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January 2, 2017

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Shanghai a magnet for foreign cash

FOREIGN direct investment in Shanghai, expanding over the past 17 years, surpassed US$18.5 billion last year, the Shanghai Commission of Commerce said yesterday.

That represents an annual increase of 0.3 percent in foreign capital flowing into the city against a background of moderating growth around the world and fiercer competition for investment.

Although the pace slowed from the rise of 1.6 percent in 2015, the commission said such satisfactory results had benefited from an improved regulatory environment, more efficient services and faster internationalization.

“We have seen a relatively stable growth of Shanghai’s foreign direct investment,” the commission said in a statement. “More importantly, the quality of the investment and its performance has exceeded our expectations.”

The commission said the city’s service sector absorbed US$16.3 billion in foreign investment in 2016, up 2.5 percent year on year and accounting for 88.2 percent of the total basket. Sectors such as financial services, information technology, technological research and health care even reported growth of more than 20 percent.

The manufacturing sector attracted US$2.2 billion in foreign investment, with more capital going into advanced electric equipment, new energy and new materials.

Contracted foreign direct investment reached US$51 billion, the commission said.

Jin Xingming, the city government’s deputy secretary-general, said Shanghai would continue to improve the environment for foreign investment.

“The city has benefited a lot from the headquarters economy,” Jin said earlier. “Foreign investment is an important force to drive Shanghai’s growth, especially when the city is carrying out its innovation-driven development initiative.”

Last month, another 33 multinational companies, including SAP, CapitaLand and Shui On, were awarded certificates for setting up their regional headquarters in Shanghai. That made the city home to 580 regional headquarters of multinational companies by the end of last year.

Shanghai also boasted 411 foreign-invested research and development centers, 40 of which were at global level. They helped Shanghai remain the largest base for foreign-invested corporations in China.

Shanghai’s stable economic growth and various reform initiatives, especially the construction of the pilot free trade zone, have kept the city a magnet for foreign investors, the commission said.


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