Lujiazui, Shanghai's financial center. [Photo by Meng Yuhan/WeChat ID: pudongtalenthub]

Shanghai’s Pudong New Area is striving to become a pioneer of reform and opening-up at a higher level, a vanguard in the creation of a modern socialist country, and an example that highlights the Chinese people's confidence in the path, theory, system, and culture of socialism with Chinese characteristics。

Pudong first started its journey of development and openness 33 years ago.

Development entails the growth of urban space and the exploration of resources, while openness has become an inherent characteristic of Pudong. In recent years, guided by the national strategy, Pudong has continually demonstrated its aptitude for reform and opening-up, thriving as a result.

In July 2021, China issued guidelines to support the high-level reform and opening up of Pudong New Area in Shanghai. The guidelines were jointly released by the Communist Party of China Central Committee and the State Council, and listed measures to build Pudong into a pioneer area for socialist modernization.

As Pudong enters this new era as a pioneer, it has taken on the responsibility of spearheading reform, leading opening up, and fostering integrated innovation with the ultimate goal of rejuvenation.

While the burden on its shoulders has grown heavier, Pudong has adapted by taking steady steps forward.

Pioneering higher-level opening-up 

From the inception of the China (Shanghai) Pilot Free Trade Zone in Pudong, the emphasis has been on bold exploration, fearless experimentation, and independent improvement. The goal is to rapidly establish a series of innovative institutions that can be replicated and promoted, along with accelerating the trial of effective measures to facilitate investment, trade, and a standardized rule of law environment.

Significant progress has been made in the facilitation of investment and trade and financial opening up, resulting in the emergence of several foundational institutional innovations. These innovations have established a basic institutional system and regulatory model that align with international investment and trade rules.

A key measure in this regard is the implementation of a negative list for foreign investment. Over the past decade, the number of special management measures for foreign investment in the pilot free trade zone has decreased from 190 items to 27 items. Moreover, there are now zero items on the list related to the manufacturing sector.

On Oct 24, Umicore Group's first research and development center in China was officially launched in the free trade zone. Umicore Group is a global leader in circular material technology and ranks among the top 50 chemical energy companies worldwide. The reduction of restrictions and the broadening of foreign investment opportunities through the negative list have made it more convenient for companies to invest, according to an official with Umicore Group.

The shortening of the negative list has also facilitated the implementation of numerous national pioneer projects in 60 open areas within the free trade zone. It has contributed to the maturity and standardization of the "pre-entry national treatment plus negative list management system," which has been incorporated into the Foreign Investment Law.

For Pudong, as a representative of China's participation in global competition, transitioning from factor-oriented opening to institutional-oriented opening is not only strategically supported but also facilitated by 10 years of free trade zone development.

In June of this year, the State Council outlined plans to promote institutional-oriented opening in pilot free trade zones and high-standard free trade port pilots with international conditions. The effects of this approach have become apparent in areas such as pilot imports of remanufactured products, encouraging overseas professionals to provide services in China, and implementing new environmental protection regulations for pilot projects.

In September, the first batch of "pilot imports of key industries’ remanufactured products" successfully cleared customs. This included the import of a remanufactured engine for a Volvo Construction Equipment (China) Co Ltd articulated off-highway dump truck. Previously, China managed the import of remanufactured products based on used mechanical and electrical product regulations. Institutional innovation has unleashed industrial dividends, leaving foreign-funded enterprises in various fields satisfied with the business environment.

Comprehensively deepening reform

Shanghai's Pudong New Area is dedicated to advancing comprehensive reforms, particularly focusing on the development of the China (Shanghai) Pilot Free Trade Zone. In September, important instructions were given to further enhance the development of the free trade zone, recognizing the achievements and experiences of the past 10 years and providing guidance for the future. These efforts aim to deepen reform and opening up in the modern era. 

Pudong's success can be attributed to its commitment to reform. For instance, themed homestays highlight the area's proactive approach. Back in 2016, Pudong implemented policies to promote the development of themed homestays as a new kind of business. However, only a few homestays were able to meet requirements and obtain comprehensive industry licenses, indicating the need for improved regulation.

Recognizing that existing methods were hindering investment and enthusiasm, Pudong quickened its pace and implemented a new round of reforms. In March of this year, 50 themed homestays collectively obtained a "provisional license," further regulating the market.

However, the next challenge will be difficult, as Pudong aims to transform from a "nursery" into a "forest." In the guidelines released in 2021, the central government granted Pudong the power of local legislation, enabling Pudong to deepen its pioneering trial reforms.

So far, the Standing Committee of the Shanghai Municipal People's Congress has issued 18 Pudong New Area regulations, such as "one integrated license" and "intellectual property protection." These regulations focus on the common needs of enterprise development and specific requirements in key industries. Pudong New Area has also introduced 17 management measures, such as the "commercial mediation system," progressively paving the way for legislation to drive and promote reform and innovation.

Moving faster toward self-reliance in science and technology 

Accelerating self-reliance through scientific and technological innovation is another priority for Pudong. Last year, Shanghai received approvals for four first-class domestically-produced innovative drugs, taking the lead nationwide. Three of these drugs originated from Zhangjiang in Pudong, known as China's Medicine Valley.

The development of the biopharmaceutical industry in Zhangjiang has been steadily progressing due to its strong foundation in talent, technology, and the industrial chain. However, continuous systemic support is necessary for innovation and growth in the industry.

Since it started working to become a pioneer area, Pudong has implemented various measures to support the development of Zhangjiang. They include the formulation of the "Three-Year Action Plan for Expanding and Improving Zhangjiang Science City (2022-2024)," the establishment of an industry development fund for the Pioneer Area, and the introduction of policies to integrate the medical and industrial sectors. These initiatives have improved conditions for the future development of the biopharmaceutical industry.

In the second half of this year, Pudong has worked to connect the government with market resources. By establishing a diverse array of platforms, Pudong aims to bridge the gap between supply and demand, empowering scientific innovation through policies and financial systems.

Pudong recently launched a platform to connect finance and industry, strengthening resource integration between Zhangjiang and Lujiazui. Through this platform, a financing demand list was created for the first batch of 100 high-tech enterprises in Zhangjiang Science City, covering integrated circuits, biopharmaceuticals, artificial intelligence, and other leading industries. Simultaneously, an industrial capital matrix focusing on Zhangjiang Science City and high-tech industries, led by state-owned venture capital, has been established to provide comprehensive support across various types of capital.

Pudong frequently organizes roadshows that matches innovative projects seeking financing with investment institutions. Pudong's emphasis on high-tech and cutting-edge technologies, along with its advantages in leading and future industries, is driving a high-level cycle of "technology, industry, and finance." This cycle is contributing to increased self-reliance through scientific and technological innovation, strengthening Pudong's development.