The construction of investment projects continues under the scorching sun. In an open space near Zhujian Road and Jinguang Road in Minhang District, dozens of pile drivers are working around the clock.

This is Yunnan Baiyao’s Shanghai International Center Project with a total investment of RMB 1.55 billion, which broke ground recently. “We strive to build it into a bridgehead for Yunnan Baiyao in the global competition in three years,” said Zhang Zebin, Office Director of Yunnan Baiyao Group. It’s a major strategic choice made by Yunnan Baiyao after the mixed-ownership reform. If the company wants to achieve more in the next century, it needs to make nationwide deployments. If it wants to enter the global market, it will need to establish a presence in Shanghai.

Yunnan Baiyao is not the only one that is accelerating deployments in Shanghai. Data show that in the first half of this year, private investment in Shanghai increased by 18.5% year on year, and the headquarters of an increasing number of private enterprises across the country are gathering in Shanghai.

It is no accident that so many enterprises choose Shanghai

In Midea’s global innovation park in the West Hongqiao Business Area in Qingpu District that broke ground at the beginning of the year, a construction team made up of nearly 300 workers is working at full speed to build infrastructure. In Lin-gang Special Area, SenseTime’s “super engineering” artificial intelligence supercomputing center has entered the home stretch, and will become another trump card after being put into operation. In Maqiao Town, Minhang District, the building of CloudMinds Intelligent Robot Industrial Base is undergoing final fit-out, and a world-leading intelligent robot production base has emerged... An increasing number of private giants are establishing international headquarters, R&D headquarters and second headquarters in Shanghai, hoping to achieve better development and gain new competitive strengths in global competition.

Shanghai’s private economy is jumping to a higher level in terms of scale and quality. Last year, it generated a tax revenue of RMB 477.77 billion, accounting for 38.6% of the city’s total, an increase of 1.5 percentage points from 2019, reaching a new high. Among the 37 Shanghai-based enterprises that have been listed on the STAR Market, 22 are private enterprises. The figures show that Shanghai’s private enterprises have become one of the three pillars together with foreign enterprises and state-owned enterprises.

According to the data released by Shanghai Municipal Bureau of Statistics, the growth rate of private investment in Shanghai in the first half of this year was 7.6 percentage points higher than that of total fixed asset investment and 3.1 percentage points higher than that of national private investment. Specifically, industrial private investment increased by 32.7%, and several private investment projects in biomedicine, artificial intelligence and civil aviation exceeded RMB 100 million.

The leaders of Shanghai have repeatedly emphasized that Shanghai does not favor enterprises of certain ownership types over others, and has always considered private enterprises to be an indispensable, important force. It has been trying hard to create a market environment which allows fair competition between enterprises of various ownership types and treats them equally.

Having participated in the Yunnan Baiyao project, from the beginning to the very end, Zhang Zebin said that Shanghai’s advantages as an international metropolis is surely attractive for enterprises, but to a certain extent, it was due to Shanghai Municipal People’s Government that they finally made up their mind.

It’s no accident that Yunnan Baiyao’s international center settled down in Shanghai. As early as 2019, Rong Zhiqin, Deputy Director of Shanghai Municipal Commission of Economy and Information Technology, headed a team to visit Yunnan Baiyao many times to introduce Shanghai’s industrial planning, express sincerity to the company’s management personnel, and invite its leaders to Shanghai for negotiations. “After we decided to choose Shanghai at the beginning of this year, the leaders of Shanghai Municipal Commission of Economy and Information Technology showed us around the city to find a perfect site, and analyzed the pros and cons of each site. They made responses to our various requirements tirelessly and patiently, and assigned a commissioner to show all relevant policy documents to us and interpret them one by one.” Zhang Zebin said that the government departments are professional and efficient, and their close rapport with enterprises feels “particularly comfortable.” After choosing Minhang, the leaders of Minhang District attended to the matter personally and arranged the schedule inversely. It only took five months from land acquisition and project approval to the start of construction, which was ahead of the schedule set by the company’s board of directors.

Greatly encouraged by Shanghai’s sincere attitude, Yunnan Baiyao has decided to increase investment in Shanghai on the basis of initial investment.

Accelerate the clustering of headquarters of private enterprises

Midea Group has completed the main body registration, land transfer and project launch in less than a year, and truly felt Shanghai’s sincere attitude towards private enterprises as an “outcomer.”

Fang Hongbo, Chairman of Midea Group, remarked that “The simple, efficient, professional and thoughtful government services of Shanghai have deeply impressed Midea, and convinced us that we have made the correct choice.” The global innovation park in Shanghai will become the headquarters of Midea’s global operations and core arena of innovation upon completion after four years, forming dual core R&D centers with Midea’s global innovation center in Foshan. It will accelerate the company’s independent R&D and cultivate innovation advantages for global competition.

If you take a look at the private enterprises that have settled down in Shanghai in recent years, you will find that “headquarters” is one of the most prominent features, which also coincides with Shanghai’s plan to develop the headquarters economy.

Zhou Yuanzhu, President of Shanghai Institute Corporate Culture & Brand, who has been engaged in the research of corporate strategy development for a long time, believes that the headquarters economy with multiplier and spillover effects is an advanced economic development method that integrates value chains. Shanghai has a supporting system made of talent, finance, trade fairs, shipping and logistics, education and health care, convenient transportation and livable environment that is compatible with the development ecology of headquarters economy. Meanwhile, it’s the central node of domestic circulation, the strategic link between domestic and international circulations, and the leader of economic development in the Yangtze River Delta, which have driven many private enterprises to seize the opportunity to set up Chinese and global headquarters in Shanghai. By virtue of Shanghai’s special advantages, private enterprises can make better deployments in China and beyond. Data show that Shanghai has certified 274 headquarters of private enterprises, with the annual business revenue exceeding RMB 3 trillion and creating more than 500,000 jobs. Their businesses cover manufacturing, wholesale and retail, information services, science and technology and other fields. They have become a vital force for Shanghai’s economic and social development.