Shanghai offers financing and land-use support to foreign investors, as city commits to meet 5 per cent economic growth in 2024

“We will give more policy guarantees in the areas of land use, energy supply, environmental evaluation and financing, [while] encouraging more foreign companies to invest in green transition, digitalisation and technological innovation,” Gong told a press conference after the close of the annual Shanghai People’s Congress. “We will deliver better services to international investors.”

His pledge reflects Shanghai’s commitment to meet the local economy’s 5 per cent growth target for 2024 after failing to achieve last year’s 5.5 per cent economic goal.

Shanghai Mayor Gong Zheng is offering more policy support to foreign investors in mainland China’s financial and commercial hub. Photo: Weibo

“Shanghai needs to make one big jump, or more, to achieve that lofty goal,” Gong said.

With a population of 25 million people, the metropolis attracted US$24 billion in foreign funds last year, surpassing the previous record of US$23.96 billion in 2022.

Medical devices maker Boston Scientific, vaccine producer Moderna and electric vehicle giant Tesla last year agreed to establish new production facilities in Shanghai as part of their expansion plans in the world’s second-largest economy.

Those new projects, however, have not yet started commercial operations.

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“Foreign-funded projects often play an important role in driving Shanghai’s growth,” said Ding Haifeng, a consultant at local financial advisory firm Integrity. “Landmark projects like Tesla’s Gigafactory and Disneyland have also honed Shanghai’s image as an investment magnet.”

In his first visit to Shanghai since 2020, Chinese President Xi Jinping last November directed local government officials to step up efforts to revive the country’s economy. Xi stressed the importance of cutting red tape and simplifying customs processes at the city’s free-trade zone to facilitate exports and imports, according to a Xinhua report.

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On Tuesday, Shanghai’s Gong said in his work report to the local legislature that the city’s gross domestic product (GDP) rose 5 per cent year on year to 4.72 trillion yuan in 2023, falling short of its 5.5 per cent growth target.

A severe external environment was also a stumbling block to Shanghai’s economic recovery efforts, Gong said on Tuesday.

The city’s exports rose 1.6 per cent year on year to 1.74 trillion yuan in 2023. That increase comes from a low base in 2022, when business in Shanghai was disrupted by pandemic control measures including a two-month Covid-19 lockdown in April and May.

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