Business in Shanghai

Shanghai Bund

China, with its $2.5 trillion GDP, a high growth rate, and more than $1 trillion reserve, has become the third largest economy after U.S.and Japan in the 21st century. Shanghai, China’s largest city, in its unique historical and geographical position, is the center for economic power, foreign trade, modern infrastructure, and commercial and industrial growth as well as the world’s largest cargo port.  

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Shanghai, a municipality directly under the central government, stretching over 7,037 kmor 2,717 sq m, with a population of 20 million, is situated on the banks of Yangtze River Delta and on the western coast of the Pacific Ocean.  As the largest contributor of tax revenue to the central government for years, Shanghai did not begin its economic reforms until 1992, and has recorded a double-digit growth ever since.  Shanghai may be known as “Paris of the East” or “Pearl of the Orient” to the world; its historical influence, international diversity, and solid commercial, financial and industrial foundation allows the city to move at an impressive speed in a dynamic and complex environment. 

More and more foreign funds are flowing into the city; more and more people are going to Shanghai to be part of the exciting growth, including those who left China a decade or two ago and are returning from overseas.   Further opening up business sectors to foreigners and the local venture-capital establishment are part of the attraction, which did not exist only a few years ago.  There is no lack of stories such as a young man whose childhood dream was no more than visiting Nanjing Road, now owns a piece of business at the location; a girl whose humble start was not much more than laying bricks, now stands on the top of a real estate empire.  Whether you are from overseas or from rural countryside, Shanghai tends to have a place for you. 

From electronic and information products to petrochemical and chemical processing, from auto making to ship building, from machine and steel manufacturing to biomedicine, from energy to tourism, Shanghai offers it all. Besides highly developed commerce and banking, the new or renewed creative industries such as designs relating to culture/film/digital, industry/architecture, consumption/fashion/advertising, and arts/craft, are also on the rise. Although China is opening up more sectors to foreigners, it is relatively restrictive in terms of setting up new business especially in industries such as the media and telecommunications services.  While joint ventures are the common form, some sectors restrict being minority-owned by foreigners. Whether you prefer joint ventures or wholly owned foreign enterprises or investment, if you search, the chances are you will find the business structure or investment options that suit you in Shanghai.  Every situation is unique. Be aware of your obstacles and opportunities.  With the right strategies, approaches and resources, companies of various sizes can be successful inShanghai.  

The Oriental Pearl Tower, the Pudong New District on the east bank of the Huangpu RiverAt this digital age of our time, Internet has shortened the distance and speed up business for many who dream to establish a global business relationship.  One venue is aHangzhou based business to business, e-commerce Alibaba (www.Alibaba.com), where buyers and sellers meet, exchange information, and do business online.  The online marketplace specializes in global trading and serves small and medium-sized enterprises.  You may just surprise yourself by discovering how quickly you can locate a vendor whom you may have spent months trying to find.   Some make orders and conduct business dealings without a meeting. When you do have a face-to-face meeting, you may find two companies that look incredibly similar on the web are totally different in real setting:  One resides in a rural area with a couple of old workshops while the other is the leading company of its industry.  Which one do you end up partnering with? It all depends on your business needs and the chemistry between you and the overseas partner. Guanxi, simply relationships, or the network of relationships in business, will retain its important role, but in a more dynamic and transparent environment, it may change its significance in its traditional way.

 For details on how to do business and invest in Shanghai, go towww.shanghai.gov.cn.  You may also check other sources available includingthe Chinese Consulate and American Chamber of Commerce close to where you are living in the U.S. or the American Consulate in Shanghai.