White paper on Shanghai FTZ highlights milestones, prospects

A white paper is released at the Forum on the 10th Anniversary for the China (Shanghai) Free Trade Zone. [Photo provided to chinadaily.com.cn]

A white paper was recently released at the Forum on the 10th Anniversary for the China (Shanghai) Free Trade Zone, highlighting Shanghai FTZ's remarkable achievements in economic growth, foreign investment, innovations and high-level opening-up.

Over the past decade, Shanghai FTZ, the first of its kind in China, has paved the way for institutional innovation that has increased business activities and resulted in a continuous influx of foreign capital to the nation.

According to the white paper, the Shanghai FTZ had by the end of 2022 attracted 84,000 new enterprises - 2.35 times the number from 20 years ago before the establishment of the zone. The Pudong New Area had attracted 18,691 new foreign investment projects with a total registered capital of $217.27 billion and actual foreign investment of $74.99 billion.

Negative list

The negative list mechanism for foreign investment, which has been in use in the Shanghai FTZ since its inception, is one of the major institutional innovations now applied across the nation. Over the past decade, there have been eight editions of the list. The initial list had 190 items. It currently has just 27.

Zhou Hanmin, a member of the National Committee of the Chinese People's Political Consultative Conference, said institutional opening-up is an important task for FTZs. The Shanghai FTZ now needs to carry out larger stress tests to be better connected with the Comprehensive and Progressive Trans-Pacific Partnership, or CPTPP, he added.

Fertile ground for businesses

Tesla's Shanghai gigafactory in the Lin-gang New Area of the Shanghai FTZ covers an area of 865,000 square meters and is backed by 50 billion yuan ($6.84 billion) in investments. The gigafactory took just 18 months to build.

On April 9, Tesla announced that it will channel additional investment into Shanghai to construct a new energy storage super factory, which will have an initial production capacity of 10,000 units of commercial energy storage batteries per year.

Tao Lin, vice-president of Tesla China, said the company's development is closely linked with the optimized business environment and institutional innovation in the Shanghai FTZ.  

Private equity giants

Shanghai FTZ has also become a hub for financial institutions. In September 2020, Amumdi BOC Wealth Management Co Ltd, the nation's first foreign-controlled joint-venture wealth management enterprise, was given the green light to operate in the Lin-gang New Area.

By the end of 2022, all five foreign-controlled wealth management companies in China had gathered in Shanghai, and three foreign-owned public funds - BlackRock, Fidelity and Neuberger Berman - had all set up offices in the Pudong New Area.

Hamilton Lane, a global private equity giant managing over $850 billion in assets, recently opened its Shanghai office.

"The establishment of the Shanghai office will fully leverage the institutional innovation advantages of the Shanghai FTZ to promote our businesses in China. We have long-term confidence in the development of the capital markets and investment opportunities in the Asia-Pacific region," said Xia Mingchen, co-head of investments for Asia-Pacific region at Hamilton Lane.