As an important industrial, financial, commercial and cultural hub, Shanghai is arguably the most obvious example of how a subnational decision-making body shapes China’s foreign policy. Shanghai’s importance to the country’s foreign affairs, particularly Sino-US relations, is reflected in its enduring function as a venue for diplomatic meetings. This was most notable in 1972 when President Richard Nixon visited the city and signed the Shanghai Communiqué with Premier Zhou Enlai, signalling the normalization of Sino-US relations. More recently, Shanghai hosted the Biden administration’s first official visit to China, which culminated in a joint commitment to cooperate on the climate crisis.
Shanghai is a spearhead for economic reforms and liberalization. In August 2019, six years after the launch of the China (Shanghai) Pilot Free Trade Zone (SHFTZ), China’s State Council approved plans to establish a new area of the free-trade zone – the Lingang New Area. The State Council intends for the expansion to ‘lead the healthy development of economic globalization’ by helping China to further open up to foreign investors. A month later, the Shanghai Municipal People’s Government (SMPG) published a document outlining its plans to encourage foreign investment and facilitate the SHFTZ and Lingang New Area by introducing innovative policies. Shanghai was also the first regional jurisdiction to propose guidelines for implementing the Foreign Investment Law (FIL), which is the basis for a new investment framework that promises equal treatment for foreign and domestic enterprises. The SMPG has a vision to build itself into an ‘excellent global city’ by 2035, as outlined in the Shanghai Master Plan 2017–2035. Through these long-term plans, the SMPG’s influence on central directives can be interpreted as ‘carpetbagging’ (i.e. modifying the implementation of policy to pursue local interests). By introducing new ideas on how to implement foreign policy,
Shanghai has eroded some of the central government’s authority.
The SMPG’s ‘carpetbagging’ of diaspora-management policies, while in line with Beijing’s interests, illustrates how provincial-level governments can influence the policy implementation process in pursuit of their own interests.
The SMPG’s strategy to engage Chinese nationals living overseas is another example of the subnational government ‘carpetbagging’ central government policy. In a speech delivered at the 19th Party Congress in October 2017, President Xi emphasized the need to ‘maintain extensive contacts with overseas Chinese nationals, returned Chinese and their relatives and unite them so that they can join our endeavours to revitalize the Chinese nation’.
The central government’s policies to encourage overseas Chinese nationals to return home are viewed by many as a strategy to attract high-quality professionals to contribute to the nation’s development in education, science, culture and health, thereby boosting China’s economy and international status. While the central government has set the overall agenda on issues concerning overseas Chinese nationals, the SMPG has shaped the state–migrant relationship dynamics through its subnational policies and by promoting ‘return and repatriation as tools for co-opting local development’.
City-level policies on migration governance have led to competition with other cities and regions. Officers working in the Shanghai Office for Overseas Chinese make an active effort to ‘maintain a high profile’ and ‘utiliz[e] available corridors to push top policy goals forward’. The SMPG’s ‘carpetbagging’ of diaspora-management policies, while in line with Beijing’s interests, illustrates how provincial-level governments can influence the policy implementation process in pursuit of their own interests.
