Shanghai's attractive foreign investment policies have inspired hundreds of overseas companies to set up regional headquarters in the city.

Reductions in tariffs, quicker administration approvals, and of course, China's huge market. In 2019, all of these continued to attract an increasing number of foreign firms to set up headquarters and research centers in Shanghai. In November alone, 35 foreign companies received certificates from the city government for choosing to locate there. Manufacturing companies have been one of the most popular.

Davy Zhang, vice-president of Webasto Roof Systems China, said: "We think that the Chinese market is on the rise. One-third of our business is in China, so we will make further investments here. We will be making more innovative auto sunroofs, as well as expanding into new-energy products."

While the manufacturing sector has long been a target for foreign players in Shanghai, a good number of consumption firms are also joining in.

Nakao Kiyoshi, general manager of Meiji China Investment, also pointed out: "Currently, our market share in China is relatively low. So we want to invest more and set up more factories in China for products like milk, yogurt, chocolate and ice-cream. We hope that by having a regional headquarters here, our future market share in China will reach 10 percent."

So far, more than 700 foreign companies have set up their regional headquarters in Shanghai. More than 400 firms set up research centers in the city. The warm welcome of Shanghai's policies has been the major reason behind foreign companies' enthusiasm.

Shanghai was the first city on the Chinese mainland to introduce a specific policy of attracting regional headquarters of multinational companies. That was in 2002, and since then, Shanghai's headquarters economy has progressed significantly. At the beginning of the year, the 2.0 version of the city's business environment reforms set out 88 new policies to cut the time required for administrative approvals in half.

Lawyer Carl Li, who has been helping foreign firms invest in China, said Shanghai's continuing efforts are expected to strengthen its role as a major Asian finance center. Shanghai now ranks third in the number of regional headquarters in the Asia-Pacific, after Singapore and China's Hong Kong Special Administrative Region.

Li, senior partner at Shanghai Allbright Law Offices, noted "the most different issue is that Shanghai is still developing and improving very fast. Because the Chinese economy is very big, so that's the better place for foreign companies to set up their headquarters in Asia, not only in other cities in Asia."

More than 5,600 foreign capital-backed projects set up in Shanghai between January and October, a year-on-year growth of 34 percent. They brought in some $42 billion, 15 percent more than what was invested by foreign firms in the city during the same period in 2018.