China's Shanghai Mayor Gong Zheng Promises Increased Support for QFLP Investments

Shanghai's Commitment to Foreign Investment

Shanghai, mainland China’s commercial and financial hub, is intensifying its support for foreign investment following recent economic challenges. Mayor Gong Zheng advocates for an expanded Qualified Foreign Limited Partner (QFLP) quota, signaling a desire to attract private equity and venture capital into local technology start-ups.

Encouraging International Participation

During a recent advisory meeting, Gong Zheng noted, “International asset managers will be encouraged to invest more in Shanghai’s technology firms…” This strategy aims to bolster synergy among capital, data, technology, and talent.

Investment Trends in Shanghai

Despite a downturn in foreign investment, with a notable decline in funding for start-ups, Shanghai attracted US$10.2 billion this year through June, albeit a 20 percent drop compared to the previous year. The QFLP program, initially launched to facilitate capital inflows within strict regulations, is pivotal in boosting foreign involvement.

• Funding for unlisted Chinese start-ups peaked at US$132.7 billion in 2021 but dropped significantly in subsequent years.
• Shanghai’s economy grew 4.8 percent last quarter, below the national average, showing the necessity of increased foreign involvement.
• Notable investors like Blackstone, IDG Capital, and Brookfield are already part of the QFLP scheme, enhancing foreign interest in China.

Future Outlook for Shanghai

Wang Feng, chairman of Ye Lang Capital, emphasizes the need to restore confidence in investments. His insights underline Shanghai’s focus on technology as a growth driver amidst challenging economic conditions.