During the Teleconference on Shanghai Commercial Work of 1 March 2020, the Shanghai Municipal Government introduced measures on controlling the COVID-19 corona virus but concurrently supporting companies and developing the economy. By making foreign investment one of the focal points, Shanghai continues to be a fervent supporter of foreign business in China.
Measures to Support Foreign-Invested Enterprises Overcome COVID-19
Like its domestic-invested counterparts, Chinese subsidiaries of foreign companies have suffered a lot from the COVID-19 outbreak. To support these enterprises to survive and develop during the current crisis, the Shanghai Municipal Government issued 28 policies, including providing fiscal and tax support to key enterprises that contribute to COVID-19 prevention, rent exemptions, and lowering the medical insurance rates for employees.
The Shanghai Municipal Government has also taken measures to resolve challenges faced by specific enterprises. For example, Fonterra Commercial Trading (Shanghai) Company Limited, a foreign-invested company engaged in dairy production and processing, was confronted with a logistics problem after it resumed work. Reporting to the Jing’an District Commission of Commerce, it quickly obtained new permits. Some districts also held forums with foreign-invested companies to collect problems they were facing because of COVID-19 and find solutions to these problems.
Measures to Attract More Foreign Investment
The Shanghai Municipal Government further announced its plans to attract another 40 regional multinational headquarters and 15 foreign-funded R&D centers to the city in 2020. It will support this process by introducing new local legislation to implement the Foreign Investment Law of PRC (effective 1 January 2020), which will serve to facilitate and provide better protect foreign investors. The Shanghai Municipal Commission of Commerce has also been working with other departments to improve the Internet platform of foreign-related services, to provide more convenient government and public services to foreigners. And Shanghai will strive to further open up key sectors including telecommunications, insurance and securities, research, technical services, education and health services.
Foreign investment has been and continues to be an important motor of the Chinese economy. But while some cities may have turned more inwards in recent years, it is good to see that the Shanghai authorities acknowledge the important role of foreign investment in the local economy, and continue to think creatively on how to support existing business and attract new foreign investment.