Shanghai certifies MNC HQs, solidifies top spot for foreign businesses

The municipal government of Shanghai certified 20 regional headquarters of multinational corporations and 10 research and development centers in the city on Thursday, showing the metropolis' enduring attraction as an investment destination for foreign firms, according to experts and senior executives of multinational enterprises.

"In the last 10 years, we've invested over 6 billion yuan ($889.4 million) in China … we are continuing to invest here because we believe in the country and the opportunities for all of us," said Allan Gabor, president of Merck China, one of the multinational corporations newly certified by the Shanghai government for its regional headquarters.

As Gabor stated, the reason the company set up its regional headquarters in Shanghai is very simple — Shanghai and the Yangtze River Delta region have spared no effort in creating a prime business environment.

"As the nation's economic center, Shanghai is substantially attractive to international companies, where they can explore tremendous business possibilities in the city," said Qi Xiaozhai, vice-chairman of the Commerce Economy Association.

As Shanghai is building itself into a center for economy, finance, trade, shipping and technological innovation, the prospects are bright for international corporations to build and expand their presence in the city, Qi added.

Shanghai's actual use of foreign direct investment rose 0.4 percent year-on-year to $23.96 billion in 2022 and the city solidified its position as the best place for foreign investment on the Chinese mainland. As of 2022, Shanghai is home to 891 multinational corporations' regional headquarters and 531 foreign-funded R&D centers.

"In the past few years, even during the COVID-19 period, we have continuously increased our investment in China, in Shanghai in particular," said Yu Feng, president of Honeywell China.

According to Yu, Honeywell's Asia-Pacific headquarters was in the first batch of certified multinational corporations' regional headquarters two decades ago, and the company's business expanded vigorously in the country, covering aerospace, building technologies, performance materials, safety and productivity solutions.

"We believe that Honeywell will make new contributions to the high-quality development of Shanghai and China as a whole," said Yu.

Having its Asian regional headquarters certified on Thursday, Tyson Foods is another enterprise that has always recognized China as one of its most important markets.

According to Wu Tong, president of US-based Tyson Foods' China and South Korea operations, the company invested in three new plants even during the COVID-19 outbreaks. The Shanghai headquarters also serves as an R&D and talent sharing hub, as well as a financial center for the company.

"We are going to make good use of these functions and let the regional headquarters play a neutral role for Tyson's business in China," Wu said.

Likewise, Switzerland-based automotive technology company Garrett Motion completed the injection of $50 million foreign capital from its global headquarters into Chinese investment companies in 2022, as the company is committed to R&D and expansion in high-tech fields for the future, according to Zhang Yue, vice-president of Garrett Motion.

Garrett's China headquarters was certified by the municipal government on Thursday. Through investment in new technology and project implementation, such as electric turbo-charging, hydrogen fuel technology and intelligent connected vehicle software, the development of new energy and smart connected mobility has accelerated, Zhang said.

The municipal government has set an ambitious target of hosting a total of 1,200 MNC regional headquarters in the coming five years, according to its work report delivered by Shanghai Mayor Gong Zheng during the first session of the 16th Shanghai Municipal People's Congress in early January.

"Such a goal is highly likely to be realized. In fact, with the expanding number of multinationals setting up their regional headquarters or R&D centers, their presence in China has become part of the city's attraction for more global companies to come to China," said Qi.

"The annual tone-setting Central Economic Work Conference in December requested us to attract foreign capital with stronger efforts and make the best of foreign investment," said Zhu Yi, deputy director of the Shanghai Municipal Commission of Commerce.

According to Zhu, under such guidance, the municipal government will spare no effort in strengthening communications with foreign enterprises and providing a better business environment, to allow companies around the world to enjoy great opportunities in the China market.

Shanghai has demonstrated that the city will consistently reform and open up to the world, which was witnessed during the fifth China International Import Expo in November, Gong said.