The Shanghai Government has committed to easing foreign direct investment (FDI) regulations to attract foreign investors to China’s financial hub.
Speaking at the launch of a week-long investment promotion event on Tuesday 26 March, Shanghai Mayor Gong Zheng said the city is “expanding high-level opening up… and continuing to create a first-class business environment that is market-oriented, legalised and internationalised”.
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“We will make sure not to disturb you unless necessary and respond to your requests in a timely manner,” Zheng told an audience of Chinese and foreign businesses representatives.
The address came after executives from multinationals met with government officials earlier this week in Beijing where China Premier Li Qiang vowed to open up the economy further to international businesses.
The push for FDI in Shanghai follows the release a month ago of a “2025 action plan for stabilising foreign investment” by the national government. The plan aims to facilitate FDI in the telecommunications and biotechnology industries, calls for more transparency around government procurement and for the gradual opening of the education and cultural sectors to international businesses.
Chinese Commerce Ministry officials said that rising geopolitical tensions had impacted foreign investment and led some companies to diversify their supply chains away from China. FDI dropped 13% in January to 97.59bn yuan ($13.46bn), following a 27.1% dive in 2024.
The country’s push for foreign investment comes amid a barrage of US tariffs that are rattling the global economy and rising trade technology restrictions against China. Even before US President Donald Trump’s administration arrived, there was a concerted effort by the US Government to limit China’s development of transformative tools like AI.
Given the heightened uncertainty, many businesses are looking to de-risk their supply chains and move production away from China into neighbouring countries. China’s conflict with Taiwan is seen as a high-risk situation, where fighting could suddenly break out.
