Opening the Door to Investment
But China is not the easiest place to do business. It often has a higher cost of entry for incoming business than other markets, and plentiful regulation. Even individuals are immediately struck by restrictions on Internet, news sites (including The New York Times), and foreign social media usage. Luckily, some savvy travelers know that using cell phone data or downloading a VPN (virtual private network) disguises the location of your computer’s IP address, which avoids these government-imposed measures.
China knows it cannot be an economic powerhouse completely on its own. While its meteoric growth may have stalled, the slowdown has prompted local officials to rethink the way they approach outside investment and opportunity.
In 2013, a government experiment launched the Shanghai Free Trade Zone. The result brought in significant overseas investment that pumped much needed energy into the economy. With nearly 46 square miles along theYangtze River where it empties into the East China Sea, Shanghai’s free trade zone is one of the first in mainland China.
The experiment’s tempered success has proven that foreign investors are an important part of what keeps the region’s economic engine humming. Doing business within the trade zone removes financial stipulations and minimum investment capital requirements usually imposed to set up shop in the country. Duties on imported goods are also reduced for US investors. These are among several measures initiated by the municipal commission to expand trade and manufacturing business.
The latest five-year plan from the government aims for an economic growth target of between 6 and 7 percent per year, which takes into account the recently slowing economy.
The Shanghai Daily reports that foreign direct investment most recently grew by 1.6 percent, and contracted foreign direct investment (thanks to the free trade zone) billowed to an 86.5 percent growth rate as a result of new trade policies.
This is encouraging more foreign investors including many American companies. Shanghai boasts major operations from nearly 100 world brands including HSBC and Citibank, among others – a feat that would have been considered far more difficult less than a decade ago.
The city has everything from manufacturing (especially electronics) and transportation industries to in-