Shanghai confidence
Multinationals drawn to the city’s investment potential
The Chinese team at German chemicals maker Covestro is making every effort to land a major investment project for Shanghai. The team, which has examined every detail of the project, is planning a videoconference between the city’s leaders and Covestro’s global CEO to discuss it, according to Holly Lei, senior vice-president of Covestro Group and president of Covestro China.
She added that the team is working flat out to push the group’s headquarters into awarding the project — details of which have not been disclosed — to Shanghai.
“The city is extremely important for us. It is our home, where we have the Shanghai integrated site, the company’s largest site worldwide, as well as an Asia-Pacific research and development center,” Lei said.
Covestro is not the only company to view Shanghai as an attractive proposition.
On June 15, the municipal authorities certified 30 regional headquarters for global corporations and 10 research and development centers in Shanghai, indicating the city’s pulling power as an investment destination for multinationals, despite the impact of the recent COVID-19 outbreak locally.
Such companies’ confidence is based on their development and the financial hub’s growth in past decades.
Fujiwara Kentaro, CEO of Shiseido China, said, “The Shanghai municipal government has been fully supportive of efforts to restore our business after the outbreak. With China now Shiseido’s largest overseas market, we remain optimistic regarding the nation’s economic outlook and market potential.”
In recent years, the Japanese cosmetics giant has seized opportunities to explore the Chinese market and deepen its local innovation capability.
By launching its third China Innovation Center at Oriental Beauty Valley, one of China’s largest cosmetics and health industrial hubs, located in Shanghai’s Fengxian district, Shiseido is committed to strengthening its research and development, or R&D, and innovation tailored for the Chinese market.
Eddy Chan, senior vice-president of FedEx Express and president of FedEx China, said, “Over the years, the Chinese government and the Shanghai municipal authorities have always provided a prime business environment for foreign enterprises, and Shanghai has witnessed many milestones achieved by FedEx in its development in China.”
The company opened the FedEx Shanghai International Express and Cargo Hub at Shanghai Pudong International Airport in 2018, Chan said. The center is not only an important facility for FedEx in the Asia-Pacific region but also the largest of its kind at the airport. It also enables greater access to the company’s global network for customers in eastern China, particularly those shipping goods to the United States and Europe.
After the recent COVID-19 outbreak, FedEx resumed operations in Shanghai at the start of June, fully supporting the local authorities’ efforts to contain the disease.
“We are positive about China’s business environment, and we are fully confident in Shanghai’s economic development and investment outlook,” Chan said.
Together with the city’s rapid recovery from the outbreak, multinationals’ confidence in Shanghai is based on the city’s achievements.
In 2020, the metropolis basically became a global center for economic, financial, trade, shipping and technological innovation. It is now on its way to further strengthening four major functions: allocating global resources; initiating technological innovation; leading development of high-end industries; and becoming an openingup gateway.
These functions are in line with requirements stressed by President Xi Jinping during his visit to Shanghai in November 2019.
With the improving COVID-19 situation in the city, business activity is bustling again.
On June 16, a ceremony was held to mark 322 major industrial projects with a combined investment of 565.8 billion yuan ($84.5 billion) being signed in Shanghai. It also celebrated the start of construction on 48 other projects worth 162.7 billion yuan.
In total, 90 of the new projects involve the integrated circuits, biopharmaceuticals and artificial intelligence industries, with the city striving to accelerate their development in the past few years.
A number of the investments have been placed by multinationals.
Xiao Song, global executive vicepresident of Siemens and chairman, president and CEO of Siemens China, said, “We will continue to expand our investment in the city.”
The German technology company has established a complete localized value chain in Shanghai, ranging from R&D to manufacturing and services.
Xiang Xiaofang, vice-president of Ford China, said the impact of the pandemic will not shake the company’s confidence in China.
Ford, which has been in the Chinese market for 27 years, has produced millions of vehicles in the country, and continues to believe that China offers tremendous opportunities, according to Xiang.
“This year, we will continue our transformation in electrification and intelligentization in China, as well as providing Chinese consumers with Ford’s best products and services,” Xiang said.
Ming Cheng Chien, Asia-Pacific president for Lanxess, a German specialty chemicals company, said, “We are continuously seeking opportunities in China, and the Chinese government’s efforts have allowed multinational corporations such as Lanxess to constantly find new opportunities, and raise assets and investments to coordinate with development of the Chinese economy.”
As the world’s largest chemical production and sales market, China not only supports this market globally but also serves the worldwide supply chain, Chien said.
For example, Shanghai Port, the world’s largest container port, plays a vital role in maintaining global supply chain stability.
“We are glad the Chinese government and the Shanghai municipal authorities have taken effective measures to maintain the supply chain while combating COVID-19. Such action will not only support our domestic production but also ensure Lanxess’ global production,” Chien said.
Confronting the challenges posed by COVID-19, Lanxess opened its Asia-Pacific application development center at Shanghai Chemical Industry Park last year.
Meanwhile, Zhou Zhaolin, vicepresident of Milliken Chemical Asia, a company based in the United States, said it is expanding its packaging innovation center in Shanghai. The expansion is aimed at further enhancing collaborative innovation with upstream and downstream enterprises.
According to Zhou, Milliken will continue to increase business investment in China.
Chemical manufacturer BASF China said the experience of the past few months has shown its employees’ dedication and resilience despite changes and challenges posed by COVID-19.
The company said: “China, the biggest chemicals market in the world, is projected to account for 50 percent of the global chemical market share by 2030. BASF still has plenty of room for further growth in China. Our investments in local production and R&D will continue.”
As a major foreign investor in China’s chemical industry, BASF operates the Innovation Campus Shanghai, a global and regional R&D hub. Opened in November 2012, it is the company’s largest such site in the region.
Over the past five years, the Innovation Campus Shanghai has applied for more than 220 patents, and it also plays an increasing role in developing innovation for the automotive, construction and consumer goods industries, according to a written response from BASF China.
“We are positive about China’s business environment, and we are fully confident in Shanghai’s economic development and investment outlook.” EDDY CHAN
Senior vice-president of FedEx Express and president of FedEx China