Unlocking Shanghai's next wave: Capital, data and talent in flow

Further facilitating smoother flows of capital, data, and talent can help Shanghai seek innovation-driven economic growth and further consolidate its role as an international gateway featuring openness, innovation, and inclusiveness, said officials and executives of multinational companies on Sunday.

They made the comments during the 37th International Business Leaders' Advisory Council for the Mayor of Shanghai, or IBLAC.

Shanghai's Party secretary Chen Jining said in the opening remarks that the city will deepen basic research, which entails higher risks but also brings higher value. Shanghai will also strengthen its strategic planning in frontier and disruptive technologies so that it can give full play to its role as a pioneer in scientific and technological innovation.

He noted that the city will take an integrated approach to advancing education, science and technology, and talent development. Shanghai will promote the deep convergence of scientific and technological innovation with industrial innovation, actively participate in global innovation networks, and accelerate the creation of open and collaborative ecosystems for innovation and industry, driving the growth of new quality productive forces.

Roland Busch, CEO of Siemens AG, said that data from one single company is of little value, for the training of large language models is highly dependent on quality data. Therefore, the company reiterated the importance of setting up a cross-border industrial data sharing mechanism to build stronger LLMs.

Data, a source of innovation, may be stored on cloud platforms worldwide. Therefore, Shanghai can work to ensure "smooth and boundless" data flow, which in turn can enhance MNCs' R&D activities in the city, suggested Miguel Lopez, CEO of German industrial conglomerate thyssenkrupp AG.

Data is also at the core of robust investor protection, which is especially important amid the proliferation of AI, said Shriti Vadera, chair of Prudential Plc. She thus suggested Shanghai pilot shared testing protocols and requirements for explainability, invite global participation in sandboxes, and establish a trusted set of auditable data corridors to preserve privacy.

Dick Richelle, CEO of infrastructure provider Royal Vopak, even envisioned setting up a digital free trade zone in Shanghai, which is likely to further strengthen the city's productivity and growth.

These suggestions are by no means far-fetched, as Shanghai will vigorously advance pioneering reforms at all fronts, said the city's Mayor Gong Zheng in his keynote speech on Sunday. Internationally competitive policies and mechanisms will be introduced in Shanghai at a faster pace, he said.

Chey Tae-won, chairman of SK Group, suggested that Shanghai formulate a set of evaluation mechanisms or supportive measures, such as favorable tax policies or other incentives, to help it grow into a benchmark demonstrating the social value of AI. The city will thus become home to more new ideas, capital, and talent, he said.

Jacob Wallenberg, chair of the board of Investor AB, suggested that Shanghai could create zones with simple licensing and clear incentives to further open up sectors such as green technology, healthcare, and digital services, which in itself could attract expertise and long-term investment to the city.

Continued efforts could be made to further streamline administration. A regular dialogue between regulators and business, as well as annual updates on policy clarity, could help build confidence or trust, he added.

Oliver Baete, CEO of Allianz SE, looks forward to more accessibility provided to foreign financial service providers in the Chinese market so that they can provide integrated solutions. Shanghai should also strengthen its ties with Hong Kong to form a smoother two-way capital flow for the Chinese market, he said.

Foreign financial service providers can assist in transforming the massive short-term savings in China into long-term investment, using them more efficiently by developing asset management products, pension funds, and insurance, said Jean Lemierre, chairman of the board of directors of French banking giant BNP Paribas.

Echoing him is Prudential's Vadera, chairwoman of Prudential, saying that over 60 percent of China's household financial assets are short-term deposits with lower yields. Evidence from the Bank for International Settlements shows that opening up and financial integration, based on long-term investment, tends to make domestic markets more stable and resilient to crisis.

A domestic market opened to international investors is usually more stable and liquid, she said.

A free flow of talents across the globe to further invigorate Shanghai's economic activity has been a consensus among many IBLAC attendants this year.

Mark Greeven, dean of Asia for IMD Business School in Switzerland, said that the mobility of talent is crucial to innovation. Therefore, a special corridor for talents, especially the R&D experts, may help Shanghai retain these talents, he said.

John Elkann, chair of European automaker Stellantis Group, suggested that entry and mobility for international talents could be further streamlined in Shanghai by simplifying visa, work permit, and residency processes through digitalization and dedicated channels for professionals.

Singapore's talent schemes, Tokyo's digital infrastructure, and the Netherlands' inclusive public services may serve as references for Shanghai to improve its "software," such as the talent ecosystem, said Richelle from Royal Vopak.

According to Severin Schwan, chairman of the board of directors for the Swiss pharmaceutical giant Roche Group, developing a new medicine is interdisciplinary. Shanghai has gathered various disciplines, providing knowledge in biology, chemistry, and increasingly, AI, with a large number of scientists and academic institutions.

While MNCs like Roche bring in know-how, they also benefit from the know-how generated in the ecosystem driven by a lot of Chinese domestic companies. It is also one major reason that Roche announced in May to invest 2.04 billion yuan ($290 million) to build a biopharmaceutical production base in Shanghai, said Schwan, who has served as the IBLAC chairman for three years.

"If Shanghai can attract and retain the best people, channel vast savings into productive use, and lead in the practical application of AI, then it will not only secure its role as one of the world's great cities, but also become a place where China's next wave of growth begins," said Chip Kaye, chairman of private equity powerhouse Warburg Pincus.

As an annual event serving as an international think-tank for Shanghai mayors since 1989, this year's IBLAC is joined by six first-time attendants from the industries of semiconductor, finance, sports, and consumer goods, including South Korea's conglomerate SK Group, sports giant Nike, and leading iron ore company Vale from Brazil, among others.

Scheduled on Oct 11, 2026, next year's IBLAC will be themed on boosting the innovation-driven development of Shanghai's service industry. Rob Speyer, CEO of global real estate company Tishman Speyer, will serve as the chairman for next year's event.