Multinational firms swear by Shanghai on support plan for foreign R&D centers

A new plan to support the development of foreign research and development centers in Shanghai has led executives and experts to say the city continues to be an attractive destination for foreign companies.

They took cognizance of the city's continued efforts to attract investment and brighten its business environment. More multinational corporations will set up their R&D facilities in the city — and this will serve as a growth impetus for the city's high-quality development, they said.

The Shanghai municipal government introduced the new plan as part of the city's efforts to implement the central government's plans to introduce more foreign investment and promote innovation in China.

The plan, which took effect on March 15, seeks to encourage the establishment of more foreign R&D centers and upgrade the innovation capacity of existing ones. The local government will further optimize the clearance procedures for R&D materials, support legitimate cross-border flow of R&D data, step up financial support, better protect intellectual property rights, provide supportive talent policies and introduce more favorable fiscal and tax policies for foreign R&D centers.

Foreign R&D centers are encouraged to set up public nonprofits for fundamental scientific research funds in Shanghai. While biosafety risk assessments are still needed, the time limit for quarantine approval will be shortened for imported genetically modified animals and plants and biological materials introduced by foreign R&D centers for national or municipal research projects, with entry and follow-up supervision procedures optimized.

Meanwhile, an important data catalog in China (Shanghai) Pilot Free Trade Zone will be formulated. Export of data outside the catalog does not need security assessment, standard contracts for personal information export, or personal information protection certification.

Work permits or residence permits granted to high-end foreign talent working at foreign R&D centers will be valid for as long as five years, according to the new plan.

According to Luo Dajin, director of the Science and Technology Commission of Shanghai, foreign R&D centers are of much importance as Shanghai strives to become an international innovation hub.

MNCs are more than welcome to step up investment and set up open innovation platforms in Shanghai. They are also encouraged to work more closely with companies throughout the value chain, universities and other local institutes to conduct fundamental research and explore more application scenarios, he said.

Sun Lixing, a researcher at the Institute of World Economy of the Shanghai Academy of Social Sciences, said Shanghai's appeal to foreign investors and MNCs remains unchanged. The city has been optimizing the composition of foreign-invested companies while also improving their overall quality.

A collective signing ceremony on Feb 27 saw 17 foreign companies receiving certification for regional R&D centers from the local government. The certification specifies benchmarks for research content, R&D conditions and investment value over time. Certified companies will be entitled to government incentives and R&D support.

The R&D center of Panasonic Information Systems (Shanghai) Co Ltd, one of the 17 newly certified companies, focuses on upgrading the manufacturing execution system, exploring digital transformation methods and the development of artificial intelligence technologies. The latter will account for half of the company's R&D expenses this year, said its general manager Zhao Guodong.

"Thanks to Shanghai's high level of internationalization, foreign companies can seek development here on an equal footing with Chinese domestic companies. Therefore, Panasonic will increase its investment in new energy and elderly care sectors in China," said Zhao.

During his meeting with Shanghai's Party Secretary Chen Jining in late February, Pascal Soriot, CEO of biopharmaceutical MNC AstraZeneca, said the company's Asia-Pacific headquarters and global R&D center are in Shanghai because of the city's importance.

With firm confidence in the development outlook of Shanghai in particular and China in general, AstraZeneca will continue to increase its innovation-focused investment in the country, explore new businesses and deepen cooperation with local innovative drugmakers to help promote the high-quality development of Shanghai's medical industry, he said.