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Shanghai: a global hub of entrepreneurship

Shanghai a greater global hub of entrepreneurship.jpg

China has been a hub of entrepreneurship for many years now. From the Zhongguancun technology hub in Beijing with Baidu and Sina, to Alibaba in Hangzhou, to Tencent and Huawei in Shenzhen, innovation and entrepreneurship is a large part of China’s ongoing economic growth and reform.



Now China is ready to take its next steps as a greater global hub of entrepreneurship by opening up Shanghai, which is set to be the first testing ground for new entrepreneurial residence and immigration policies, according to new regulations unveiled last week by China’s Ministry of Public Security. Starting with the removal of external and internal labor market restrictions to encourage entrepreneurship in the technology and service industries in Shanghai, China’s government is opening its economy further, and attracting foreign talent to start businesses.



The Shanghai municipal government’s originally reported announcement included measures for building facilities for startups, a technology research university, science laboratories, and other measures to attract worldwide talent. The policies then escalated quickly in a State Council meeting, calling for a loosening of residency and educational degree requirements as barriers to entry in China’s entrepreneurship market.



According to a Ministry of Public Security official, “advancing the construction of Shanghai as a technology and innovation center is a major initiative of China’s forging of new heights in the technology sector that have global impact, referring to comprehensively deepening reform, advancing development strategies, and enhancing the significance of the country’s core competitive ability.”



The policies are intended to encourage business startups, hire the best talent available, increase China’s competitiveness, and relieve pressures in the employment market. The measures originally announced by the Shanghai government included:



a reduction from 7 years to between 2-5 years to wait for a “hukou” residency in Shanghai.



a reduction in green card application wait times to less than 90 days for foreigners.



an policy that will let university researchers start companies while studying and let students work part-time in startups.



The initiative will be expanded countrywide eventually. This may suggest even more lenient policies in smaller inland cities in the future. According to People’s Daily, “The aforementioned policies will gradually expand to establish conditions for implementation on a countrywide scope in different regions after they have gone through a period of practice [in Shanghai].” For example, the State Council is encouraging labor flows to the countryside in a policy announcement on June 10th that encourages migrants and students to return to their villages.



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