Foreign Trade & Foreign Direct

Foreign Trade & Foreign Direct

Shanghai's foreign-invested enterprises have by and large been encouraged by their own results in China and many continue to re-invest and make additional investments to improve their stakes and expand according to the country's vast market potential, its availability of a talented labor pool and favorable production cost ratios. According to statistics, during the 7-year period from 1999 to 2005, Shanghai foreign-invested enterprises increased their investments by a total of US$27.18 billion, amounting to an average increase of US$3.88 billion per annum. A full 30% to 50% of contracted foreign investment each year was as a result of additional capital in-flow from existing Shanghai-based foreign investors.

In 2006, Shanghai approved more than 4,060 FDI projects involving foreign capital of some US$14.6 billion, an increase of 5.4%, with actualized capital amounting to US$7.12 billion, an increase of 3.8%. There were 348 FDI projects with investments of over US$10 million, up 13.4% from the previous year.

In 2006, the major countries and regions that invested in Shanghai are shown as follows .

Top 7 Countries and Regions Invested in Shanghai(2006)

Number Country/Region FDI (billion USD)
  Total 112.3
1 Hong Kong 31
2 Virgin Islands 23.7
3 EU 17.6
4 Grand Cayman 13
5 Japan 11.6
6 U.S.A. 7.8
7 ASEAN 7.6

In 2006, Shanghai ranked No.1 in the utilization of FDI big four municipalities. The comparison of the utilization of foreign investment is below:

Shanghai has the greatest number of multinational companies out of cities on the Chinese mainland. By the end of March 2006, there were 133 corporate headquarters established in Shanghai by multinationals. Among them, there are 41 of the world's Fortune 500 enterprises including GE, GM, Exxon Mobil, Intel, Bayer and BASF to name a few. Shanghai multinationals largely focus on the chemical, electronic, light industry, automotive, mechanical, real estate, and infrastructure sectors. There are 20 multinationals in the chemicals sector alone, accounting for 15% of the total amount. Additionally, by the end of March 2006, there were 177 R&D centers established by international firms in Shanghai, among which there were 62 U.S. companies, 30 EU companies, 32 Japanese companies and 53 companies from other countries and regions mainly focusing on R&D in the electronics, bio-pharmaceutical, automotive and light industry sectors of the marketplace.

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