Why Do Foreign Companies "Favor" Shanghai? They Mention Artificial Intelligence, Supply Chains, Markets……

On the morning of March 18, the 42nd batch of certificates for multinational companies’ regional headquarters and R&D centers was awarded in Shanghai. Shanghai newly recognized 30 multinational companies’ regional headquarters and 15 foreign-funded R&D centers.

Reporters from The Paper interviewed some representatives of the awarded foreign-invested enterprises on-site and learned that localized R&D and global supply chains in Shanghai have become deep-rooted reasons why foreign companies remain optimistic about China in the long term.

The Shanghai Municipal Commerce Commission revealed that most of the organizations receiving certificates are from key development industries in Shanghai, such as biomedicine, integrated circuits, high-end equipment, automobiles, and fashion consumer goods. Leading companies are numerous, with 8 Fortune Global 500 companies establishing regional headquarters or R&D centers; they have high levels of capability, including 4 Asia-Pacific headquarters, 4 Greater China headquarters, 3 business division headquarters, and 1 global R&D center.

By 2025, Shanghai will have established over 6,300 new foreign-invested enterprises, a year-on-year increase of 6.8%. Actual foreign investment used will exceed $16 billion, with 60 new multinational company regional headquarters and 45 foreign-funded R&D centers recognized. As of February 2026, Shanghai has cumulatively recognized 1,084 multinational company regional headquarters and 647 foreign-funded R&D centers. Shanghai continues to be one of the top destinations for foreign investment.

Exploring Transshipment from Shanghai

Deng Yuyi, President of North China at HanHong Logistics (China) Co., Ltd., introduced that HanHong is a German family business with a 150-year history. It entered China in 2000, with its headquarters in Hongkou, Shanghai, and 15 branches nationwide. Deng Yuyi said that the automotive industry accounts for 35% to 40% of the company’s business, mainly auto parts.

Recently, tensions in the Middle East have significantly impacted logistics. “The Red Sea route is blocked, and we are researching new routes,” Deng Yuyi said. The company is exploring a transshipment model from Shanghai—such as shipping goods from Korea to Shanghai by sea in just two or three days, then transporting by rail to Europe, or using sea-air combined transport to Australia, to avoid conflict zones.

“Previously, sea-air transshipment through the Middle East took over twenty days; now, from Shanghai, it takes about 30 to 35 days. Although slower, it’s much faster than the 50 days of direct sea shipping,” she said. This route adjustment provides customers with more options.

Looking ahead, Deng Yuyi said the logistics industry should focus on investing in artificial intelligence, “to ensure data for customers is very accurate, and AI can help a lot.” These are among the reasons they are optimistic about China and choose Shanghai.

Rapid Development of Intelligent Technologies

“We are awarded as a foreign-funded R&D center,” Yang Feng, General Manager of Hyundai Forward Automotive Technology Development (Shanghai) Co., Ltd., told The Paper. This is Hyundai’s only intelligent R&D center outside Korea.

Yang Feng said that China’s intelligent technology development is very fast. The headquarters established this R&D center in Shanghai in 2021. “Our vision is not just to serve Chinese companies but also to develop results with Chinese partners and supply to global markets.”

In recent years, China’s supply chain for intelligent technology has developed rapidly, with a huge market that accumulates large amounts of user demand data. “Leveraging this market and industry chain, we cooperate with excellent Chinese suppliers to develop suitable models for Chinese users, and also apply these experiences and supply chains to global platforms,” Yang Feng revealed.

What gives Yang Feng more confidence is the rapid expansion of the Shanghai team. “We rented a building in Hengji Xuhui Tiandi, and recently signed an agreement for an additional building. Now, there are about 300 people, and by 2027, the team may double in size,” he said. In May this year, the Shanghai User Experience Center in Jing’an Temple will also open, dedicated to communicating with young Chinese users.

Focusing on Local Roots and Pushing Innovation Globally

“We were established in 2008 and officially started operations in 2010,” said Wang Ye, General Manager of Shanghai Electric KSB Nuclear Pump & Valve Co., Ltd. The company is 55% owned by Shanghai Electric and 45% by KSB Group of Germany, focusing on the design, manufacturing, verification, and after-sales service of key equipment for civil nuclear power. This time, the company was awarded as a multinational R&D center.

Its core product is the reactor coolant pump—essentially the “heart” of a large nuclear power plant. “Next, we will further invest in R&D and testing,” Wang Ye said. The company’s factory in Lingang has a full-flow test rig, with an investment of 400 to 700 million yuan, making it one of the few in the world.

After more than ten years of development, the company has achieved localization and is now in the autonomous stage. “We focus on the domestic market, serve the national energy strategy, and also bring high-quality products and innovative results to the international market,” he revealed. They have previously supplied equipment to the UK nuclear power sector and recently received new UK nuclear projects. “This is a model of true Chinese R&D, design, and manufacturing, nurtured in the Shanghai joint venture environment, and now successfully pushed into the international market.”