SHANGHAI’S headquarters economy is expanding as more multinationals set up regional hubs in the city.

In August, local authorities introduced new rules offering up to 5 million yuan (US$700,000) in start-up funding for newly established regional headquarters and R&D centers, and up to 10 million yuan for upgrades.

Shanghai was already home to a total of 1,060 regional headquarters of multinational corporations and 631 foreign-funded R&D centers by the end of September.

Many global firms have cited the city’s favorable business environment and pledged further investment.

Sonova

Sonova Group, the world’s largest hearing-care solutions provider, said it will maintain its commitment to the Chinese market and continue investing in Shanghai, where it established its China headquarters in 2022.

Through sustained investment, Sonova has established a comprehensive localized value chain encompassing production, R&D, sales, and service. In 2015, Sonova established an innovation and R&D center in Shanghai.

The enhanced capabilities of the Shanghai headquarters have significantly accelerated Sonova’s local innovation and product launch cycles while enabling efficient resource utilization.

For instance, it developed the Phonak Chinese language processor tailored to the tonal characteristics of the local language and the listening environments in China.

In February this year, its hearing aide solutions brand Phonak launched a new family of hearing aid devices based on its innovative Infinio platform in China, the device being powered by a dedicated real time artificial intelligence chip with speech-from-noise separation.

Phonak’s proprietary Deepsonic chip offers real-time AI processing to instantly separate speech from background noise.

“Shanghai serves not only as a hub for management, R&D, and talent, but also as a vital strategic gateway to the vast Chinese market,” said Fang Fang, general manager Sonova China.

Sonova has also entered into a strategic partnership with East China Normal University to jointly explore R&D opportunities, strengthen industry-academia-research collaboration, enhance professional training and educational standards, and raise public awareness of hearing health.

The establishment of the Shanghai headquarters has played a pivotal role in Sonova’s expansion into the Chinese market, enabling the company to respond with high “strategic agility” to the rapid changes in the Chinese market.

Sherwin-Williams

Sherwin-Williams, a leading paint and coatings provider, is committed to staying close to local customers’ demand and continues to offer high quality solutions in line with China’s emerging sectors such as new energy vehicles.

Its Asia-Pacific regional headquarters was set up in downtown Jing’an District in 2019 and houses all of Sherwin-Williams’ business units in Asia, including Automotive, Coil, General Industrial, Industrial Wood, Packaging, and Protective & Marine.

“We attach great importance to the China market and Shanghai holds a vital position in our strategy,” said Henry Wu, managing director of Sherwin-Williams Asia. “Our Asian headquarters plays a critical role in advancing local research work and speeding up new product launches.”

In recent years, the American company has introduced green and sustainable solutions in sectors such as construction machinery, coil and profile materials, home furniture, and food packaging, all of which have gained market recognition.

“We’ll continue to focus on high-growth industries like new energy vehicles and smart manufacturing to extend the application of our products in a wider range of industries,” Wu noted.

Sherwin-Williams’ business covers multiple industries, including industrial manufacturing, furniture decoration, building infrastructure, transportation, energy resources, and packaging containers.

In Shanghai, its clients include renowned enterprises such as electric vehicle firm NIO, Baosteel, MCC Steel Structure Tech Corp, heavy industry machinery manufacturer Longking Holdings, and home furniture maker and vendor Yeswood.

The firm already offers a portfolio of products and solutions designed to meet the varying needs of the construction, furniture, industrial, packaging and transportation sectors in China.

“We are dedicated to driving new product development and supporting the green transformation of our customers. We have established a rapid response mechanism from R&D to application and we will continue to enhance production facilities, upgrade technology platforms, and deepen our local footprint,” Wu said.

Kerry Food

Kerry Group, a leading provider of flavor and nutrition solutions, has expanded steadily in China since entering the market in 1999. It now employs over 1,400 people and runs seven production sites nationwide.

The company set up its business in Xuhui District’s Caohejing area more than two decades ago and relocated to Eternal Park in 2019, where it opened a new Regional Technology and Innovation Center.

According to Vivian Jiang, general manager of Kerry Food China, openness, innovation, and inclusiveness are marks of Shanghai’s distinct urban character, and these factors have empowered the development of the company’s regional headquarters in the city.

Jiang said she’s been impressed by the improvement in the business environment in recent years, as local government authorities have taken into consideration some of the most pressing issues of the company.

Kerry Food has kept up investments in innovation and sustainable development, while also introducing imported products and solutions such as cheese, protein products, probiotics, natural extracts, and other functional ingredients to meet the high-quality demands of Chinese consumers.

With strong support from the Shanghai government, the firm has reduced institutional transaction costs, safeguarded supply chains, and successfully promoted innovation transformation. “The establishment of our Shanghai headquarters has solidified our organizational structure and business model, bolstered client confidence, and propelled our long-term high-quality development,” she noted.

Shanghai has simplified procedures for the setting up and registration of foreign food firms and the city’s prime business environment has helped it accelerate new product launches. The integrated customs clearance has also reduced the time required for its import clearance, saving on logistics costs.

“We have significantly shortened the period from product innovation to mass production so that we can keep up with customer requirements, and we can also easily access end-to-end services, spanning raw materials, production equipment, packaging materials, and logistics,” Jiang added.