Shanghai is continuing its seduction drive without the slightest concession. Particularly with the French, who are coming to live in the Chinese megalopolis in ever-increasing numbers. With nearly 1,500 companies members of the Chamber of Commerce and 13,000 expatriates officially registered with the consulate, the city is home to the largest French community in China, ahead of Beijing. In fact, the French presence in China is thought to be closer to 20,000. Why this attraction? Because the French have realised, albeit a little later than other countries, that the city is home to a large proportion of China's corporate activities and that this market represents enormous potential. "A large number of small and medium-sized businesses know that setting up in Shanghai means avoiding failure in France".explains Matthieu Dumont, Deputy Director of the French Chamber of Commerce in Shanghai.
This gamble on the future is matched by the megalopolis' desire to compete fully with its rivals and near neighbours Hong Kong and Singapore to enhance its attractiveness. The first step towards this goal was the opening of a pilot free trade zone last October to test, among other things, the convertibility of the yuan and to establish itself a little more firmly as a financial and commercial centre. Even if, for the time being, the tax advantages usually associated with free trade zones are not yet envisaged. Corporate income is still taxed at 25 %.
Independent laboratory
Located in Pudong and covering an area of 29 km2, the Shanghai Free Trade Zone will soon be the new face of modern China. This project led by Prime Minister Li Keqiang should encourage experimentation and, consequently, reforms that will contribute to a more open economy. It is expected, among other things, to lead to a possible easing of internet restrictions, trade regulations and the possibility of establishing banks with strictly foreign capital. A valuable advantage, given that there are more than 1,000 financial institutions in Shanghai.
"Although the city has a capitalist mindset, and while developing its international trade, Shanghai is increasingly focusing on expanding the local market".continues Matthieu Dumont. While the country's growth was initially linked to exports, today the trend has clearly reversed. China is changing, the former "workshop of the world" is being transformed and production is moving upmarket under the impetus of the middle and upper classes, whose salaries are constantly rising. As a result, the notion of brand image is taking over from cost efficiency, while production is tending to relocate to the countries of South-East Asia.
As part of this drive for qualitative development, we're also banking on another source of wealth: grey matter! In Shanghai, where there are already some sixty research and development centres, knowledge has a future. A virtuous circle, then, as the growth in patent registrations and the notion of intellectual property reassures foreign investors. As much as it attracts them.
Since Expo 2010, whose theme was "a better city, a better life", Shanghai has entered a pivotal phase. Propelled to the forefront of the international stage, the metropolis has established itself as a benchmark in China in terms of infrastructure, means of transport and the environment. "China's main environmental problem is air pollution, first and foremost in Beijing, but also in Shanghai. Moreover, China intends to reduce its CO2 emissions by 62 million tonnes by 2015".explains Sofiane Ouffa, Export Advisor for Infrastructure - Transport - Industry at Ubifrance Shanghai.
Keeping pollution at bay
Shanghai, the economic capital and a city open to the world, has become a showcase for the country's ecological advances. In particular, there is an environmental protection bureau that requires companies operating in the province to achieve very high standards, including a water treatment rate of over 95 %. In addition, the municipality is applying a policy of moving polluting companies - petrochemicals and chemicals in particular - away from the area by creating dedicated industrial parks. Among these, the Shanghai Chemical Industry Park (SCIP), located some forty kilometres away on an isolated site, is subject to strict controls. Despite this, the often intense pollution peaks cannot be eradicated.
In terms of urban transport, the authorities are also making great efforts. For a long time, the metro, which came into service in 1993, had just four lines. Expo 2010 provided the opportunity to open ten more, and the city plans to increase the number of lines to 18 by 2020. The aim is to relieve traffic congestion. Because, under the weight of demographic growth and household purchasing power, the number of cars on the road is constantly increasing. That's why the local authority is now promoting the use of environmentally-friendly vehicles. Already, most of the two-wheelers on the road are non-polluting, and China is the world's leading producer of electric scooters. In another initiative, some of Shanghai's buses are equipped with "supercapacitors", running on electricity or natural gas.
The use of electric vehicles is also encouraged through municipal subsidies. While the cost of a number plate - the city puts them up for sale to keep a lid on traffic growth - runs to 10,000 euros and sometimes more, buyers of non-polluting cars are exempt from paying this price, in addition to receiving purchase subsidies. Carmakers are also benefiting from this policy, with R&D subsidies for hybrid and electric vehicles. More generally, China has set itself the goal of putting more than 10 million innovative vehicles on the road by 2020. "Knowing that Chinese growth has slowed from 10.3 % in 2010 to around 7.5 % in 2013, China understands that its economy also depends on its efforts in terms of environmental standards. To remain attractive to foreign investors, it must try to catch up with Western countries. In 2009 alone, according to the Chinese Academy of Environmental Protection, pollution cost the country the equivalent of €170 billion. Something to think about..."concludes Sofiane Ouffa.
Sustainable coworking
This rise in ecological vitality is now being echoed by the many expatriates who have come to bring their expertise to Shanghai. Such is the case of Jason Inch, Canadian director of LOHAUS - Loft of health and urban sustainability - a coworking space opened in June 2013 in an old mansion in the French Concession. The concept is to bring together independent workers in a studious, eco-friendly space where they can create events with a social mission that encourage sustainable development. The same objective is being pursued by Nitin Dani, who launched the Shanghai branch of Green Drinks in 2009. The credo of this non-profit organisation is to develop a green conscience through educational events. "At the beginning, most of our participants were foreigners, but now we have achieved parity with local people".says a delighted Nitin Dani.
When it comes to town planning, eco-friendly projects are gradually coming into their own. A necessity here too. So, after its polluting industries, it's now the turn of the city's buildings to be put under the microscope, under the leadership of the Green Building Council. While the country currently has only 1 % of green-certified buildings, it aims to reach 10 to 20 % by 2020. In Pudong, the L'Oréal group has opened a LEED Gold (Leadership in Energy and Environmental Design) certified R&D centre.
When it comes to sustainable architecture, the case of Dongtan sheds light on a fundamental movement that is taking its time. Located on the island of Chongming, in the Yangtze delta, it is an "eco-city" with zero CO2 emissions, a mixed residential, work and leisure area. But what should have started in 2010, for the World Expo, is still only in the development phase... For the moment, only an ecological holiday village, with low-carbon houses, is operational. To be continued.
