Special article for Shanghai Free Trade Zone （FTZ）
Topics: Inside Shanghai FTZ
Original title：Yu Yong: In the “closest place to the world”, appreciate China’s new development pattern
Source: China News Service, Shanghai, 20 September
Written by: Li Shuzhi, Yu Mei
Pass through the iconic “Seagull Gate” and enter the China (Shanghai) Pilot Free Trade Zone (hereinafter referred to as the Shanghai Free Trade Zone) Free Trade Zone. The “closest port to the world” is reflecting a new pattern towards China’s development.
China’s first free trade zone was founded in Shanghai Waigaoqiao, through which enterprises from 123 countries and regions around the world imported their products and services into the Chinese market. 10 years ago, a national experiment to explore new ways, reform and expand began on this land.
The 10 years since the establishment of the FTZ have been 10 years of innovation and transformation in Waigaoqiao. An “old developer” in Pudong, Yu Yong, Shanghai Waigaoqiao Free Trade Zone Group Co Ltd, has witnessed the rise of Waigaoqiao as a bonded zone and experienced first-hand the rapid growth of the free trade zone. When talking about the free trade zone over the past 10 years, “innovation and transformation” are the key words Yu Yong uses.
Innovation is testing the system and exploring new ways for China’s development, and the results produced by this innovative “test field” have brought opportunities for transformation and upgrade for enterprises in the region.
During as early as the 1990s, a window and bridgehead for foreign investment to enter China, Waigaoqiao Free Trade Zone attracted many industries engaged in trade and export processing. At that time, Flex, which was mainly engaged in the machining business, was one of them.
Three years ago, relying on the policy innovation of the free trade zone and the development dividends of the Pudong construction leading the zone, Flextronics and Xerox used the free trade zone’s “medical device registrant.”（MAH）. The company developed production cooperation for the “ultra-high-definition endoscope camera system” of medical devices and achieved mass production delivery.
“It is this cooperation that allows us to find the opportunity to transform the intelligent manufacturing of medical devices,” Lai Dongwen, vice president of Chinese government affairs of Flextronics Group, said in an exclusive interview with a reporter from China News Agency.
Just last year, Flextronics’ corporate name in Waigaoqiao was changed from “Flextronics (Shanghai) Metal Parts Co Ltd” to “Flextronics Intelligent Equipment Manufacturing (Shanghai) Co, Ltd” In Lai Dongwen’s view, this is not simply just a name change for the company, but “behind it is the ‘triple transformation’ of Flextronics’ business in China– improving quality and efficiency and moving towards high-quality development.” According to Flextronics, intelligent manufacturing of medical devices has become “half of Flextronics’ business in Shanghai”. The company is currently preparing a blood glucose meter equipped with new technology for mass production.
The MAH system was first implemented in the bonded area of the Shanghai Free Trade Zone, providing a demonstrative model for multinational medical device enterprises to opt for localized production. More and more leading medical device companies are planning for localized production trials and mass production in the bonded area of the Shanghai Free Trade Zone. “Our upgrades will drive suppliers to improve quality and efficiency, thereby promoting the entire industrial chain towards high-quality development.” Lai Dongwen said.
In Yu Yong’s view, under the “blessing” of the free trade zone, the innovation and transformation of Waigaoqiao carries a “sense of haste”.
At a time when China is building a new development pattern in an all-around way, “if we only stick to the results, rather than transformation and upgrading based on trade, we will fade out from history.” Yu Yong said that the Shanghai Waigaoqiao Free Trade Zone, born and prosperous because of trade, no longer relies only on traditional industries such as trade logistics, but accelerates the construction of a new development pattern of trade.
Take the biomedical industry, one of the three leading industries in Shanghai, as an example. Waigaoqiao started from the import and export trade of biomedical and medical device products and accelerated the expansion of the industrial chain of biomedical R&D, testing and production based on the dual advantages of trade agglomeration and bonded functions, attracting more emerging enterprises to land.
Kingscon, a service provider in the field of life sciences, is one of them. The company mainly carries out two major types of business: in vitro cell models and recombinant viral vectors, and 80% of its customers are from overseas. Tan Hao, head of the laboratory of Shanghai Kingscon Biotechnology Co., Ltd., said in an exclusive interview, “The import and export approval process for special items such as cells and human blood is long, and policies are often uncertain. If the product is not delivered on time, it will delay the customer’s new drug development progress and we will lose the order.”
“The experience of special item approval in bonded areas and the practice of innovative supervision are critical to our business. “To seize the window period of rapid development of the global cell therapy industry, Kingscon expanded its R&D institutions to the bonded area of the Shanghai Free Trade Zone. In just one year, Kingscon’s sales grew by more than 70 per cent.
Official data shows that in 2022, the operating income of the biomedical industry in the bonded area of the Shanghai Free Trade Zone will account for nearly 1/3 of the city. Among the world’s top ten medical device companies, 9 companies, including Medtronic, Abbott, Johnson & Johnson, Siemens, Bede, Roche Diagnostics, GE Healthcare, Stryker, and Boston Scientific, have invested and operated in bonded areas.
Building a new development pattern is inseparable from the improvement of the energy level of enterprises in the region. Yu Yong said that with the advancement of various institutional innovations in the free trade zone, the bonded zone with the Waigaoqiao Free Trade Zone as the core is continuously improving its global resource allocation capabilities.
The Shanghai Free Trade Zone Global Operator Program (GOP), which was pioneered in the bonded zone, is a vivid practice of building a global resource allocation highland. This move aims to cultivate internal motivation for the development of the headquarters economy through professional cultivation and services, break through the resistance and enhance the development potential. According to Yu Yong, 125 domestic and foreign enterprises have joined GOP, covering various fields such as biomedicine, optical instruments, marine engineering, and energy investment.
As one of GOP’s first “members”, Boston Scientific’s business in China will also expand from trade-oriented to the whole industry chain. “We hope to develop Shanghai headquarters into a strategic hub that integrates investment, R&D, production, trade and service, and gives full play to the leading role of Shanghai headquarters economy.” Improve Boston Scientific’s value chain in China. Wu Xiulan, vice president of Boston Scientific China, said in an exclusive interview with China News Agency.
With the blessing of GOP, the bonded area has formed a multi-level headquarters economic system covering regional headquarters of multinational companies, headquarters of large enterprises, operation headquarters and so on. The relationship between enterprises and regions has also developed from mutual benefit and win-win cooperation to mutual integration and common growth. “We will encourage our partners to seek more common value while achieving their development and making good use of China’s resources.” Yu Yong said. (Enditem)
