International companies drawn to city by inclusive, open business environment

The 2024 Shanghai City Investment Promotion Conference, taking place on Wednesday, serves as a window for global businesses to explore Shanghai's evolving business environment and investment opportunities.

The event, part of the 2024 China International Import Expo at the National Exhibition and Convention Center (Shanghai), is attended by representatives from the Shanghai government, businesses, investment promotion agencies and academic institutions. An array of road shows, arranged by districts and business areas of Shanghai are featured for investors to learn about the latest developments and new investment trends in the city.

In 2024, amid global economic uncertainties, Shanghai continues to stand out as a favored investment hub for foreign enterprises. By the end of September, the city boasts 998 foreign-funded headquarters and 582 foreign-funded research and development centers, marking respective increases of 42 and 21.

Companies selected Shanghai as a preferred investment destination for a multitude of reasons, including its openness, innovation, inclusiveness, efficient government services, comprehensive supply chains, prime geographical positioning, well-developed infrastructure, abundant talent pool and world-class living environment.

Supporting rapid expansion

Japan-based Yusen Logistics entered the Chinese market in 2000 with its China headquarters based in Shanghai. Over the past 24 years, the company has experienced significant growth in the country, expanding to more than 20 branches and offices nationwide, employing more than 1,200 staff members.

"Our core services encompass international ocean and air freight forwarding, warehousing, distribution services and supply chain solution. Our customers span various sectors including automotive, healthcare, retail, aerospace, technology and food industries," said Kaori Nagamizo, chairman, president and CEO of Yusen Logistics China.

Nagamizo said that Shanghai's position to be an international economic center, an international financial center, an international trade center and an international shipping center provides a great foundation for Yusen Logistics China to take root in Shanghai and expand its business nationwide and even globally. Meanwhile, Shanghai's excellent hardware facilities and supporting industrial resources for the logistics industry such as its deep-water port, airports, talent pool, rapid developing telecommunication industry and finance industry also strengthen Yusen Logistics' confidence.

In 2021, Yusen Logistics inaugurated its East Asia regional headquarters in Shanghai, aiming to consolidate resources, enhance management practices and optimize its business structure within the Chinese market.

"This strategic move has not only enabled us to deliver professional, dependable and comprehensive high-quality services to our clients but has also facilitated collaborative advancement with our partners, contributing to the sustainable development of both companies and society," said Nagamizo.

Nagamizo said Yusen Logistics will continue to expand its presence in Shanghai and China. It will further use its expertise to bolster the development of Shanghai and China.

"The modern logistics industry in Shanghai is developing rapidly, with more than 100,000 registered enterprises, indicating a vibrant logistics sector. The city is leading industry transformation in areas such as information technology, digitalization and industry integration, positioning itself at the forefront nationwide and exerting international influence on the global logistics industry," said Nagamizo.

"Yusen Logistics will leverage our experience and advantages in the logistics sector to enhance logistics efficiency, support Shanghai enterprises in integrating into the global supply chain, promote regional economic integration, facilitate the sustainable development of the logistics industry, support the development of emerging industries and contribute to talent cultivation and standardization in the logistics sector," he added.

Yusen Logistics will also contribute to China's "dual carbon" goals to peak carbon dioxide emissions before 2030 and achieve carbon neutrality before 2060.

"Yusen Logistics has actively promoted green logistics in the Chinese market by introducing carbon dioxide emission calculation tools, transportation process carbon emission data management systems and tailor-made carbon emission reduction solutions. We have introduced the hydrogen fuel cell truck transportation model and the Sustainable Aviation Fuel program in China," said Nagamizo.

Navigating opportunities and challenges

E-Land, a leading apparel manufacturer from South Korea, first established itself in the Minhang district of Shanghai in 1992. Over the past three decades, the company has continually seized new opportunities in China, propelling its growth and success.

In 2023, E-Land built the E-Innovation Valley, an industrial park situated in Minhang district with an investment exceeding 1.8 billion yuan ($253.64 million).

Today, this innovation valley houses E-Land's China headquarters and functions as a service hub for South Korean businesses. It provides support in areas such as business registration, finance, identifying local partners and logistics services.

"There is a comprehensive fashion apparel innovation center within the valley, offering services including business operations, automated logistics, e-commerce, rapid-response production facilities and photography studios. It also serves as a launchpad for South Korean enterprises seeking access into China and Chinese companies aiming to expand globally," said Chris Kim, general manager of E-Land Investment and Operation Company. "The innovation valley not only provides a business space but also leverages the 30 years of E-Land's experience in China."

So far, organizations and businesses like the Korea SMEs and Startups Agency Global Business Center (Shanghai) and Speedy Factory have established their presence in the innovation valley. Additionally, Korea Startup Accelerators and Early Stage Investors Association, an association in South Korea that specializes in offering acceleration services such as investment and international expansion support to startups, has reached an agreement to relocate to the valley.

Kim said that the company will cash in on Shanghai's status as an international consumption hub to assist emerging fashion brands from South Korea in entering the Chinese market. Moreover, the company plans to enhance its cross-border e-commerce operations by utilizing the well-established logistics network between China and South Korea.

Kim said that despite uncertainties and challenges in recent years, E-Land maintains confidence in the long-term development of China.

"E-Land is a company that consistently views challenges as opportunities," said Kim. "In my opinion, markets can be categorized into two types: the Chinese market and non-Chinese markets. I maintain an optimistic outlook on the long-term potential of the Chinese market."

Bolstering long-term development

In recent years, Shanghai has been committed to building itself into an international consumption hub and has identified three pioneering future industries — biomedicine, artificial intelligence and integrated circuits — with the aim to inject vitality into the long-term development of the city.

German life science company Bayer, boasting a presence of more than 140 years in China, has significantly increased its investment in consumer health products, pharmaceuticals and agricultural solutions in Shanghai and throughout China in recent years.

Bayer opened its China Center for Innovation and Partnership at the Shanghai Frontier Industrial Innovation Center for Biomedicine on Oct 16. This move signifies Bayer's commitment to further seizing opportunities arising from the consumption upgrade trend in China.

According to Zhou Xiaolan, global executive vice-president of Bayer's Pharmaceuticals Division, president of the Pharmaceutical Division of China and president of Bayer Greater China Region, the new setup was established to promote innovation and collaboration in the fields of health and nutrition, accelerate innovation and partnership and help enterprises explore more self-care solutions suitable for Chinese consumers.

"With the CCIP, Bayer will integrate more deeply into China's innovation ecosystem. CCIP will continue to implement and deepen the principles of open innovation and collaborative operations, aiming to build an integrated innovation cooperation network that combines industry, academia and research institutions and establishing close relationships with partners," said Zhou. "CCIP will also leverage Bayer's extensive international experience to integrate consumer needs from China, Asia-Pacific region and even globally, utilizing Bayer's global network to accelerate the internationalization of Chinese innovations."

In the pharmaceutical area, Bayer has invested more than 3.5 billion euros ($3.81 billion) in the past three years to establish a cell and gene therapy platform, or CGT, with seven projects of CGT currently in various stages of clinical development. In the agriculture area, Bayer is actively developing and introducing crop seeds and crop protection solutions that meet diverse needs in the Chinese market.

According to Zhou, Shanghai, home to the China headquarters of Bayer, will continue to be an ideal destination for its business environment.

"Shanghai's business environment has clear advantages, especially in the pharmaceutical sector, where the development potential is immense. I believe that with the joint efforts of the government and enterprises, Shanghai's business environment will continue to improve, creating more opportunities and development space for businesses," said Zhou. " Shanghai is a long-time home base of Bayer in China; and we have no hesitation to promote Shanghai internationally.

"If I were to describe Shanghai with a few keywords, they would include 'open and inclusive', 'innovation engine', 'business-friendly', 'talent hub', 'limitless opportunities' and 'pragmatic'."

Getting involved in transformation

The US-based smart building solution provider, Johnson Controls, has been actively capitalizing on the vast opportunities emerging from China's artificial intelligence industry and green economy in recent years. It aims to facilitate the high-quality and green transition of the advanced manufacturing sector.

Shanghai, a key economic center in China known for its robust demand for smart building solutions and energy management, as well as diverse application scenarios, plays a vital role in inspiring and providing market insights to Johnson Controls, according to Yu Ning, head of Government Affairs of Johnson Controls in China.

"The Shanghai of 2034 is poised to be the global model for a sustainable and smart city, where cutting-edge technologies such as AI are seamlessly interconnected into business and everyday life. Intelligent buildings will be at the heart of this sustainable and smart ecosystem," said George R. Oliver, chairman and CEO of Johnson Controls at the 36th International Business Leaders' Advisory Council for the Mayor of Shanghai held in September.

The ongoing measures implemented by the Shanghai government in areas such as innovation, talent development, regulation and financial support in recent years all serve to strengthen Johnson Controls' confidence in Shanghai, according to Yu.

"Shanghai, in my perspective, is a city of innovation, smart, green and low-carbon, as well as open and inclusive," said Yu. "For many years, Johnson Controls has been actively involved in the city's development. We are very proud to be a part of Shanghai's transformation journey."