Shanghai pushes policies signaling city's long-term development outlook
Investors confident and inspired by culture, infrastructure and potential of metropolis
Supportive measures released by policymakers in Shanghai have sent a clear signal to the city's development and will help global enterprises build a long-term outlook on investment in the city.
Over the last few months, Shanghai has been developing measures to help global enterprises tackle challenges and identify new business opportunities. Various industries including consumption, green development, automobiles, finance, aviation and digitalization, have garnered benefits from those policies.
For example, Shanghai launched the Global Investment Promotion Season in mid-June to help global investors to explore potential business opportunities in sectors such as advanced manufacturing, public utilities, infrastructure, urban renovation and social welfare.
At the end of July, the city kicked off the third Shanghai Shopping Festival, also known as the Double Five Shopping Festival, to support recovery in the consumption industry. It also prepared 1 billion yuan ($140.57 million) of consumption coupons to stimulate growth during the festival.
Shanghai, which is working to become an international innovation hub, also identified the metaverse, smart terminal and digitalization and green transformation as three new frontiers for its future development.
Action plans released by the municipal government in early July predicted Shanghai would see the total value of its green industry exceed 500 billion yuan, the metaverse industry exceed 350 billion yuan and smart terminal and digitalization industry exceed 700 billion yuan in the years to come.
Efforts by the Shanghai government are already generating positive outcomes. Wang Huajie, deputy director of the Shanghai Municipal Development and Reform Commission, said the Global Investment Promotion Season which ended on Sept 20 has secured 597 key projects with investments totaling 941 billion yuan for the city. A total of 296 projects with a total investment of 602.9 billion yuan have already begun construction.
The city remains a popular destination for global brands to open their first store in China. Gu Jun, director of the Shanghai Commission of Commerce, said global brands opened 703 first stores in Shanghai in the first nine months of this year. About 800 such stores will be opened by the end of 2022.
A land of inspiration
For enterprises, support policies and measures released in Shanghai not only showcase the city's resolve and confidence in regaining momentum, but are of great importance to inspiring them to make long-term plans.
Coach, one of the subsidiaries of Tapestry, started its Chinese journey in 2008 by setting up an office in Shanghai. It then upgraded the office into Tapestry's headquarters in Asia. The brand said it plans to adopt the digital-first and consumer-centric approach in the coming years, in line with Shanghai's digitalization progress.
"We are improving the omnichannel experience and seek to align ourselves with our customers and be bold in pioneering any digital adventure. We're utilizing marketing capabilities to drive engagement and enhance the digital journey and strengthening partnerships with Tmall, JD and Tencent. We are also interacting with our customers in various platforms — Dewu, Douyin, Red, Bilibili and Kuaishou," said Yann Bozec, president of Tapestry Asia-Pacific and who is also president and CEO of Coach China.
Shanghai has become a source of inspiration for Coach in recent years, according to Bozec. Over that time, the brand has partnered with many local artists and young university students to create fashion products featuring the Chinese culture.
"For Coach, Shanghai is always the source of inspiration to seek breakthroughs and innovations. The charming city, with an attractive and favorable business environment, a very inclusive and enthusiastic city spirit and consumption vitality, encourages companies like us to develop and grow, to inspire a better life," Bozec said.
Coach, which has set up more than 200 stores in China, is keen to expand business and partnerships in Shanghai.
"Shanghai is our home; we see sufficient resilience and potential of the city; and we are fully confident in its economic development and our outlook here," Bozec said.
Hotel group Marriott International, which operates more than 460 hotels under 23 brands in China including 55 hotels under 19 brands in Shanghai, will continue to invest in Shanghai with new hotels to be opened in 2023, despite the outbreak of COVID-19 having had a significant effect on the hospitality and tourism industry there.
Henry Lee, president of Marriott International Greater China, said the hotel chain plans to open a new Fairfield by Marriott hotel in the Lin-Gang New Area, increasing the number of Fairfield hotels in Shanghai to four, along with a new tribute portfolio in Jinshan district.
In 2021, Marriott International opened six new hotels under four brands in Pudong New Area and the districts of Jiading, Xuhui, Fengxian, Minhang and Qingpu. They include two Moxy hotels, namely Moxy Shanghai Hongqiao NECC and Moxy Shanghai Xuhui.
Lee said Shanghai's sound business environment, leading effect on China's large consumer markets and strong talent pool offer favorable conditions for the operation and development of Marriott International.
The region's vast economic growth potential, convenient transportation and rich culture and history support it as one of the key destinations for business travel, leisure travel and MICE, shorthand for meetings, incentives, conferences, and exhibitions.
Lee said the outbreak of COVID-19 in the first half of the year affected the hospitality and tourism industry. However, the sector is gradually recovering.
"Our business in Shanghai is regaining its momentum as both leisure and business travels get back on track," Lee said.
Lee said the company has seen steady improvement in room occupancy in the last three months, a sign of consumer demand recovery.
"As an international metropolis, Shanghai is creating more influential tourism products to further stimulate market demand. Marriott International will make full use of its hotel layout in Shanghai to constantly grasp the market trend, actively respond to changes and upgrades in consumer demand, and support Shanghai's all-for-one tourism development with high-quality tourism products."
In January 2021, Shanghai released a plan to build five new towns in its suburban areas, known as Jiading, Qingpu, Songjiang, Fengxian and Nanhui, to optimize the city's development layout and to create new engines for future growth.
According to a guideline on accelerating the construction of these suburbs released in March 2021, combined population in the five new towns will grow to 3.6 million by 2025, with each town planned to have 1 million permanent residents by 2035. Lee said the group is looking forward to business opportunities in those regions.
"Shanghai is striving to build five new towns which also sets favorable conditions for the group to join hands with visionary owners and franchisees to continue expanding in Shanghai, introducing even more new brands, and providing more diversified travel experiences," Lee said.
Injecting more vitality
In an effort to better manage market uncertainties and bolster business recovery especially of hard-hit industries, Shanghai is setting more policies to enhance the business environment and unleash its market potential.
On Sept 28, Shanghai's government announced 22 new measures, on top of the 50 measures released at the end of May, to bolster economic recovery in the city.
Wu Qing, executive vice-mayor of Shanghai, said the 22 policies will help boost development, inject vitality, stabilize growth and optimize the business environment of industries in the city.
Industries which experienced a significant decline due to the outbreak of COVID-19 in the first half of 2022 in Shanghai, including culture, tourism, exhibitions, advertising and aviation, will gain more support. For example, qualified rated hotels and scenic sites will receive a subsidy.
Expo organizers of economic or technology fairs, will receive up to 1 million yuan in subsidies per exhibition.
The policies will also grant incentives to small and medium-sized enterprises that are recognized by the Ministry of Industry and Information Technology as niche-sector leaders with high market share and strong innovation capacity.
Micro and small-sized enterprises which have upgraded into key players above designated size, which means each firm has an annual revenue of 20 million yuan, will receive a subsidy of up to 500,000 yuan to encourage them to purchase services such as digital management, legal advisory and testing.
Shanghai released 15 measures on Sunday to support intellectual property registration, finance and trade, and boost IP services. The city is set to become an internationally recognized area for IP protection by 2025, and turn into a global city with comprehensive systems and a good environment for IP utilization by 2035.
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