Italian firms tap into Lingang's new innovation park, backed by incentives

by Fang Zhuoran

A growing number of Italian companies are establishing operations in Shanghai’s Lingang Special Area, attracted by favorable policies and strategic advantages. The Sino-Italian International Cooperation Innovation Park, initiated during the 2024 China International Import Expo, is now in the final stages of construction after three months of development. The first phase, spanning 100,000 square meters of factory and R&D space, is nearing completion and set to begin operations, with three Italian firms already committed.

The broader industrial expansion zone has 500 acres reserved for high-end manufacturing projects, highlighting Lingang’s ambitions to attract global enterprises.

Italy has become China’s fourth-largest source of direct investment within the EU, with bilateral trade remaining above US$70 billion for four consecutive years, according to Yu Yuantang, director of the European Department of the Ministry of Commerce.

Wu Xiaohua, deputy secretary of Lingang’s Party committee, outlined five key advantages of the new industrial park: global connectivity, complementary industrial strengths, proximity to bonded zones and international shipping routes, competitive financial and trade services, and cross-border data infrastructure. Industries poised for collaboration include smart vehicles, civil aviation, biopharmaceuticals, high-end equipment, and fashion.

“Lingang is home to major automakers like Tesla and SAIC, while Italy excels in auto parts manufacturing,” Wu noted. He also pointed to opportunities for Italian aerospace suppliers as China’s commercial aviation sector expands.

Incentives for Italian firms include ready-to-use factory and office space at low costs, rent reductions for five years, and financial support such as R&D grants, fixed asset investment subsidies of 10–30%, and travel allowances for business exploration. Talent services—such as work permits, visas, housing, and education—are also part of the package.

Lingang is enhancing its infrastructure to support incoming businesses, developing commercial districts, bilingual schools, residential areas, and hotels. Jinqiao Lingang Investment and Development Co. is set to open a 12-year international school in September, with Italian language courses in the curriculum.

To further attract firms, Lingang officials will hold promotional events in Italy this April, aiming to showcase China’s supply chain and cost advantages to Italian SMEs.

One early success story is Pama (Shanghai) Machine Tool Co., which has operated in Lingang since 2011. The company, part of Italy’s Pama Group, has seen its revenue grow tenfold over the past decade, recently expanding its plant to streamline logistics and boost production.

“We doubled output in the past five years, which is an exciting sign for our business,” said Silvio Smiderle, general manager of Pama’s Shanghai unit, citing Lingang’s access to clients and proximity to Yangshan Port as key advantages.

Lingang’s industrial park is part of broader efforts to deepen Sino-Italian cooperation in trade, technology, and investment. Officials hope it will serve as a model for China-Europe economic collaboration, reinforcing Shanghai’s role as a gateway for European businesses in China.