Finance & Economics

Shanghai Yangpu District Seeks to Expand Its Growing Digital Ecosystem

Shanghai’s northeastern Yangpu district, which has already become a kind of hub for many large technology companies, is seeking to gain smaller-scale firms.

Shanghai Yangpu District Seeks to Expand Its Growing Digital Ecosystem

The mentioned district of China’s largest city by population, located in the eastern part of the Asian country and an independent administrative unit of central subordination, is currently making efforts to develop its digital economy system. In this case, more intensive interaction with small technology companies will allow Yangpu to form an ecosystem that will become a solid material and financial platform for the full implementation of the mentioned intention. It is worth noting that the digital economy of the mentioned northeast district of Shanghai is already on a trajectory of rapid growth. If the current efforts of the Yangpu authorities bring a positive result, the specified state of affairs will become more extensive and impressive. It is worth noting that nowadays, this district cooperates closely with such large technology companies as the Meituan food delivery service and the Bilibili virtual video-sharing platform.

In the past, Yangpu was known for its heavy industry. The Northeast district of Shanghai is currently moving towards maximum compliance with the realities of modernity, in which technology companies are extremely important components of the economy and active cooperation with them generates favorable prospects. It is also worth noting that heavy industry still continues to be a profitable sector, but ignoring innovative business areas significantly weakens the development potential.

Yangpu strives to achieve the so-called cluster effect. The corresponding statement was made by representatives of local authorities at a media briefing that took place on Friday, June 14. Currently, Yangpu is fully mobilizing capital, talent, and technologies to stimulate innovation and strengthen its economic system. The district aims to form 12 industrial chains that are related to digital technologies. A corresponding statement was also made at the specified media briefing. In this case, it means chains of companies that are involved in the technology sector, including providers of solutions for making payment transactions in the virtual space and firms specializing in delivery services. The Yangpu authorities note that it is not enough to simply gain a giant company to develop a business to stimulate the digital economy.

In the context of its announced efforts, the district plans to focus on artificial intelligence and Internet technologies. In the mentioned spheres of activity, Yangpu intends to develop a world-class business. It is also worth noting that Shanghai, as a territorial, economic, and administrative unit, is also aimed at transforming itself into a hub of technological innovation.

Moreover, Yangpu is ready to cooperate with companies belonging to the traditional manufacturing sector. This component element of the district’s approach to the development of the digital economy is based on the fact that the business of the specified firms can be moved to a virtual functional space to increase the level of efficiency of production activities and improve marketing.

In the past, Yangpu had the status of a so-called rust belt. Industries such as shipbuilding, power generation, and the textile sector were concentrated in this district. Currently, it is dominated by technology companies, including, among others, e-commerce platforms and firms specializing in software development. Nowadays, Yangpu is the home of about 7,000 technology brands. The revenues of these companies account for more than half of the total sales of all businesses located in the district. Also, the mentioned firms generate taxes equal to 1/3 of the fiscal income of the district.

Yangpu now has a population of 1.2 million people. The district has a coastline of 15.5 kilometers on the west bank of the Huangpu River.

Last year, the district authorities announced their focus on both Chinese and international technology companies. Also, at that time, there was an interest in interacting with talented individuals to form an innovation belt.

Last May, Yangpu announced its intention to invest up to 15 million yuan ($2.1 million) to gain promising technology companies on the coastline. Local authorities also rely on educational resources, including the national universities of Fudan and Tongji.

The Shanghai Technology Exchange, China’s first continuously operating intellectual property rights and technology trading platform, is also based in Yangpu. It is one of three national-level Chinese bourses providing technology trading services. Currently, the Chinese Technology Exchange, based in Beijing, and the Shenzhen Stock Exchange also operate in the Asian country. These platforms provide mainland companies with the opportunity to buy technology-related intellectual property rights and laboratory research from owners such as universities. The total amount of relevant deals concluded since the beginning of the current year amounted to 7.1 billion yuan.

Last year, the Yangpu economy showed growth of 5.6%. It is worth noting that the increase in Shanghai’s gross domestic product (GDP) over the same period was 5%.

Yangpu is also showing interest in raising foreign direct investment. In the context of the implementation of the relevant intention, efforts are being made such as reducing bureaucratic procedures and providing financial support. Shanghai is also interested in the materialization of the specified initiative. The city authorities promised to provide foreign investors with financing and support for land use. These intentions are consistent with the desire of the commercial and financial capital of mainland China to achieve economic growth of 5% again in the current year. Shanghai’s mayor Gong Zheng said during a press conference in January that the increase in foreign direct investment, which reached a record high in 2023, will effectively buttress the efforts of the municipal government to recover the economy in 2024. Last year, Shanghai managed to raise the mentioned investments worth $24 billion. This figure exceeds the record result of $23.96 billion fixed in 2022.

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Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.