangjiang has issued recommendations for 30 high-level talents.

At the assembly hall of the Commercial Aircraft Corporation of China, the second plane of China’s self-developed passenger jet C919 is preparing for its maiden flight.

COMAC has so far secured 730 orders from 27 foreign and domestic customers, including national carrier Air China and leasing company GE Capital Aviation Service.

Shanghai Zhenhua Heavy Industries Co, whose headquarters are at Dongfang Road, tailored the port handling system for the automated port which is the largest in the world in terms of both scale and size. The company is upgrading itself from a manufacturer to solution provider when it helps “Belt and Road” countries improve their port management.

The Shanghai FTZ is striving to become a bridgehead for the country’s “Belt and Road” initiative and help domestic companies channel investment overseas.

At 310 Fasai Road, in Waigaoqiao bonded area, vegetables from Macedonia, roses from Bulgaria are being displayed. The 16-nation Eastern and Central European Pavilion introduces green agriculture, manufacturing technologies and fine minerals from the 16 countries to the Chinese market. It also brings tourism resources from these countries into China.

Eleven wineries from Azerbaijan have been introduced to be exhibited at the pavilion. “We hope the pavilion is a window through which Chinese consumers can see the world while medium and small businesses from overseas can reach the Chinese market,” said Yu Yong, general manager of Waigaoqiao Group.