Foreign businesses choosing Shanghai as national hub

BEIJING, Dec. 10, 2024 /PRNewswire/ -- A news report from chinadaily.com.cn:

In July 1980, Swiss elevator manufacturer Schindler opened a production site in Shanghai, marking the establishment of the city's first Sino-foreign joint venture since China's reform and opening-up in 1978.

Since then, Shanghai, known for its inclusive, elegant, innovative and efficient approach in all aspects of society, has witnessed a continuous increase in the number of foreign businesses. The city has become one of the most sought-after business destinations for foreign investors with the number of such businesses hitting 75,000. The foreign economy has become a pillar of the city's development.

To foster the expansion of foreign-funded enterprises and attract foreign investments, the city government has been implementing initiatives to strengthen industrial transformation and spearhead innovative development and service frameworks.

Under the guidance of the municipal government, districts and industrial parks in the city have implemented measures to elevate service standards and generate increased opportunities to assist foreign investors in realizing the country's untapped potential. The Shanghai Xinzhuang Industrial Park, established in 1995 in Minhang district, has stood out among its peers in recent years.

According to Lin Yi, secretary of the Party working committee of the industrial park and executive deputy director of the management committee of the park, the industrial park established in 1995 is home to nearly 600 foreign-invested enterprises including 57 Fortune 500 companies. It had its comprehensive development index ranked third among 108 development zones in Shanghai for five consecutive years from 2018.

"Most foreign companies in the SHXIP engage in high-end industries such as biopharmaceuticals, automobiles, new materials and fine chemicals. A total of 30 foreign-invested research and development centers have been settled in the industrial park," Lin said. "In 2023, about 71 percent of tax income and 76 percent of industrial output value of the SHXIP was contributed by foreign businesses."

Despite market uncertainties over the past three years, the industrial park has remained a favored investment hub in Shanghai. Foreign companies like Schunk from Germany and Straumann Group from Switzerland, initially established their presence in the industrial park as foreign trading entities, and subsequently upgraded their operations to include production facilities.

"There are 12 ongoing foreign-invested business expansion projects in the SHXIP, with a combined investment of $2.1 billion. Upon their completion, these initiatives are projected to generate an annual industrial output value of 6.9 billion yuan ($948 million)," Lin said.

Bullish on future

Schunk, a German technology leader in tool holding and work holding, gripping and automation technology, opened a new 7,200-square-meter location at the SHXIP in September. The site combines production and R&D facilities under one roof. It is the first of its kind in the Asia-Pacific region and the third outside Europe built by Schunk.

"The new production site will allow us to react to local demand more quickly and efficiently, as well as develop specific solutions in direct contact with Schunk's customers and partners. In addition, a fully equipped CoLab robot application center is also available, where automation concepts can be validated together with Schunk's experts, said Simon Du, general manager of Schunk Intec China.

According to Du, it is the third time for the company to expand and relocate the business in the SHXIP. In 2009, Schunk initiated its venture in China by establishing a small workshop in the SHXIP to offer assembly, warehousing, and distribution services to Chinese consumers.

In 2014, the company relocated to a larger space within the SHXIP, maintaining its focus on assembly, warehousing, and distribution services, with the objective of enhancing its ability to meet increasing demand for automation products.

Du said that the exceptional business environment and services offered within the SHXIP are pivotal in attracting and retaining Schunk. "The SHXIP serves as a hub for global manufacturing enterprises, with a significant number of our clients located nearby. This facilitates enhanced communication and client visits," said Du.

Du said that in recent years, SHXIP has also shifted its development philosophy to focus more on the integrated development of industry and urban life.

"The industrial park no longer looks like a typical industrial park. We can see a lot of open spaces to foster creativity, as well as many supporting auxiliary service facilities. Factories no longer feature high walls and noises," said Du.

The industrial park also offered substantial support during the construction of Schunk's new factory, helping to shorten the overall construction timeline to just one year.

"Having been rooted in the SHXIP for 15 years, my greatest realization regarding the park's services is that they will not disturb enterprises without cause, and they will strive to meet all necessary business requests raised by companies," said Du.

Over the last 15 years, Schunk has experienced remarkable sales revenue growth, increasing from 15 million yuan in 2009 to a peak of 360 million yuan in 2022.

Du said after the opening of the new production and research site, Schunk will strive to better serve its clients in precision manufacturing fields such as automobiles and pharmaceuticals.

"We expect to have higher growth rate, at least two digits, in the next five years."

Faurecia, a company of the Group Forvia, celebrated the opening of the second phase of its China headquarters building at the SHXIP in November 2023. The new building, covering an area of 1,000 sq m, is designed to host more than 400 staff members. The first phase of Faurecia's headquarters was built in the industrial park in 2013.

"Rooted in the Chinese market for more than 30 years, Faurecia has been on an evolving journey with the Chinese automotive industry. The inauguration of the Faurecia China headquarters new building is another important milestone for us in the Chinese market, helping us to accelerate our development process in China and shape safe, advanced, customized, and sustainable mobility experiences for the local markets," said Ma Chuan, president of Faurecia China.

The new building is not the only investment made by Faurecia in the SHXIP over the past year. In September, Faurecia established its exhaust control business in the park. Recognizing the opportunities in in-car electronic devices, Forvia relocated the headquarters of Faurecia Clarion Electronics from Japan to the SHXIP in November.

"Clarion will drive business development in China with a strong emphasis on innovation. Our goal is to double the annual sales revenue from 2024 to 2030," said Ma.

According to Ma, since its establishment in the SHXIP in 2013, the park has offered significant support to Faurecia, ranging from infrastructure construction to talent recruitment, and from fostering innovation to facilitating collaborative exchanges.

"The park has always prioritized our needs, providing comprehensive assistance to Faurecia's development," Ma said.

In recent years, Faurecia has been exploring hydrogen technologies to drive the mobility industry toward zero emissions. The Faurecia Hydrogen Solutions Holding was established in Shanghai this year to strengthen its commitment.

The SHXIP, dedicated to automobile industry chain development, has established a hydrogen energy industry alliance and a specialized service team for auto parts businesses to enhance collaboration and knowledge exchange.

"Being one of the founders of the hydrogen energy industry alliance, Faurecia got more opportunities for communication and collaboration with other enterprises throughout the hydrogen energy industry chain. This alliance not only enables us to swiftly understand the developmental dynamics and technological trends within the hydrogen energy industry but also provides robust support for our business expansion efforts in the field of hydrogen energy," said Ma.

A vote of confidence

In 2005, The Estee Lauder Companies set up a trade company in the SHXIP to import and distribute its cosmetic products in China. In 2020, the company made the strategic decision to centralize its supply chain operations in China, consolidating all related procedures within a distribution center situated at the SHXIP. The construction of this center, spanning nearly 67,000 square meters with a total investment of approximately 1.21 billion yuan, is scheduled for completion by the end of December.

"The project will have the most advanced automated logistics system, integrating omnichannel sales support; product warehousing and sorting; packaging and shipping under one roof; achieving full-chain automation and optimal resource allocation; empowering the integration of logistics processes and business upgrades for Estee Lauder China," said Joy Fan, president and CEO of The Estee Lauder Companies China.

In China, The Estee Lauder Companies believes the new economic stimulus measures present compelling medium to long-term growth potential, which strongly bolsters its confidence to expand its operation in the SHXIP.

"The SHXIP is the nearest city-level industrial park to the city center, boasting convenient transportation networks. It is a 20-minute drive from Hongqiao transportation hub and 45 minutes away from Pudong International Airport, facilitating communication and collaboration between businesses, clients and partners," Fan said.

"The SHXIP has established a bonded warehouse to provide us with services such as bonded logistics and import labeling. Additionally, to enhance customs clearance efficiency, the bonded warehouse has applied for and obtained Authorized Economic Operator certification. In the construction process, the industrial zone built a warehouse space based on our needs," said Fan.

Fan said that Estee Lauder values the support from the SHXIP, which aids enterprises in acquiring the most up-to-date information and policy adjustments, while meticulously and patiently addressing urgent, difficult and concerning challenges encountered by businesses.

Looking ahead, the SHXIP will persist in enhancing its services to invigorate the development of foreign businesses in Shanghai, according to Lin, deputy director of the SHXIP.

In the coming years, the industrial park will offer assistance to companies in high-end consumption, artificial intelligence and high-end manufacturing, as well as green and low-carbon sectors to support the industrial advancement of Shanghai.

The SHXIP will also emphasize high-standard and professional services. In 2023, the industrial park formed four specialized service teams catering to the green and low-carbon industry, biopharmaceuticals, the automotive industry chain and commercial aerospace industry.

This initiative enhances the accessibility of policies, emerging trends, and the latest findings for businesses in these sectors. Lin said that additional specialized service teams will be established for industries like smart manufacturing to guarantee precise resource alignment. The park will also enhance the efficiency of land resource utilization to uphold long-term and sustainable development.

Shanghai Xinzhuang Industrial Park:
+86 21 54425442*2070 Glen Wu
+86 21 54425442*2073 Wendy Zhang
Available: 9:00-17:00 UTC+8

SOURCE chinadaily.com.cn