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Shanghai's New Action Plan for Economic Vitalization

On February 5, 2025, the Shanghai municipal government unveiled its latest initiative aimed at enhancing the business environment within the city. This marks the eighth consecutive year the government has held a work conference focused on improving conditions for enterprises. This new action plan, which includes 58 comprehensive measures, is expected to not only address the needs of market entities but also rejuvenate economic growth across Shanghai.

Objectives of the Action Plan

According to Lu Aiguo, head of the Business Environment Construction Division of the Shanghai Municipal Development and Reform Commission, the plan emphasizes improving the profitability perception of businesses operating in the city. One of the major goals is to align reforms with the World Bank's Business Ready (B-READY) evaluation system. In connection with this, ten reform measures have been initiated, targeting key areas such as market access, operating locations, infrastructure, public services, international trade, and market competition.

Enhancements in International Trade

As part of this action plan, Shanghai aims to increase the variety of high-tech goods that can benefit from a selective control and inspection model. Additionally, the pilot program for imports designated for research, development, and test items will be further optimized. Customs clearance services are set to improve via effective implementation of measures like multimodal transport and electronic certification applications.

Furthermore, the plan introduces 24 additional measures to optimize comprehensive services provided to companies. It calls for the introduction of innovative financial products to maintain continuous financial support for small and medium enterprises (SMEs). The government will also facilitate the international engagement of domestic businesses while gradually opening the local market to foreign players.

Supporting International Talent and Investment

The new plan seeks to streamline visa and entry-exit processes for international talent, making it easier for skilled individuals to engage with businesses in Shanghai. Additionally, it encourages an influx of foreign investment projects, ensuring that significant initiatives are executed more swiftly.

Interestingly, on the same day of the announcement, Japanese automaker Toyota signed an agreement with Shanghai's government to establish a wholly owned subsidiary in the Jinshan district. This new facility will focus on the development and production of electric vehicles and Lexus batteries, emphasizing the importance of Shanghai's mature industrial chains, logistical networks, talent supply, and the considerable market size in the region.

Focus on Data Flow and Service Optimization

To enhance services rendered to enterprises, the action plan proposes the implementation of a negative list for cross-border data flow within the China (Shanghai) Pilot Free Trade Zone. This will ensure data security while optimizing trade processes.

In addition, 14 measures are also included to improve inspections for businesses, aimed at reducing bureaucracy and increasing efficiency in operations.

This multi-faceted action plan is a clear indication of Shanghai's commitment to fostering a dynamic business landscape that not only retains existing enterprises but also attracts new investments essential for the city’s sustainable economic growth.

For those interested in further details, visit Shanghai Municipal Government Site.