Because of this, the European business lobby is urging local authorities to adopt a unified “One Shanghai” policy. For example, the city concentrates its best economic incentives in remote, outlying districts like Lingang.
Massive multinational corporations have the capital to set up shop on the outskirts to harvest these benefits. On the other hand, small and medium-sized enterprises (SMEs) are largely left behind. As a result, relocating is often logistically and financially unfeasible for these smaller European businesses in Shanghai.
Mounting Frustrations
Moreover, the climate is getting visibly tougher for foreign operations. Out of the 200+ European companies surveyed within the city, the results are concerning:
- First of all, 68% stated that Shanghai has become a more difficult place to do business over the past year. This is the highest rate of dissatisfaction among all regional chapters.
- Secondly, Over 50% reported missing out on business opportunities due to ongoing market access barriers.
- Finally, 37% admitted they have no plans to reinvest the profits they make in China back into the city.
The Threat to Shanghai’s Global Ambitions
In addition, beyond the disparity in local incentives, the Chamber highlighted persistent roadblocks involving cross-border capital flows.
In conclusion, the core warning is clear: if foreign businesses cannot easily and reliably move money in and out of the country, it will severely undermine Shanghai’s long-term ambition to cement itself as a premier international financial center.
Reference: Ma, S. (2026, June 4). Shanghai urged to unify incentives as EU firms in China flag mounting business hurdles. South China Morning Post. https://www.scmp.com/economy/china-economy/article/3355923/shanghai-urged-unify-incentives-eu-firms-china-flag-mounting-business-hurdles