Jinqiao, more than just business-friendly
Jinqiao, the production arm of China (Shanghai) Pilot Free Trade Zone, is taking a key step in developing next-generation intelligent manufacturing.
Standing at the forefront of Shanghai’s institutional innovation and reform experiment, Jinqiao has grown up together with Pudong over the past 28 years.
An important area for advanced manufacturing, Jinqiao was included in the Shanghai free trade zone in April 2015.
At the Jinjing Road Volvo plant, a 1-million-yuan (US$144,000) excavator rolls off the automated assembly line every 20 minutes.
Heavy and medium-sized excavators are produced on the same assembly line.
Look around, Volvo is not alone. Its neighbors include General Motors, Sharp Electronics and ThyssenKrupp. Zhan Xu, vice president of Volvo (China), is grateful for the agglomeration of industries in Jinqiao. “When we are searching for business partners they are always just a few steps away. It is really great.”
Covering 40 square kilometers, Jinqiao is designated to become a large-scale production base. Its automotive industry is the first in Pudong with annual output exceeding 100 billion yuan, accounting for half of the total output of Shanghai’s automotive industry.
In addition, output of intelligent manufacturing in Jinqiao was 22 billion yuan last year, one-fourth of the city’s total. Mobile video made 60 billion yuan during the same period.
The registered capital of financial and tech firms totals over 10 billion yuan and the total amount of capital in the operations management has reached 200 billion yuan.
Jinqiao is home to about a quarter of Pudong’s industry, and the next step is to further develop traditional pillar industries, such as automotive manufacturing, electronic information, household appliances, food and biomedicine, and integrate them with the development of new industries, including big data and artificial intelligence.
On the other hand, a “3+1” industrial layout is taking shape which consists of modern automotive industry on the basis of new-energy vehicles and smart driving, intelligent manufacturing on the basis of industrial Internet and robots, new media on the basis of mobile network and AR/VR as well as emerging financial services on the basis of fintech and blockchain.
Jinqiao also plans to make breakthroughs in the inspection and approval for cross-border repairs and entrepot trade to further encourage innovation among free trade institutions.
Producer service is always a top priority. The “negative list” that restricts foreign investment has been shortened from 190 items in 2013 to 45 this year, which has boosted the confidence of investors to establish their business in Jinqiao.
Meanwhile, the introduction of 100 further opening-up measures in July makes foreign-funded projects easier as well as the capital inflows. It helped the establishment of IfFP Professional Skills Training in early September.
The Zurich-based institute for financial planning debuted its Shanghai business in Jinqiao where 24-hour “one-counter” enterprise services are available.
One-stop service
“There was no precedent to launch a wholly foreign-owned financial planning and wealth management education and training institute in China,” said Zhong Ke, general manager of IfFP (Shanghai).
“But the new policies ensured a smooth process and helped IfFP get a pass in September. I’d never thought it would be so soon.”
Under preferential policies initiated in the zone, Volvo was allowed to engage in a sideline commercial factoring business relevant to its main business.
Factoring refers to a type of debt finance in which a business sells its accounts receivable to a third party, or factor, at a discount, to raise cash.
As one of Volvo’s four major headquarters, Jinqiao accounts for about a fourth of the group’s global business.
“Allowing financial leasing companies to engage in sideline commercial factoring is a major breakthrough in the FTZ’s financial innovation,” said Zhan Xu, vice president and director of Volvo Construction Equipment. “It raises the level of financial leasing services and expands the scope of business.”
Other beneficiaries include Anchor Center for Certification, the first foreign-invested third-party certification accreditation body for food safety, industrial control and automation company Festo and world’s leading beauty manufacturer L’Oréal.
Festo is the first foreign enterprise in the Shanghai free trade zone to practice goods classification and supervision in special areas.
The new policy adopted by Pudong Customs allows Festo to store bonded and non-bonded goods in the same warehouse and distribute them to clients in the Asia-Pacific region.
L’Oréal was one of the first to benefit from the policy of “filing non-special cosmetics” which was issued four months ago. The policy revamped the previous regulations that required a lengthy examination and approval procedure before any imported product could be launched in China.
Instead of a three-month waiting time in the past, the new rule allows cosmetics companies to obtain credentials within five workdays of filing product information with related departments.
“Now seasonal products such as special Christmas releases can appear on the Chinese market right on time,” said Tu Chunyi, who is in charge of L’Oréal’s product safety and legal issues in the Asia-Pacific region.
Jinqiao has been creating a business-friendly environment ever since it became part of the Shanghai free trade zone.
The annual growth of registered foreign capital was 21 percent between 2014 and 2017, according to Yang Ye, director of Jinqiao Administrative Committee.
By the end of September, 55 Fortune Global 500 companies had invested in 102 projects in Jinqiao involving US$25 billion.