Shanghai's new policies aim to boost confidence

More foreign investment eyed as opening-up deepens, business environment improves

The COVID-19 pandemic has not held up Walmart's pace in China, where a new Sam's Club hypermarket, covering 70,000 square meters, is expected to open next year in Shanghai.

Plans for the new store were announced on Friday by Yang Wen, Walmart's East China business director, during a media interview.

While Walmart Inc, the world's largest retailer, has already opened 26 Sam's Clubs in China－two of which are in Shanghai－the new store will be Walmart's largest building in China, and will be a destination for entertainment as well as shopping.

On the same day that Walmart's Shanghai store-opening plan was unveiled, the municipal government of Shanghai announced 24 new policies to further improve the city's business environment and attract more foreign investors.

The measures were introduced to implement the country's deepened opening-up policies, step up investment promotion, make business opportunities more accessible to foreign investors, and protect their legal rights, according to the municipal government.

Specifically, the city will help foreign investors to enter industries emphasized in the country's new round of opening-up, with the finance and new energy vehicle sectors likely to see the first breakthroughs.

More efforts will be made to further open up the China (Shanghai) Pilot Free Trade Zone, especially the newly included Lingang Special Area. Telecommunications, science and technology services, education and healthcare will be the focus of further opening-up.

Easier cross-border capital flow is also included in the newly announced policies, so that foreign companies can expand their business operations in China with funds raised overseas.

Meanwhile, Shanghai will perfect the mechanism for foreign investors to file complaints and protect their legal rights. Heavier penalties will be imposed on those who have significantly infringed upon foreign companies' intellectual property rights.

Shanghai has long served as an indicator of foreign investment in China. According to the Shanghai Statistics Bureau, the city had cumulatively attracted up to $264.2 billion in foreign investment by March this year. In addition, the regional headquarters of 730 multinational companies, and 466 regional research and development centers, have been established in the city.

By the end of last year, more than 60,000 foreign-invested companies were registered in Shanghai, contributing more than one-fourth of the city's annual GDP, according to the city's statistics bureau. Up to 20 percent of the working population in Shanghai is employed by these foreign-invested companies.

In a municipal executive meeting at the beginning of April, Gong Zheng, Shanghai's acting mayor, said more efforts should be made to build Shanghai into a magnet for foreign investment. Customized and online business soliciting services should be rolled out and replicated across the city, he said.

The latest policy measures show how local authorities have acted efficiently and attended to enterprises' needs since the outbreak of COVID-19, and this gave foreign businesses fresh confidence, said Wang Wei, president in China for Ireland-based pharmaceutical company Allergan.

Jiang Ying, China vice-chair of global consultancy Deloitte, said Shanghai stands out as an investment axis, given its commitment to opening-up and innovation and its service-oriented sentiment.

"It took us less than two weeks to get regulatory approval for setting up a new subsidiary in China, a strong indication of streamlined government procedures to facilitate business operations," Jiang said, adding that the new measures unveiled on Friday are set to further unlock local research and development potential and attract foreign enterprises.

Compared with previous policies, the 24-point circular has moved from simply attracting foreign investment to the better use of foreign capital in real-life scenarios, which is bound to shore up confidence of multinational corporations in China in the long run, Jiang said.

Domestic vitality is also given priority. The municipal government of Shanghai has formulated a package of 20 measures for expanding investment and stabilizing economic activities after the novel coronavirus epidemic tapers off, an official said on Friday.

Wang Kouzhu, an official with the Shanghai Development and Reform Commission, said the measures have four categories: promoting major projects to resume operations, effectively extending government investment, perking up social investment, and continuously optimizing the investment environment.

Wang said 152 major projects and 60 additional ones, with a total investment of 2 trillion yuan ($284 billion), will be launched this year.

"Although the COVID-19 epidemic has stopped businesses from opening for more than one month, we are confident that through well-organized planning and implementation, we can finally reach this year's goal," Wang added.

The local government also looks to optimize approval and planning procedures for primary projects, in a bid to consistently attract new projects and increase capital support for the development of the projects.

In addition, the costs of recovering from epidemic impacts can be eased through special loans, and enterprises can get an extension on payment of fees and taxes.

Meanwhile, manufacturing and modern services will receive more support in capital raising, and medium-to long-term low interest loans will be available to strategic emerging industries.