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Shanghai, a municipality of over 24 million people, serves as a global hub for commerce and finance. The city received its first formal trade mission of U.S. companies in 1905, welcomed the establishment of the American Chamber of Commerce Shanghai in 1915, and has been the beneficiary of significant foreign direct investment since the 1920s. While ultra-competitive, Shanghai is a welcoming environment for international business, with consumers and industrial customers well-versed in the value proposition of foreign goods and services. It is worthwhile to note that in the American Chamber of Commerce’s 2015 annual survey of its U.S. members, competition from domestic companies was again listed as a top challenge that U.S. companies face in eastern China.

Shanghai is a sprawling city comprised of 15 districts and an additional county. For most business travelers, Shanghai can be divided into three main areas: Pudong, Nanjing Road, and the western suburbs. Pudong is a rapidly developing business, financial and residential district that lies across the Huangpu River from the main city. Pudong is home to many of Shanghai’s most famous buildings, including: the Jin Mao Tower, Oriental Pearl TV Tower, the Shanghai World Financial Center, China’s newly constructed tallest-building the Shanghai Tower, the Pudong International Airport, the Shanghai Free Trade Zone (FTZ or SFTZ), and several business parks. Shanghai’s second airport, Hongqiao, is located in the western suburbs and operates the majority of the domestic flights as well as selected international flights. The Hongqiao Railway Station is next to the airport.

Shanghai’s total GDP in 2014 was RMB 2.36 trillion (US$383.55 billion), while the city’s per capita GDP stood at RMB 97,555 (US$15,880). Foreign trade in Shanghai was valued at RMB 2.87 trillion (US$466 billion), with exports valued at RMB 1.29 trillion (US $210 billion) and imports valued at RMB 1.58 trillion (US $256 billion).

Key Industries

The division of Shanghai’s 2014 GDP between the goods and services was approximately 37 and 62 percent, respectively. The city’s largest service industries include financial, real estate, and retail. The major goods industries in the city include electronic information, automobiles, petrochemicals, steel, equipment manufacturing, and biopharmaceuticals. Although the goods industries contribute less than services to the city’s overall GDP, they do contribute to China’s industrial mix, acting as host to the world’s busiest and voluminous container port in the world.

Many industries in Shanghai rely on imports from the U.S. Shanghai is a national distribution center for imported consumption commodities, with nearly 30 percent of China’s imported consumption commodities being imported through the city in 2014. In terms of export commodities, Shanghai primarily exports electronics and biomedicines. Below, we explore import demands from Shanghai’s automobile and aviation industries, as well as the strong supply of electronics and biopharmaceuticals from Shanghai.

Export & Import  Data of Shanghai (2014)


Export Value (USD)

Import Value (USD)


54 billion

5.6 billion


481 million

1.3 billion


2.3 billion

620 million


911 million

1.7 billion

Data source: Shanghai Custom Bureau


Despite experiencing a slowdown in sales, China remains the largest automobile market in the world. The 23 million automobiles sold in China during 2014 compares favorably to the 16.5 million sold in the U.S. during the same year. Shanghai is importing nearly twice the value of exports in the automobile sector. This gap highlights the opportunities that exist in the market for foreign sellers. Many experts expect the market to continue to grow, although not at the same breakneck speed as in recent years.

Beginning in 2015, authorities in Shanghai implemented a parallel-import pilot to allow a select number of auto dealers in the Shanghai Free Trade Zone to import vehicles at rates of 15 to 20 percent lower than others. Although purchasing automobiles at free trade zones has become maligned by some locals due to poor post-sales services, authorities are aware of the issues and currently seeking solutions.

The industry that underpins automobiles, automotive parts, is highly fragmented in China and oftentimes consists of small companies producing just one part, or a component of a part. These companies mostly produce simple parts, with the more advanced parts being imported. This has created an opportunity for U.S. companies to manufacture advanced car parts for sale in China through the Shanghai market.


The aviation market in China is the second fastest-growing in the world, second only to India. Industry experts forecast a 7.9 percent annual growth rate for the industry in China. Although growth for the industry has primarily focused on the domestic market, experts now expect the demand for international services to take a more prominent role as the industry diversifies.

Recently, Chinese state-owned aerospace manufacturer Commercial Aircraft Corporation of China, Ltd (Comac) unveiled the C919 passenger jet that is expected to compete with Boeing and Airbus. Major U.S. suppliers have already begun capitalizing on these developments by selling engines, auxiliary power units, flight simulator tests, and fire and heat protective systems to Comac.


Although the electronics industry in Shanghai is primarily export-oriented, Shanghai and the country as a whole still imports important components for many of its electronics products. For example, China imports at least 80 percent of the semiconductors it uses in electronics manufacturing. Many of these semiconductors are imported from the U.S. Manufacturers in China are continuously seeking partners that are willing to engage in trade and technology transfers.

U.S. companies may want to look beyond traditional information communications technology industries and evaluate burgeoning subsectors such as smart governance, intelligent transportation, and smart cites. In April 2015, in accordance with an agreement between Presidents Obama and Xi, the U.S. Secretary of Commerce and Deputy Secretary of Energy co-led a Smart Cities-Smart Growth trade mission to Beijing, Shanghai, and Guangzhou that should prove to be just the tipping point for expanding opportunities for U.S. companies in these fast growing sub-sectors.


Imports for this industry in Shanghai have remained low as a result of intellectual property right laws in China. However, some industry experts express hope that intellectual property rights compliance will soon improve in the country, allowing U.S. companies to fill a market gap for high-quality products in China.

The Shanghai FTZ

At the beginning of 2015, the Shanghai Free Trade Zone consisted of four zones across 46.61 square miles in the Pudong area of Shanghai. These four zones included Waigaoqiao Free Trade Zone, Waigaoqiao Free Trade Logistics Park, Yangshan Free Trade Port Area and Pudong Airport Comprehensive Free Trade Zone.

In April 2015, the entire zone was expanded to include the Lujiazui Financial and Trade Zone, Shanghai Jinqiao Economic and Technological Development Zone (former Jinqiao Export Processing Zone), and Zhangjiang Hi-Tech Park. The Shanghai FTZ now stretches across 74.7 miles. In particular, the inclusion of the Lujiazui financial district was designed to open up the service industries and spur financial liberalization.

The Shanghai FTZ offers exemptions on import tariffs as long as goods remain within the zone. This also extends to air shipments through Pudong Airport, where goods are unimpeded by customs procedures or import duties. The Shanghai FTZ was designed to offer greater efficiencies for foreign enterprises while easing the time to market and lowering the cost to enter the market. Issues with implementation have thus far prevented the FTZ from reaching its founding promises, but efforts are still on-going and the zone has garnered national level attention. China has a vested interest in the success of the Shanghai FTZ, and foreign companies continue to find good business opportunities.

Contact Information

U.S. Commercial Service - Shanghai

Shanghai Center, Suite 631, 1376 Nanjing West Road

Shanghai 200040, China

Tel: (86-21) 6279-7630

Fax: (86-21) 6279-7639

Email: office.shanghai@trade.gov

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