The Yangtze River Delta region (hereinafter referred to as the “Delta Region”) continues to stand at the forefront of China’s high-quality economic development and remains a crucial destination for foreign investment. Comprising the municipalities and provinces of Shanghai, Jiangsu, Zhejiang, and Anhui, the Delta Region plays a strategic role in China’s national development. As of 2023, the region’s economic output surpassed RMB 30 trillion, accounting for approximately one-quarter of China’s total GDP as well as some 39% of the national total FDI inflow. The region’s success lies in its deeply integrated industrial clusters, extensive logistics and transportation networks, robust innovation capacity, and pro-business policy framework, and supports both domestic and international enterprises.
In order to advance regional integration and innovation, the Chinese government launched a new Three-Year Action Plan (2024–2026), identifying 165 key initiatives across nine focus areas. These include the creation of globally competitive industrial clusters, improved cross-border data flow mechanisms, and enhancements to coordinated urban development. The region is prioritising strategic emerging industries such as new energy vehicles (NEVS), integrated circuits, artificial intelligence, and biomedicine, thereby attracting substantial foreign interest.
One focal point is the promotion of the Yangtze River Delta Eco-Green Integrated Development Demonstration Zone, which introduced 18 new institutional innovations in early 2025. These include exemptions from stamp duty on offshore trade transactions and the relaxation of value-added telecommunications restrictions, aimed at boosting international competitiveness and streamlining administrative processes to further promote green investments in the region.
R&D continues to be a cornerstone of the region’s strategy. Between 2018 and 2023, the Delta Region’s R&D intensity rose from 2.81% to 3.34%, reflecting its transition toward innovation-led growth. In 2024 alone, the region accounted for over 32% of China’s patent grants, underscoring its status as a national innovation powerhouse. The economic zone is emerging as a “strategic fulcrum” of China’s innovation agenda, thanks to its robust academic institutions, high R&D investment rates, and ability to commercialise technological breakthroughs rapidly, due to its unparalleled economies of scale in several industries. The economic zone is increasingly positioning itself as a strategic fulcrum of China’s innovation agenda, driven by its strong academic institutions, high levels of R&D investment, and exceptional capacity to commercialise technological breakthroughs, enabled by unmatched economies of scale across key industries.
Shanghai remains a core driver of the Delta Region’s foreign investment strategy, seeking to strengthen its position as a leading global metropolis constructed around the ‘Five Centres’ goal. The municipality has reinforced its Global Partnership Program for Promoting Foreign Investment, establishing alliances with financial institutions, professional service providers, industrial parks, and foreign business associations. Foreign-invested enterprises in Shanghai are now eligible for streamlined services, funding incentives, and access to government-enterprise dialogue. In the first half of 2023, the city registered 2,541 new foreign-invested enterprises, a year-on-year increase of 63.3%, with a total contracted foreign capital inflow exceeding USD 12.7 billion.
The Delta Region stands out for its exceptional connectivity, advanced logistics, and robust infrastructure. It hosts China’s most densely concentrated clusters of high-end manufacturing and service industries, notably in automotive components, semiconductors, and green energy technologies. This unique blend of a strong industrial foundation and progressive policy framework positions the Delta Region as China’s most competitive subnational economy, with Shanghai at its core.
Furthermore, the Delta Region has also expanded its support for cross-border investment. Recent reforms include accelerated RMB settlement for foreign firms, expanded export credit insurance coverage, and the development of a unified international investor service platform. These initiatives are backed by policies aimed at improving transparency and ensuring a level playing field between domestic and foreign-invested enterprises. The region’s ability to maintain consistent investment policies and ensure legal clarity is frequently highlighted by international investors as a key comparative advantage, although they also stress that room for improvement remains.
Infrastructure development remains integral to the Delta Region’s long-term strategy. Significant projects include the opening of the Shanghai-Suzhou-Huzhou high-speed rail line and the expansion of the Nanhui intermodal transport corridor, designed to improve east-west logistics across the Yangtze River Economic Belt. These upgrades are aligned with China’s goal to establish a comprehensive transport network to support its Dual Circulation strategy—one of the pillars of China’s 14th Five-Year Plan.
Meanwhile, coordinated policy development among the four administrative units enhances industrial complementarity and efficient resource distribution. Regional integration fosters strong synergies between upstream innovation hubs, such as Suzhou, and downstream manufacturing centres, including Ningbo and Wuxi, resulting in a fully integrated value chain ecosystem.
Sustainability is also a focal point of the agenda. Local authorities are promoting low-carbon industrial upgrades and smart city applications. Initiatives such as carbon trading pilots, energy efficiency mandates, and green finance platforms further embed environmental governance in the region’s development model. This makes the Delta Region not only an economic powerhouse but also a key test bed for China’s green transition.
The Yangtze River Delta Economic Zone remains a flagship of China’s economic modernisation and a magnet for global investment. With a clear policy roadmap, deep industrial expertise, and an expanding innovation ecosystem, the Delta Region provides foreign investors with a stable and high-potential platform to engage with China’s domestic market and international supply chains. As institutional reforms deepen and regional integration accelerates, the region is well-positioned to serve as a global business hub in the years to come.
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The Yangtze River Delta region (hereinafter referred to as the “Delta Region”) continues to stand at the forefront of China’s high-quality economic development and remains a crucial destination for foreign investment. Comprising the municipalities and provinces of Shanghai, Jiangsu, Zhejiang, and Anhui, the Delta Region plays a strategic role in China’s national development. As of
