Funds Keep Flowing in as Shanghai Remains Top Foreign Investment Target

Altogether 30 multinational headquarters and 15 foreign-funded research and development centers have been accredited by the Shanghai municipal government, with Mayor Gong Zheng awarding the certificates to their representatives on Wednesday.

As of February, the number of regional headquarters and foreign-funded R&D centers in the city had reached 1,085 and 647, respectively, a latest indication of Shanghai's strong attraction for foreign investment from emerging industry sectors such as biopharmaceuticals, integrated circuits, and high-end equipment as well as the automotive industry.

With the establishment of 6,300 new foreign-funded enterprises last year – an increase of 6.8 percent – Shanghai has continued to solidify its position as a prime destination for foreign investment.

Executives from the consumer goods, pharmaceutical and auto industry expressed strong confidence in the city's market potential, rolling out new R&D and manufacturing investments.

Last week, Haleon announced an investment of 65 million pounds (US$86.6 million) in a new state-of-the-art oral health manufacturing site in Shanghai.

Gijs Sanders, head of strategy, marketing and digitalization of Haleon China, said this allows the British healthcare company to respond faster to China consumers' needs for innovation.

The facility will support the expansion of its oral care portfolio, including global brands Sensodyne and Parodontax, into China's fast-growing tier-2 and tier-3 cities.

British multinational consumer goods group Reckitt, the parent company of consumer goods brands like Durex, Dettol, Movefree and Finish, is building a 300-million yuan (US$41.7 million) global R&D center in Shanghai to strengthen local innovation, the biggest of its kind in Asia.

"Shanghai has now become our strategic hub for development in the country and the favorable investment and business environment, as well as abundant talent pool and innovation resources, provide solid support for Reckitt's growth in the country," said Arjun Purkayastha, senior vice president and managing director of China & North Asia of Reckitt.

It will further enhance efficient collaboration with the Yangtze River Delta's entrepreneurial and industrial chains, driving innovation for local consumers.

Biopharmaceutical giant AbbVie last year upgraded its Shanghai entity into a regional headquarters which covers expanded functions, including strategic planning, investment decision-making, financial management, R&D coordination and regional operational support.

"Shanghai's favorable innovation environment, global talent pool, and strong government support has enabled AbbVie to efficiently translate external innovation insights into globally competitive strategic partnerships – accelerating the transition from local collaboration to global pipeline integration," noted Lily Dong, vice president & general manager of China Therapeutics at AbbVie.

In Shanghai, the American firm has forged clinical research partnerships with 13 leading hospitals and set up over 50 clinical research sites as it is actively building a globalized innovation network and systematically advancing local collaborations, thanks to local policy support and resource integration.

PHINIA Group, a leader in premium fuel systems, electrical systems and aftermarket solutions, has set up its Asia-Pacific headquarters in Shanghai, which manages markets, including China, Japan, South Korea, India and Singapore.

Yang Hongyong, PHINIA Group vice president and general manager of Fuel Systems Asia Pacific, said it will further promote localized innovation in technologies such as hydrogen energy applications and the adaptation of methanol/ethanol fuel systems, and develop low-carbon powertrain solutions that meet Chinese standards and market demands.

The Shanghai headquarters allows efficient integration of technology, talent and capital in the Asia-Pacific region to provide clients with integrated, cross-regional solutions.

The American company is expanding the production facility of its Shanghai plant in Waigaoqiao with a total of around 100 million yuan of investment to upgrade GDI (gas direct injection) and alternative fuel systems to serve the growing demand in China.

PHINIA aims to integrate management and investment functions, strengthen regional coordination, facilitate technology sharing and optimize resource allocation, and its regional headquarters would serve as a bridge connecting global technology with the Asia-Pacific market.