During the annual session of the National People's Congress that ended yesterday, Chinese President Xi Jinping urged the city to continue to set the pace in seeking development innovations.
"Shanghai officials should free their minds, seek new horizons and be an example to the nation," said Xi. He said the city should deepen Free Trade Zone reforms, promote science and technology, improve social management and lead the Party in an all-round and strict manner.
Shanghai's efforts in promoting innovation and new technology industries lifted the city's economic growth above the national average last year for the first time since 2008. The municipal government has pledged to make the city a better place for domestic and foreign companies alike to thrive. "Facing a tough and complicated external environment, the city will solidly implement President Xi's new ideas and strategy in managing national affairs" the Shanghai Statistics Bureau said in a statement last month. "Shanghai strives to move forward in economic and social development, with positive progress in pushing innovation, economic transformation and industrial upgrading."
The city's wholehearted embrace of new technologies and promotion of the services industry is reflected in economic data. Services last year accounted for 70.5 percent of Shanghai's total economic output of 2.75 trillion yuan (US$400 billion).
More encouragingly, growth in high added-value service sectors registered above average. The added value of financial services rose 12.8 percent, while information services gained 11.9 percent.
Last year Shanghai invested more than 100 billion yuan, or 3.8 percent of its GDP, in research and development, slightly above the 2015 allocation.
The city last year won state approval for its ambitions to become a global technology and innovation center by 2020, with greater support for entrepreneurship, research investment and major science projects.
The city government has drafted plans for the Zhangjiang Science City, begun the construction of major science infrastructure projects and nurtured entrepreneurship and innovation.
The Zhangjiang Comprehensive National Science Center, which will begin construction this year, aims to improve market-oriented systems to commercialize scientific and technological achievements. More will be done to recruit international professionals to the task, according to the government report released in January.
"China's economic transformation is spurring the creation of new drivers of growth, new industries, new institutions and new opportunities in the technology and innovation space," said Egidio Zarrella, head of clients and innovation of KPMG China. "Shanghai is ranked first overall in the survey as a future tech leader, with its strong regional leadership in financial markets and numerous high-tech parks in Pudong." He also cited the city's growing influence in digital media and entertainment industries. Shanghai's cosmopolitan lifestyle and favorable climate can help the city attract top talent, Zarrella said.
Continuing reforms being undertaken in the city's Free Trade Zone are essential in cementing Shanghai's leadership in international markets.The zone, which covers some 121 square kilometers, comprises the Lujiazui financial hub, the Jinqiao manufacturing zone, the Zhangjiang high-tech base and the three bonded areas of Waigaoqiao, Yangshan and Pudong International Airport. It is home to more than 37,000 companies, including 6,300 financed by foreign firms.
Free trade zone management officials have pledged to further open the zone to foreign investment, expand the use of free trade accounts and simplify administrative procedures.
Foreign investment will also be allowed greater freedom in banking, securities broking, futures trading, insurance and financial fund operation.
"Openness is the key to competitiveness and the greatest advantage of Shanghai," said Liu Fengming, a vice president of General Electric. "Shanghai is constantly pursuing pilot reforms in the Free Trade Zone and turning itself into a center of finance, trade, shipping and technology innovation. Foreign companies see huge opportunities in the Shanghai government's willingness to listen to the market and to improve policies to nurture a business environment with legal protections and commerce convenience."