President Xi Jinping is in Shanghai this week – a visit that may carry long-term implications for the city's role in China's future.

Notably, it comes as the country prepares its next five-year plan. What follows is a breakdown of what was said and what it could mean for Shanghai's future as a global tech hub.

What happened:

Xinhua reported that, together with Shanghai Party Secretary Chen Jining, Mayor Gong Zheng and several other officials, Xi visited the Shanghai Foundation Model Innovation Center in Xuhui District – an incubator that now hosts over 100 AI startups. He was briefed on the explosive growth of China's AI sector – much of it centered in Shanghai – met with young entrepreneurs, and tried out cutting-edge technologies. He also visited the New Development Bank (a multilateral development bank established by the BRICS countries – Brazil, Russia, India, China, and South Africa) at their headquarters in Shanghai.

The strategic message behind the visit

For those familiar with China's political cadence, the president's recent visit to Shanghai was anything but routine. While media coverage emphasized his tour of the AI innovation center and meetings with young entrepreneurs, the real signal came through his words.

During the visit, Xi declared that Shanghai bears the historic mission of becoming a global center for scientific and technological innovation – a statement with weighty implications. It signals strategic priorities that trigger coordinated action across government, industry and finance.

This kind of rhetoric is not new, but it's always meaningful. When Xi sets a national direction – as he did with anti-corruption in 2012, "Made in China 2025," or "Common Prosperity" in 2021 – it often initiates a cascade of policies, investments and regulatory realignments. His focus on AI and the placement of Shanghai at its epicenter should be seen in that same light.

Put simply: Shanghai – long known as the "Pearl of the Orient" – has been tasked with becoming a global bellwether in tech, innovation and AI: a sector that will transform nearly every aspect of modern life. That's not just a slogan. It's a mission.

In short, when Xi speaks with strategic clarity, it often signals the start of a coordinated national mission – backed by funding, policy shifts and cultural mobilization. This week, he charged Shanghai with a leading role on the global stage.

Shanghai's ground-level push: AI in practice, not just policy

Shanghai's AI strategy is already well underway, executed with precision, scale and clear intent.

According to the 2023 Shanghai Almanac, the city has designated artificial intelligence as a strategic pillar, both as an industry in its own right and as a catalyst for broader regional integration. AI isn't just a buzzword here; it's been embedded into the city's long-term economic blueprint, particularly through the Yangtze River Delta integration strategy. This includes a major push to build a fully autonomous and controllable AI software and hardware stack – a signal that China is serious about reducing its reliance on external technologies while expanding domestic capability at scale.

The Lingang Special Area stands out. It is now evolving rapidly into a hub for innovation, entrepreneurship and AI-driven development. At the center of this is the Dishui Lake AI Innovation Hub, which has attracted over 150 AI companies and now supports a research community of more than 5,000 developers, engineers, and scientists. The focus there is grounded: software, robotics and wearable terminals – not buzzword-chasing, but targeted, applied R&D.

Expansion is also happening at breakneck speed. Key foreign-funded projects, such as Haleon and Boston Scientific, signed contracts with Lingang. The area is also developing emerging finance, attracting more than 100 new financial companies in 2023 and Allianz Global Investors GmbH was allowed to set up the first wholly foreign-owned mutual fund firm in the area.

Meanwhile, over in Pudong, AI isn't treated as a separate experiment – it's one of three pillars, alongside integrated circuits and biomedicine, forming the backbone of the district's next-generation industrial base. Together, these sectors generated 730 billion yuan in output in 2023. Pudong's fixed-asset investment rose 18 percent – not in real estate or finance, but in infrastructure aimed squarely at the future.

If Xi's visit marked Shanghai's elevation on the global AI stage, the Almanac makes one thing clear: The groundwork was already well underway.

Five big ways expats and foreign investors can ride a "New Chinese Wave"

1. Dual Circulation = Open Doors for Foreign Founders

First: What is the Dual Circulation Strategy? In simple terms:

• "Internal circulation" focuses on boosting domestic consumption, innovation and self-reliance, especially in high-tech industries like AI and semiconductors.
  
• "External circulation" emphasizes continued trade, foreign investment and global collaboration, especially where it supports or complements domestic goals.
  

And if we've learned anything from Shanghai's AI and tech innovation zones, it is that they aren't walled gardens – they're test beds for China's "dual circulation" strategy, where domestic innovation is paired with targeted global integration.

What this means for expats / foreign investors: The door is open, especially in sectors like applied AI, robotics, health-care tech and clean energy.

2. Government Support Lowers Startup Costs

This is something many foreign businesses or entrepreneurs don't know yet, and it's astonishing what has been made available. Last year, I wrote a piece detailing how Lingang has invested heavily in policies and programs aimed at helping new businesses set up in the area. This includes things like:

• Extremely discounted office rental space
• Assisted with company registration services
• Complimentary legal and accounting services for start-ups
• Introduction to capital/investment institutions
• Pre-built cloud + compute infrastructure

What this means for expats / foreign investors: In Shanghai's AI zones, infrastructure isn't just physical – it's financial and institutional. The city is actively subsidizing early-stage AI ventures (including foreign startups) and streamlining processes to attract global talent and capital.

3. First-Mover Advantage in a Fast-Growing Market

China's AI governance, data regulation and AI-for-public-good frameworks are diverging from the West. Those who enter early can help shape the ecosystem, and tap into a market that:

• Graduates more STEM students than anywhere on Earth
  
• Has a unified regulatory apparatus (fewer state-by-state hurdles)
  
• Is investing heavily in AI for manufacturing, logistics, health, and education
  

What this means for expats / foreign investors: Under the current administration, the US is moving toward deregulating AI development, including areas such as ethics, safety and security. This stands in stark contrast with Europe, whose core values are more closely aligned with the common good. We might see a lot more participation from European academics, think tanks, as well as both the public and private sectors, engaging in opportunities to work with China on shaping AI ethics, governance and safety. For founders and investors frustrated by fragmentation in Western AI markets, Shanghai offers something rare: central coordination, rapid deployment, and a national mandate that aligns policy, funding and demand in one direction.

4. World-Class Talent Is Already Here

For foreign investors and entrepreneurs who need solid brain capital to start up and operate their projects, with a pipeline of world-class AI engineers and a coordinated national strategy, Shanghai now offers one of the most founder-friendly ecosystems on the planet.

Take for example DeepSeek, a high-performing open-source Chinese AI model. Its founding team consists of millennial engineers, all graduates of top Chinese universities – a clear sign that China's academic system is now producing globally competitive frontier talent. The assumption that only Silicon Valley or Cambridge could lead innovation no longer holds.

What this means for expats / foreign investors: With world-class engineering talent concentrated in a few urban zones, Shanghai offers not just capital efficiency, but brain efficiency. Founders here can tap into high-skill, low-turnover talent pools that rival (and in many cases, outmatch) Silicon Valley.

5. AI Collaboration Opportunities Are Growing

One unique aspect to China's governing system is its ability to de-emphasize short-term profit motivations, in favor of long-term stability and prosperity. This is why, areas of global concern, like the climate crisis, is something that will always remain a top priority for Chinese leadership.

This attribute, for those outside China, presents huge stable collaborative opportunities in sectors like:

• Green tech + AI (e.g., optimizing energy grids, emissions tracking)
  
• Health-care AI (especially for aging population)
  
• AI-powered logistics (a major priority in port-centric Shanghai)
  
• AI ethics, safety and governance frameworks – China wants to shape these globally and often invites international collaboration.
  

What this means for expats / foreign investors: Rather than compete head-on, Western startups and researchers may find high-impact partnerships in sectors China wants to develop jointly with the world – especially where tech intersects with sustainability, health, or governance, priorities that for China, won't change due to short-term political cycles. This is excellent for long-term investment, career and idea planning.

Shanghai already taking action on making the city more business-friendly

Shanghai has been an example to the rest of the nation in many regards. For example, 2023 marked the 10th anniversary of the establishment of the Shanghai Pilot Free Trade Zone. The city itself had produced a large number of transferable institutional innovation achievements, such that among the 302 innovation achievements of all of China's free trade zones, 145 of those were initiated here, in Shanghai.

This year, in March, China released a new playbook for international investors. And earlier this month, Shanghai released a raft of 26 measures intended to improve doing business in the city.

Some final thoughts...

We're moving toward a more multi-polar world, one that is on the brink of being completely turned upside down by technology whose power we might not yet be able to fully fathom. But today, President Xi put a spotlight on Shanghai and gave it a mission. Plenty might adopt the notion "let's wait and see." But there are yet still those who have learned not to underestimate a city like Shanghai. After all, any long-time expat like myself will say assuredly... Shanghai's 30-year metamorphosis is astounding – and perhaps only a whisper of what is yet to come.