One of the world's biggest mega-cities, Shanghai ranks as the best city for foreign investment in China according to a report released in August by FDI Intelligence, a subsidiary of the Financial Times. Three major Chinese provinces, namely Shanghai, Beijing and Guangdong, stand out for their economic potential and the ease of doing business. In this study, a total of 31 Chinese cities were assessed on their economic potential, human capital and lifestyle, cost-effectiveness, connectivity and business-friendliness.
The market analysis reveals that China has attracted 9.67% of the world's total foreign direct investment (FDI) from 2003 to 2015. Moreover, its huge market, comprising more than a billion people, provides many opportunities for foreign investors thanks to its high growth potential.
On a regional level, Shanghai is praised for its outstanding performance in terms of connectivity, its business-friendly environment, economic potential, human capital and the lifestyle it provides to its inhabitants. Indeed, the province has recorded the highest rate of foreign investment than other provinces from 2011 and 2015.
Investing in Shanghai: benefits
If you are looking forward to invest or start a business in Shanghai, you will benefit from a developed economy which is primarily focused on business services, financial services and hi-tech industries. Moreover, from 2011 to 2015, nearly 40% of companies providing business services 30% of those involved in financial services are based in the province. Shanghai is thus known to be an international financial hub, especially thanks to the presence of many banks and financial institutions such as Citigroup, Lloyds and HSBC, among others.
Shanghai also hosts more than 90,000 companies involved in the knowledge-based sector. Several other sectors such as information and communication technology, software, manufacturing of industrial machinery, equipment and tools, chemicals also make a significant contribution to the provincial economy.
The world's busiest container port, located in Shanghai, provides logistic opportunities to many manufacturers. Transport and telecommunications networks are deemed to be the most efficient in the country.
The capital city
Beijing, for its part, ranks 2nd thanks to its huge economic potential. Indeed, the capital city has received many investment projects during the past few years. It can also boast having the lowest unemployment rate in China, that is 1.21% for a population of over 20 million inhabitants. Note that the Chinese government has recently been working on the revision of procedures so as to facilitate investment as part of its “Go Global” strategy.
Ranking 3rd, Guangdong Province, located in Southeast China, has attracted nearly 18% of foreign investment in China, especially in the transport sector. Several companies such as German firm Deutsche Post, AP Moller-Maersk from Denmark and Irish company PCH International have set up there, creating some 1,500 jobs in the Futian Free Trade Zone, in Szhenzhen. As the most densely populated Chinese province, with over 100 million inhabitants, Guangdong is deemed to be one of the country's main pillars for freight traffic.
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