Pudong New Area of Shanghai is once again at the forefront of China's reform and opening-up.

On Jan 26, the State Council Information Office announced an implementation plan for Pudong's pilot comprehensive reform between 2023 and 2027. As of mid-June, nearly 50 percent of the new round of pilot comprehensive reform tasks had been completed, marking significant progress in the new area's journey towards becoming a leading area for socialist modernization.

This follows a series of pivotal moments in Pudong's history: the 2021 guidelines released to support the high-level reform and opening-up of Pudong and build Pudong into a leading area for socialist modernization, the 2005 approval that allows Pudong to pioneer in comprehensive supporting reform pilots, and the 1990 decision to accelerate Pudong's development.

Reform and opening up have been crucial to shaping modern China, with Pudong serving as a leading example. Over the past 34 years since its establishment, Pudong New Area has remained steadfast in its reform direction, becoming a symbol of China's commitment to innovation and opening up.

Strengthening the integration of reform systems

Promoting Chinese modernization is not possible without the strategic support of science, technology, education and talent, and Shanghai was urged play its role as a leader in this regard and accelerate its progress toward becoming a scientific and technological innovation center with global influence.

As China enters a new stage of development, reforms require stronger integration and efficient coordination. The 2021 guideline from the central government calls for the organic connection and integration of reform measures to form more replicable institutional innovation practices. Pudong has responded by focusing on independent innovation, optimizing its innovation incubation system, and accelerating the integration of its entire innovation industrial chain.

Pudong now boasts 14 major scientific facilities, forming the world's largest and most comprehensive cluster of photon science facilities. With 194 innovative incubators and over 1.6 million square meters of incubation space, Pudong offers low-cost entrepreneurial spaces and comprehensive services for scientific and technological enterprises. As of May, nearly 4,000 start-up enterprises have thrived in Pudong's incubators, nurturing 4,922 high-tech enterprises.

In the past, the focus was on industry-university-research integration. Today in Pudong, reform is moving towards the integration of government, industry, university, research, finance, service and application, shaping a more complete ecosystem for scientific and technological innovation.

In January of this year, the Pudong Venture Capital Group was officially launched, with a focus on technology transfer, and guiding and complementing State-owned venture capital investments. By the end of 2025, the various funds within the Pudong venture capital system are expected to reach a total scale of 400 billion yuan ($55.27 billion).

Not long ago, Haihe Biopharma Co Ltd announced that its innovative drug MET inhibitor glumetinib tablets, with global independent intellectual property rights, had been approved for market listing by the Japanese Ministry of Health, Labour, and Welfare. This is the first innovative drug primarily developed by a Chinese biopharmaceutical company to be approved for market listing in Japan, and it is one of the key projects invested in by the Pudong Venture Capital Group.

Pudong Venture Capital Group invested in Haihe Biopharma last year, providing support for the company in policy consultation, capital empowerment, government-enterprise coordination, and post-investment services, and contributing significantly to accelerating the transformation of the company's research achievements.

Over the past 34 years, Pudong has developed a full-cycle innovation hub from target discovery, drug screening, clinical research, pilot amplification, registration and certification, to mass production and market listing, nurturing over 15 percent of the country's Class I drugs.

With the recent implementation of the drug marketing authorization holder system and the facilitation of customs clearance for research and development special items, policy obstacles that may hinder technological progress are gradually being removed. Less than half a year since the start of the new round of comprehensive reform pilots, with a focus on internal refinement and the exploration of joint regulatory systems, the overseas deployment of innovative drugs led by CAR-T has been accelerating comprehensively.

"For CAR-T cell therapy products to make their way overseas, they must first obtain immune cells from overseas patients, send them to domestic factories for preparation within 36 to 44 hours, and then transport the finished products to medical institutions overseas," said Sun Jing, head of government affairs and public relations of JW Therapeutics (Shanghai) Co Ltd.

Sun added that this means that government departments need to complete a relay race of supervision within 36 hours. "Now, all cross-departmental joint approval channels have been opened."

Today's reform must be comprehensive and systematic and reform and improvement in all fields must be interconnected and integrated, which means that piecemeal efforts and minor adjustments are not enough. In order to accelerate the implementation of pilot reforms in Pudong, Shanghai has established a close and efficient working mechanism between the city and its districts, focusing on strengthening connections between various reforms.

Opening up space for institutional innovation

Reform has been accompanied by the development of Pudong. Over the past 34 years, the new area has continuously deepened reforms, often pioneering new practices nationwide.

Early last year, Pudong released 20 important reform cases. Among them, 10 focus on pioneering reforms and 10 revolve around innovative mechanisms. Most of these cases are new practices that were implemented nationwide for the first time, and some involve major breakthroughs in institutional reforms, such as opening up coastal business services and implementing the commitment-to-entry system.

Pudong is the leading region in Shanghai's development of the digital economy and has achieved phased results in exploring the marketization of data elements.

For instance, Pudong has led in the marketization of data elements, establishing the first domestic data element aggregation area in Zhangjiang Science City. With the Shanghai Data Exchange and other carriers, Pudong supports data management, research, innovation, and transactions, providing comprehensive support for data commerce enterprises.

Reviewing the current situation also reveals that in areas such as digital trade delivery settlements, facilitation of cross-border data flows, new data trading mechanisms, digital asset management, data property operation mechanisms, and public data openness, Pudong represents Shanghai and China, and there is still enormous potential for continuous exploration.

The central government's authorization for Pudong to lead digital economy experiments is clearly reflected in the implementation plan for the pilot comprehensive reform of Pudong. Pudong has responded promptly, and as one of the basic data infrastructure elements, from January to May this year, the transaction volume of the Shanghai Data Exchange exceeded 1 billion yuan, with nearly 3,000 data products traded and over 1,000 data commerce companies gathered.

On June 11, halfway through the implementation of the new round of comprehensive reforms, Pudong released another 30 cases of reform and innovation. Behind another a batch of "national firsts" lies the story of Pudong pioneering new paths through reform.

In deepening institutional opening up, the Shanghai eastern hub international business cooperation zone and the central functional area of China's first pilot zone for Silk Road e-commerce cooperation have commenced construction. The first business of a foreign arbitration institution in the country, the Korean Commercial Arbitration Board's Shanghai Center, has been approved for registration. Additionally, the first representative office of a Middle Eastern foreign patent agency in China has been established in Pudong.

In terms of market-oriented allocation of factors, Pudong pioneered the "2+1+1" system for the recognition of foreign professional qualifications, promoting the integration of international professional qualifications with the domestic professional title evaluation system. The Shanghai Data Exchange has launched its international board for data transactions, leading to the creation of typical cases where data assets are included in financial statements.

The first containerized freight futures variety, the Shanghai Containerized Freight Index (European Line) Futures, has completed the entire process from listing to trading, settlement, and delivery. The Shanghai Petroleum and Natural Gas Trading Center, in conjunction with China National Offshore Oil Corporation, completed the first domestic liquefied natural gas (LNG) cross-border RMB settlement transaction, and in collaboration with China National Petroleum Corporation, completed the first national international crude oil cross-border digital RMB settlement transaction.

From individual breakthroughs to comprehensive reform

The goal of reform is to achieve comprehensive reform through individual breakthroughs. The effectiveness of reform will ultimately be evidenced by the market.

On May 22, at the Pudong New Area Biomedical Industry Innovation and Development Conference, the first batch of innovative drug and medical device products for 2024 was released, including domestically produced MEK inhibitor tulametinib capsules by KeChow Pharmaceuticals.

"Our Class I innovative drug was approved on March 15 and has been included in the Pudong New Area innovative drug and medical device product recommendation catalog, and on May 20, the first prescription was issued," said Tian Hongqi, chairman of KeChow Pharmaceuticals.

The accelerated development of the biomedical industry in Pudong benefits from reforms in drug and medical device evaluation and approval. Products included in the Pudong innovative drug and medical device catalog are fast-tracked for pharmacy committee reviews, ensuring prioritization and widespread use. This reform has significantly accelerated the birth of innovative domestic drugs.

The central government has made clear institutional arrangements to support Pudong's reform. In June 2021, the Standing Committee of the National People's Congress authorized Shanghai to enact legislation similar to that of special economic zones. This allows Pudong to make flexible provisions for laws, administrative regulations, and departmental rules, supporting the new area in formulating relevant management measures in advance.

The rapid development of the unmanned driving industry in Pudong is a prime example of local legislation promoting reform. In March 2023, the implementation rules for promoting the innovative application of unmanned intelligent connected vehicles in Pudong were introduced, facilitating the transition of road testing from closed to open roads.

By July 2023, 15 vehicles from three companies received road testing permits for unmanned intelligent connected vehicles. Haomo Zhixing Technology was recently awarded the first identification mark for innovative applications of unmanned driving equipment in Pudong, marking a significant milestone in the commercial operation of end logistics automatic vehicles in super-first-tier cities.

Using legislation to promote reform, the Shanghai Municipal People's Congress has enacted 18 relevant regulations for Pudong, covering areas such as standardized innovation development, green finance, financial leasing, and high-level intellectual property protection. Pudong New Area has issued 26 management measures in areas such as mandatory product certification exemptions and unmanned driving equipment, providing robust support for reform and innovation.