Shanghai 2023: Seeking new opportunities for development - 2023-02-27
Last year, Shanghai experienced negative economic growth for the first time since the reform and opening up began, but this has not hurt its vitality. The government’s financial resources are now more balanced, and market entities are protected from the fallout. This gives us strength and confidence. More importantly, we have clearly seen where the problem lies and worked out how to move forward better.
For 2023, most international organizations seem to be pessimistic in their growth forecasts, but we are aware of the opportunities amidst crises and eager to act on such opportunities. What are the "opportunities"? First, after China and the United States respectively rounded up their domestic political agendas last year (i.e. the 20th CPC National Congress and the US mid-term elections), a pragmatic window period has emerged. Second, the US dollar index cycle has approached a turning point, the Fed has slowed down its interest rate hikes, the international commodity market has stabilized and recovered, and hedge funds in the international capital markets have also begun to flow out of the three main US stock exchanges to Asia and enter the Chinese mainland through Shanghai-Hong Kong and Shenzhen-Hong Kong stock connects. In January this year, there was a net inflow of RMB 140 billion in northbound funds (vs. only RMB 90 billion last year). Third, a general decline in international commodity prices has avoided a financial policy dilemma for China to both prevent (imported) inflation and stabilize growth. Fourth, the central government is stepping up its policy support, while policy coordination is improving and the policy effect is taking hold.
We value more the fact that clear marginal improvement has emerged in the external environment for stabilizing foreign trade and foreign investment. After the Spring Festival, Shanghai has taken two major measures: introducing its Business Environment 6.0 (including 195 reform measures) to build soft power, and unveiling 191 major projects (with a total investment of RMB 215 billion) to boost hard power. To seize the opportunity and effectively mobilize global factor resources, Shanghai attaches importance to institutional opening-up in its business environment building by taking China’s national strategies as the "starting point" and the World Bank’s Business Enabling Environment (BEE) as the benchmark, making the city the first and the only place to do so in China. Its promotion of major projects this year has shown three characteristics. First, start early, and speed up construction work. In January this year alone, 160 projects were signed, with a total investment of RMB 100 billion, and 60 projects started construction, with an investment of RMB 70 billion. Construction work continued throughout the Spring Festival holiday period, and companies immediately began construction after obtaining land acquisition approval, with the approval list released after the holiday so as to expedite project implementation. Shanghai is also making active preparations for the Global Investment Promotion Conference to be held in April. Second, focus on leading projects, and make key breakthroughs. The new projects include a high promotion of technology projects, with the upgrading of three leading industries as the focus. These projects include a large number of ongoing projects that are capable of driving the rapid development of high-end industries, such as the SMIC Lin-Gang Project, ABB Robotics, COMAC Engine and United Imaging Global R&D Headquarters projects. Shanghai now pays high attention to the leading and driving role of super factories and top-notch enterprises. It has put forward the new idea of "business and investment promotion across the industrial chain", placing special emphasis on "all-round factor safeguard" for major foreign investment projects. Shanghai's top leader has held a direct video dialogue with the president and CEO of GE HealthCare, which will set its China headquarters in Shanghai and envision the city to be one of its global manufacturing and innovation centers. Third, grasp the present, and plan for the future. The 62 infrastructure projects introduced so far include the Pudong Comprehensive Transport Hub (i.e. the expansion of Pudong Airport Phase III & IV and the Shanghai East Railway Station Hub), Shanghai-Suzhou-Nantong Railway Phase II, Chongming Rail Transit Line and the Northern Xiaoyangshan Development Project. All these projects boost our confidence, raise our expectations and enable us to see the future.
Yang Jianwen, the author of this article, is a senior expert at the National High-End Think Tank of Shanghai Academy of Social Sciences. The views expressed in the article do not necessarily represent the views of Touch Shanghai.
Source: Touch Shanghai
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