Shanghai free trade zone vows 2-hour approvals for ‘high-growth’ projects to woo foreign capital as China’s inward investments slump

Shanghai FTZ to focus on new-energy vehicles, semiconductors, artificial intelligence, biotech and general aviation in pursuit of high economic growth

Authorities to approve foreign-invested projects within two hours at the Lingang FTZ while allowing it to launch the construction of its plant if all conditions are met

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Aerial view of the newly built Shanghai Science and Technology Museum in Lingang area, Shanghai, China. China expanded its Shanghai free trade zone (FTZ) in its latest major strategic move for further opening-up. Photo: Imaginechina

Published: 4:30pm, 21 Aug 2023Updated: 4:41pm, 21 Aug 2023

Shanghai, the mainland’s commercial and financial hub, has pledged to cut red tape and to accelerate infrastructure construction in a bid to lure new foreign-invested projects as it did with Tesla’s Gigafactory in the Lingang free-trade zone (FTZ).

The municipal government said it would complete the business-registration process for a foreign-invested project within two hours at the Lingang FTZ while allowing it to launch the construction of its plant. Historically, such approvals had taken two days.

“We aim to make the high speed of building the Tesla factory a new normal,” Ruan Qing, the deputy director of the Shanghai Development and Reform Commission, told a media briefing on Monday. “The Lingang FTZ will stick to the highest international standards in promoting commercial activities and in creating a business-friendly environment.”

The underlying message to foreign businesses was that they could copy the success of Tesla’s Gigafactory 3 at the Lingang FTZ, a coastal area linked to the Yangshan Deep-water Port by the 32km Donghai Bridge, for speedy approvals.

Aerial photo shows new area of Shanghai FTZ. Photo: Imaginechina

The factory, Tesla’s first manufacturing unit outside the US, took a year to build, between 2018 and 2019, with aid from the Shanghai government in the form of infrastructure support and credit extension.

Four Chinese state-controlled banks granted Tesla loans worth 11.25 billion yuan (US$1.54 billion) at concessionary rates in December 2019 to fund the construction of the Gigafactory 3.