Why global firms keep choosing Shanghai's development zones

Strong industrial ecosystems, smart manufacturing and talent advantages continue to attract foreign investment

Since the establishment of its first batch of national economic and technological development zones in the 1980s, Shanghai has constructed a total of six national-level economic and technological development zones in areas such as Minhang district, Pudong New Area and Songjiang district.

Over the years, these national-level economic development zones have continuously expanded and upgraded to become important engines driving the high-quality economic development of the entire city. They have made significant contributions to the establishment of an open economy, coordinated regional development and high-quality industrial development.

According to official figures, the combined GDP of the six national-level economic development zones in Shanghai was 460.3 billion yuan ($65.39 billion) in 2023, accounting for approximately 9.75 percent of Shanghai's total GDP during the year.

The Shanghai Minhang Economic and Technological Development Zone, which began construction in 1986, achieved a sales revenue of 1.29 trillion yuan in 2024. Over nearly 40 years, the zone has accomplished many firsts in China, such as releasing the first foreign-language investment guide and establishing the first one-stop business service center.

During the 14th Five-Year Plan period (2021-25), the Minhang development zone has focused significantly on supporting foreign businesses in developing headquarters and research and development centers in the area. Nine new foreign-invested R&D centers for companies such as Ingersoll Rand and two regional headquarters for KSB Group and Huntsman have been established. Additionally, the zone has excelled in promoting innovation, green development, pioneering industry growth and overall environmental enhancement over the past five years.

Established in 1992, the Songjiang Economic and Technological Development Zone has developed an industrial layout that focuses on traditional sectors including electronic information, modern equipment, food and beverages and new materials, along with emerging industries such as integrated circuits, biomedicine, new-generation information technology and new energy.

In recent years, the zone has been dedicated to building a series of industrial parks for various sectors, such as fashion consumption, instruments and meters, and electronic information. Ongoing efforts have also been made to promote integrated and balanced development of urban life and industry.

As of the end of 2025, the zone is home to 32 foreign-invested R&D centers and eight regional headquarters of foreign enterprises.

In 2024, the zone was placed second in terms of comprehensive rankings among national-level economic zones in Shanghai and 16th among national-level economic zones in China.

For foreign investors, national development zones in Shanghai have become valuable platforms that help unlock potential, embrace emerging opportunities, observe the Chinese market, collaborate with industry players and search for talent.

Unlocking potential

Zenner Meters Technology (Shanghai), a Sino-German joint venture, established a presence in the Songjiang economic and development zone in 2000. Over the decades, driven by growth in the global and Chinese markets, Zenner Meters has established a local presence encompassing sales, R&D, operations and production. Shanghai is also home to its regional headquarters.

According to Yang Yanming, CEO of Zenner Meters Technology (Shanghai), the company chose the Songjiang economic and development zone because of its premium location at the hub of the Yangtze River Delta region. The proximity to business partners and clients, along with a wide talent pool, is also among the advantages of the development zone.

So far, Zenner Meters' production site in the Songjiang economic and development zone employs around 650 personnel, almost 15 percent of whom are research engineers. Its annual output value has reached about 90 million yuan with products sold in the United States and the European market.

"The development zone gives us significant advantages in accessing technological resources and offers excellent support for developing a more resilient and agile supply chain," said Yang.

Since 2022, Zenner Meters has been making significant adjustments to its industry layout, with the Songjiang factory focusing on manufacturing high-end products. Meanwhile, the company has made substantial investments in smart factory construction to better meet evolving market demands and aims to become a national demonstration factory for smart manufacturing during the 15th Five-Year Plan period (2026-30), according to Yang.

"I believe every company should focus on upgrading to smart manufacturing, as it is crucial for future survival," said Yang. "Smart manufacturing enhances a company's competitiveness, significantly improves product quality, increases production efficiency and reduces production costs. Therefore, every company should have its own plans for intelligent manufacturing. Our company has adopted this as one of the key policies for future development."

Yang revealed that Zenner Meters plans to invest 20 million yuan annually over the next three to five years to respond to the wave of smart production transformation in China.

Backing intelligence

Standex Electronics Shanghai, a subsidiary of the US Standex International Corporation, was established in the Songjiang economic and development zone in 2007.

According to Zhang Zesheng, financial controller of Standex Electronics Shanghai, the company has experienced continuous growth in both output value and tax revenue over the past years. By leveraging the advantages of its Shanghai production center, Standex Electronics has tapped into new market sectors such as automotive security, as well as test and measurement, solidifying its market position both in China and globally. Additionally, the company has invested over 60 million yuan in smart factory upgrades, significantly enhancing production efficiency.

Zhang said a premium business environment is one major factor that contributes to the success of Standex Electronics Shanghai.

"The zone is home to a large number of high-tech enterprises and research institutions, creating a strong industrial cluster effect that aligns closely with Standex Electronics' businesses in electromagnetic products and sensors. This enables quick integration with upstream and downstream resources in the industry chain, providing unique development opportunities for the company," said Zhang.

"The well-connected transport network, encompassing highways, railways and air travel, facilitates efficient global connectivity. This is crucial for the logistics of raw materials, finished products and talent exchange, allowing our products to reach the Yangtze River Delta and nationwide markets."

Zhang also praised Songjiang and its surroundings for hosting numerous higher education institutions and vocational training schools, which continuously supply a multi-level talent pool ranging from research and management to skilled operations.

Additionally, Zhang said that the region's comprehensive planning, excellent living facilities, and high environmental quality help attract and retain core talent for enterprises.

In the next five years, Standex Electronics Shanghai will continue to expand its operation with a focus on smart manufacturing and localization.

"We are ramping up investment in smart facilities and industrial internet of things to streamline the entire data chain of production, testing and logistics, thereby setting a benchmark for intelligent production scenarios," said Zhang. "Additionally, we will intensify innovation in emerging sectors such as test and measurement, new energy vehicles and energy storage. Enhancing supply chain localization will also be a key initiative to improve our responsiveness to market demands."

Long-term confidence

KSB Pump Shanghai established its presence in the Minhang development zone by forming a joint venture with Shanghai Electric Group in 1994.

Over the past 31 years, the company has achieved outstanding results in localizing innovation and development in China. While introducing German technology, KSB Pump Shanghai has also focused on independent development, consistently launching locally developed products that meet the requirements of the Chinese market. In recent years, the company has localized multiple product series and models.

In 2022 and 2023, it received certificates from the Shanghai government for its foreign-invested R&D and regional headquarters, respectively.

In March 2024, it celebrated the opening of its petrochemical energy-efficiency pump manufacturing base in the Minhang development zone. The newly established smart and green facility, occupying 8,000 square meters and involving a total investment of 110 million yuan, primarily manufactures standard pumps and petrochemical engineering pumps.

In October, KSB Pump Shanghai launched a test bench at its petrochemical energy-efficiency pump manufacturing base, tripling its testing capacity and injecting new vitality into the smart testing field for the entire industry.

"Over the past 31 years, the Minhang development zone has provided KSB with support including factory construction, technological upgrades, expansion project coordination and talent recruitment. This assistance has helped the company gradually evolve from a manufacturing base into a comprehensive entity with capabilities in R&D, manufacturing, services and headquarters functions," said Zhu Jiongyi, managing director of KSB Pump Shanghai.

Zhu added that by the end of 2023, KSB Pump Shanghai had generated enough profit to cover the entire initial investment made in 1994. Thanks to the strong performance in the Chinese market, KSB Group was also included in the SDAX Performance Index.

In the future, KSB Pump Shanghai will focus more on product upgrades and sustainable development, according to Zhu. The company will place greater emphasis on the development of new energy sectors, such as hydrogen energy, and carbon capture and storage.

"We will maintain long-term confidence in the Chinese market and promote a strategy centered on 'in China, for China, and for the world'. We will promote sustainable development in every aspect, including our factories, employees and customers," said Zhu.