Shanghai has pledged to give financial and policy support to its northeastern Yangpu district as part of the city’s efforts to bolster technological innovation as a way of combating an economic slowdown. Yangpu district announced that qualified foreign professionals working for technology firms based in its 2.3 million square metre innovation zone would be granted permanent residency, while it would set up its own loss-proof mechanism to encourage investments in start-ups. “It is a renewed effort by Shanghai to attract technology companies,” said Ray Lu, a director with Hotung Ventures. “The district government is likely to earmark a massive amount of funds to subsidise businesses engaging in tech transfers.” Yangpu is the only region of Shanghai designated by the central government as a pilot zone for technology development. It is a renewed effort by Shanghai to attract technology companies Ray Lu, director, Hotung Ventures The district’s governor Xie Jiangang told a press conference last week that it would make proper fiscal arrangements to reinforce the growth of technology start-ups based in the district. “Tech transfer remains the biggest stumbling block to a flourishing growth of technology companies,” he said. “We will try to make a breakthrough in the key areas to facilitate the process.” Shanghai has been striving to create its own information technology giants for the past decade. The fact none of the three mainland internet giants – Baidu, Alibaba and Tencent – are headquartered in the country’s commercial capital is a source of embarrassment to the city’s leaders. Shanghai, once the economic locomotive of China, has been among the slowest growing provincial-level regions in terms of economic expansion since 2008. The municipal government published a loss-proof measure last year to spur investment by angel investors and venture capital funds. Under its terms, a fund or investor could recover up to 3 million yuan (HK$3.55 million) of losses from investments in Shanghai-based start-ups. In Yangpu, investors could receive additional compensation from the district government if they were to incur losses from investment, on top of the money collected from the city-level authorities, Xie said. He didn’t elaborate on the size of the compensation from the district. “It is worth attention,” said Yang Dong, a Shanghai-based angel investor. “But the governments at various levels must ensure that those policies won’t have loopholes for unethical funds to take advantage of so as to make nasty money.” Yangpu is known as the industrial zone for Shanghai’s traditional and heavy industries such as textiles and shipbuilding. It is now one of the most underdeveloped downtown areas in Shanghai. Yangpu officials said they hope to make the most of the education resources around the Wujiaochang area - where several key national universities such as Fudan and Tongji are located - to boost technology development. Beijing has vowed to transform the mainland into a global powerhouse in innovation by 2050.