New investment hot spots prop up Shanghai’s Jan FDI surge

New popular destinations for foreign direct investment (FDI) emerged in Shanghai in January, as the more than 5-year-old pilot free trade zone has grown to a pioneer in China’s deepening economic structural reform and opening-up.

FDI continued to pour into the city, and most of it went into the modern services industry and advanced manufacturing. The figures show that Shanghai, a key link in global trade, has become more attractive to FDI with its emerging advantages.

In January, 563 new foreignfunded projects were established, up 69.1 percent yearon-year. Contracted foreign investment exceeded $10 billion, increasing 197.6 percent year-on-year, according to a local government announcement posted on its website on Tuesday.

Shanghai is leading the nation’s effort to improve business climate. The city has made great progress in improving administrative efficiency and management, a World Bank report in October showed.

As China is losing its attractiveness for FDI due to higher labor costs and land prices, and the phasing out of super-preferential policies for foreign companies, new growth areas are attracting more FDI, local statistics showed.

According to the statistics, the manufacturing industry in Shanghai attracted $126 million in January, a year-on-year increase of 315.7 percent.

Also, 552 new foreign-funded services projects were established, with actual foreign investment of $1.28 billion, a year-on-year increase of 24.8 percent.

Shanghai’s FDI growth in 2018 benefited from grand programs in new industries like Tesla’s $5 billion factory.

Large projects in emerging industries show that China’s innovation capabilities are further strengthening, while its technological progress is accelerating and emerging industries are growing rapidly, said Sang Baichuan, director of the Institute of International Business at the Beijing-based University of International Business and Economics.