Shanghai Tops World Bank Benchmarks, Unveiling 2026 Business Environment Action Plan

Shanghai has rolled out a new phase of business environment reforms to strengthen its position as a top destination for multinational companies, signaling a shift from meeting international benchmarks to setting global standards.

The city government released today the "2026 Action Plan for Creating a World-Class Business Environment." The 9.0 version of the reform framework focuses on 26 measures designed to streamline government services, enforce fair market competition, and align local regulations with international standards.

The new measures follow updated data from the World Bank's corporate surveys released in late 2025, which indicated that Shanghai has reached "global optimal" levels in 22 specific points of business environment assessment.

The city's efficiency ratings exceeded those of established financial hubs, including Singapore, New York, London and Hong Kong, according to the survey.

To maintain the momentum, the 2026 plan prioritizes the removal of administrative barriers. A key feature is the expansion of the "application-free incentives."

Utilizing back-end data sharing between departments, the city government has identified enterprises eligible for specific subsidies and tax incentives. It then deposits funds directly into corporate accounts without requiring companies to submit paperwork.

Shanghai-based industrial software firm Black Lake Technologies secured 3.85 million yuan (US$550,496) in digital transformation subsidies through the automated application-free system.

"It allows us to focus entirely on industrial innovation rather than administrative hurdles," said CEO Zhou Yuxiang.

He noted that such an open and supportive environment has been the primary fuel for the company's rapid growth.

Foreign investors continue to expand

Multinational corporations continue to expand operations in the city, citing regulatory predictability and supply chain efficiency.

French automotive supplier Valeo is ramping up production at its new manufacturing base in Jiading District.

"The high-quality business environment is a key reason why we chose to continue increasing our investment in Shanghai and China," Christophe Périllat, CEO of Valeo Group, told Xinhua news agency.

Krohne Shanghai, a subsidiary of the German industrial process instrumentation manufacturer, has invested US$5 million to build a new factory in Songjiang District. The facility aims to serve as the group's Asian manufacturing hub for electromagnetic flowmeters.

Chen Jianlong, head of Krohne's Songjiang factory, said the company benefited from new tax policies on reinvestment of profits by foreign investors.

"We value the long-term resilience of the Chinese economy and recognize Shanghai's market-oriented and legal business environment," Chen said.

He noted that the project qualified for a tax credit exceeding 3 million yuan under the new measures.

Addressing concerns regarding market stability, the 2026 action plan introduces stricter enforcement against malicious low-price bidding.

The plan mandates optimized bid evaluation mechanisms to prevent price wars that compromise quality.

It also includes provisions to crack down on "professional profiteering" in compliance reporting and Internet trolls that damage corporate reputations, aiming to secure a fair legal environment for all market entities.

Domestic technology firms are also utilizing Shanghai's improved regulatory framework to expand internationally.

Westwell Technology, an autonomous logistics company now operating in 30 countries, utilized local government services to navigate international certification processes.

"When our team had fewer than 10 people, the government approached us with policies regarding talent and industrial support," said Tan Limin, chairman of Westwell Technology.

According to the Shanghai Development and Reform Commission, the 2026 plan condenses over 1,000 previous tasks into 26 core initiatives.

The focus remains on digitizing government services such as the city's e-government service platform, the "Government Online-Offline Shanghai" portal.

Tasks like changing corporate registration information can now be completed online in less than 10 minutes, with data automatically synced across tax, police and social security departments.

According to Bertrand Régnier, leader of EY China Inbound Platform, the new plan sends a clear signal that Shanghai is committed to high-quality development in order to welcome more foreign investment.

These actions, Regnier said, will be important to demonstrate a continuing "invest with confidence" mindset as China is entering the 15th Five-Year Plan for economic and social development, which sets the nation's strategic direction for 2026-2030.