After much consideration…

“As reported by a Chinese top level official channel to Jesa (the news is not public yet), Shanghai Government will reduce the total surface dedicated to industrial production by 400 km2. This will have a great impact on many enterprises, which will be forced to relocate outside the whole Shanghai municipality territory. Also, industrial parks around the municipality will suffer from this guideline. In the near future, Suzhou zone could likely experience the same decision since a few signal in this regard are already clear.

Companies that will be soon forced to relocate are the ones that:
– Do not comply with the municipality’s environmental production standards;
– Are not profitable after years of activity;
– Are characterized as small-sized businesses.

The decision was taken in order to redevelop and modernize the territory surrounding Shanghai into a sustainable one. Industries working in “smart technologies” as well as the ones supporting the service sectors will be incentivized to establish in the transformed area.

Jesa warns regarding the probability of this guideline to happen since years. Nowadays, the trend in China is to upgrade the coast industrial areas into service oriented hubs. At the same time, heavy production industries are starting to move to the West and inner regions.

In light of these facts, Jesa strongly suggests to refocus the business strategy on time. If a company’s “China Project” has not yet started, it is fundamental to evaluate different solutions in terms of localization. Also, if a company already works in China, it is advisable to consider relocating the branch to provinces nearby Shanghai or even to further areas in the West.”