Administrative Procedures of Shanghai Municipality on Boosting the Development of Specialty Industry Clusters of Small and Medium-sized Enterprises

Chapter I General Provisions

Article 1 With a view to further elevating the level of the professionalized, characterized and intensified development of the industrial clusters of small and medium-sized enterprises, and promoting the high-quality development of small and medium-sized enterprises (SMEs), these Procedures are formulated in accordance with the 14th Five-year Plan for Promoting the Development of Small and Medium-sized Enterprises, the Interim Procedures for Boosting the Development of Specialty Industry Clusters of Small and Medium-sized Enterprises, the 14th Five-year Plan of Shanghai Municipality on Promoting the Development of Small and Medium-sized Enterprises and other relevant laws and rules.

Article 2 The specialty industrial clusters of small and medium-sized enterprises (hereinafter referred to as the "clusters") referred in these Procedures include those located in the district-administrative areas and guided by the new development philosophy, with SMEs as the main body. The clusters are characterized with focused dominant industries, prominent advantages and special features, concentrated resource elements for development, vibrant innovative vitality, efficient collaborative networks, excellent governance and services, and stronger core competitiveness.

Article 3 The work on boosting the clusters' development shall take the strategy of accelerating the advancement of new type industrialization and the establishment of modern industrial development system as the guidance, and take the concept of enhancing the core competitiveness of SMEs, stimulating the regional economic vitality, elevating the resilience of industrial and supply chains, and the supporting capability of key links as the target. The work shall also stick to the principle of fully, accurately, and comprehensively carrying out the new development philosophy, combining the government guidance with market dominance, integrating the cultivation of enterprises with the strengthening of industries, and uniting the dynamic management with precise services.

Article 4 Shanghai Municipal Commission of Economy and Informatization (hereinafter referred to as the "Municipal Economy and Informatization Commission") shall be responsible for the promotion of the overall planning and coordination for boosting the clusters’ development, the motivation of formulating and implementing the supporting policies, the formulation and optimization of development plans for the clusters' development, and the implementation of such work as the clusters’ cultivation and administration, the organization and application, the evaluation and recognition, as well as the supervision and assessment.

Article 5 The district administrative department of SMEs shall be responsible for the application, preliminary review, and recommendation of the clusters in its own district, and do a good job of cultivation, management and other daily work relevant to the clusters.

Chapter II Recognition Standards

Article 6 The recognition of a cluster shall satisfy the following requirements:

1. Legal and compliant operation. The enterprises in the cluster must not have experienced any bigger, or above, safety, quality, or environmental pollution accidents, serious, or above, cyber security or data security incidents, tax evasion, illegal activities, severe credit violations, or other serious issues in the past three years.

2. With a stronger core competitiveness. The dominant industry of the cluster shall conform to the national industrial policies and this Municipality’s "14th Five-Year Plan". It shall serve as a pillar or specialty industry of the district; its development level shall stand in the front of this Municipality in its own specific field, and the focal support to it shall comply with the industrial cluster of this Municipality’s modern industry system. The cluster shall generally cover no more than 100 square kilometers, with an annual output value of over 3 billion yuan in the past three years. The output value of SMEs shall account for more than 50% of the cluster's total output, and that of the dominant industry shall account for more than 50% of the total, with an average annual growth rate of over 10%.

3. Significant achievements in the gradient cultivation of high-quality enterprises. The cluster shall continuously engage in the gradient cultivation of high-quality enterprises, with at least one municipal-level enterprise of dominant industry or national-level manufacturing individual champion enterprise or "Little Giant" enterprise that is specialized, proficient, characteristic and up-to-date, or over ten specialized, proficient, characteristic and up-to-date SMEs, innovative SMEs, or national high-tech enterprises.

4. Efficient collaboration in industrial and supply chains. The industrial chain layout shall be reasonable, with stronger supporting capabilities in key links. There shall be a well-developed mechanism of integration and collaboration for upstream and downstream enterprises in production, supply, and marketing, an industrial chain map, and a shared mechanism for general production equipment, logistics, warehousing, human resources, and design. The cluster may have already collaborated with advanced manufacturing clusters, national demonstration bases for new industrialization, and chain-owner enterprises.

5. Stronger collaborative innovation capability. The cluster shall see an average annual growth of over 5% in R&D expenditure by SMEs over the past three years; and shall have a stable and close cooperation with large enterprises, universities, and research institutes, and a well-developed mechanism for synergistic innovation among enterprises of all sizes in the cluster and for collaborative innovation among the industry, academia and research. The cluster shall have at least one district-level, or above that level, innovation platform, engage in the formulation or revision of at least two or more standards for the dominant industry, and see an average annual growth rate of over 15% in valid invention patents among SMEs, and at least 15 valid invention patents per 10,000 employees in SMEs.

6. Noticeable digital transformation effects. The cluster shall have a higher construction level of new information infrastructure, a wide application of digital equipment and systems, and organize and carry out the digital diagnosis for manufacturing enterprises. Prominent online platform (cloud platform) achievement. The adoption rate of online platform (cloud platform) among SMEs shall be over 10%, with a steady increase in the application of industrial software, ensuring the interconnection of key production data among cluster enterprises. It shall also carry out the popularization of the innovation and application of new models and new business forms like smart manufacturing and industrial internet, and establish and perfect the security system for industrial internet.

7. Higher level of green development. The cluster shall have a reasonable energy consumption structure, with a continuously declining carbon dioxide emission, higher resource utilization efficiency, an effective control over pollutant emission, and a green low-carbon service mechanism. The clusters of high-energy-consuming industries shall have the energy efficiency above the industry benchmark standards, and those of high-water-consuming industries shall have the water efficiency level above the industry benchmark standards.

8. Active participation in the industrial opening-up and cooperation. The cluster shall engage in the international cooperation mechanisms or exchange activities for the dominant industry, conduct exchanges and cooperation in technology, management, talent, or capital, and drive a rapid development of foreign trade in terms of products and services through establishing overseas branches or other means.

9. Stronger governance and service capability. The cluster shall establish an operational management organ, set up or introduce high-quality public service institutions for SMEs, and form a team of enterprise service specialists to provide information services, entrepreneurship guidance, innovation support, personnel training, market promotion, investment and financing, and management consulting services to SMEs in the cluster. It shall also establish a mechanism for the coordination and handling of appeals, protect the legitimate rights and interests of SMEs, promote a full coverage of propagation and implementation of development policies for SMEs in the cluster, and formulate a clear development plan with complete work measures for the next three years.

Chapter III Recognition Procedures

Article 7 The recognition of clusters shall adhere to the principles of voluntary application, openness and transparency, evaluation-based establishment, continuous upgrading, tracking and monitoring, and dynamic adjustment.

In principle, the recognition shall be conducted once a year, and the application period shall be subject to the specific application notice issued by the Municipal Economy and Informatization Commission.

Article 8 The operational management organ of the cluster shall, as the principal applicant, submit the application materials to the administrative department of SMEs in each district according to the requirements of the application notice, and shall be responsible for the authenticity and completeness of the application materials. Every district administrative department shall be responsible for the preliminary review of the clusters in its own jurisdiction, and recommend the preliminarily qualified clusters to the Municipal Economy and Informatization Commission.

Article 9 The Municipal Economy and Informatization Commission shall determine the cluster to be recognized through formal reviews, expert evaluations, and on-site spot checks, and publish the list of qualified clusters after a public notice period with no objections.

Chapter IV Cultivation and Support

Article 10 The municipal and district administrative departments of SMEs shall focus on the following aspects to cultivate the clusters:

1. Enhance the advantages of dominant industries in the clusters. Advance the synergy and integrated development between the clusters and the modern industrial system. It is important to precisely position the clusters’ dominant industries, to stabilize, strengthen, supplement, and extend the industrial chains with a clear target, to smooth the clusters' collaboration network, to enhance the specialized supporting capabilities, to promote the coordinated development of enterprises of all sizes, and to strengthen the gradient cultivation of high-quality SMEs.

2. Stimulate the innovation capabilities of the clusters. Build up the cluster’s multi-level innovation platforms, integrate and open up the innovation infrastructure and service resources, and establish a stable innovation and cooperation mechanism between the clusters and high-quality enterprises, universities, and research institutions. Conduct the synergistic innovation among the dominant industries of all sizes and the collaborative innovation in general technologies among the industry, academia, and research, and strengthen the application of intellectual property rights and the development of standards.

3. Advance the digital upgrade of the clusters. Guide the clusters to strengthen the construction of new-type information infrastructure, build up resource-sharing and management platforms, and elevate the level of digitalized management. Guide the enterprises in the cluster to apply the Guidelines for Small and Medium-sized Enterprises' Digital Transformation and the Index of Digitization Capability Evaluation and Assessment for Small and Medium-sized Enterprises, popularize the systematic solutions to the smart manufacturing equipment, the standards, and the small, fast, light and accurate digital products, deepen the integrated application of industrial internet and industrial software, and elevate the level of digital transformation.

4. Accelerate the green and low-carbon transformation of the clusters. Optimize the cluster’s energy consumption structure, popularize the application of clean energy, practice the energy-saving renovation and the green low-carbon technology transformation, strengthen the comprehensive resource utilization and pollution treatment, and perfect the green manufacturing system.

5. Deepen the opening-up and cooperation of the clusters. Support the cluster to participate in the construction of the Belt and Road, enhance the collaboration in talent, technology, capital, and resources, and to participate in the activities of exhibitions, international cooperation mechanisms, and exchanges as a unit.

6. Enhance the governance and service capabilities of the clusters. Strengthen the construction of the public service system, enrich the service contents, upgrade the service capability, reinforce the service assessments, establish the governance mechanism of "mutual consultation, joint contribution, shared benefits and win-win results" for the clusters, and strengthen the safety production awareness and the protection of the legitimate rights and interests of SMEs. It shall be also necessary to coordinate the overall planning of cluster development, to formulate the cluster cultivation plans, and to clarify the development goals and work measures.

Article 11 The Municipal Economy and Informatization Commission shall establish a cluster cultivation pool and support the clusters to enjoy the municipal special funds for the development of SMEs and other financial support according to the relevant provisions. Encourage the social funds and various investment funds to actively support the cluster development and the major project construction. Encourage the financial institutions in Shanghai to increase the financing support to the clusters.

Article 12 The municipal and district administrative departments of SMEs shall bring into full play the function of this Municipality’s public service platform for SMEs and the entrepreneurship and innovation demonstration bases for SMEs, and guide the public service institutions and demonstration bases to actively provide the SMEs in the clusters with public welfare services such as the policy consultation and talent training. Encourage various social service institutions to provide customized, differentiated value-added services for the development of the SMEs. The various associations and chambers of commerce shall play a bridging and linkage role to support the cluster construction and the development of the SMEs.

Article 13 Every district administrative department of SMEs shall strengthen the policy support to the clusters in terms of fiscal, finance, industry, innovation, land use, and talent. Include the high-quality SMEs in the clusters into the list of "service packages" for key enterprises, promote the precise implementation of various enterprise-benefiting policies and create a stable, fair, transparent, and predictable business environment.

Article 14 Every district administrative department of SMEs shall regularly summarize the experience and practice  in the elevation of the level of innovation, service, digitalization, greening, and internationalization of the clusters, as well as the ones that propel the coordinated development of industrial and supply chains; conduct the publication of typical cluster practice cases and excellent cluster name-brands, and report the relevant information to the Municipal Economy and Informatization Commission.

Chapter V Dynamic Management

Article 15 The validity period of the clusters shall be three years. Upon the expiration, the Municipal Economy and Informatization Commission shall organize a re-evaluation. The clusters that pass the re-evaluation shall have their validity period extended by another three years.

Article 16  Every district administrative department of SMEs shall strengthen the continuous tracking on the implementation situation of the clusters' development plans, progress of goals, work experience, and problems and their improvement measures; and organize the operational management organs of the clusters to submit a report on the clusters’ development situation of the previous year to the Municipal Economy and Informatization Commission before April 10, every year.

Article 17 The Municipal Economy and Informatization Commission shall entrust a third party to conduct service evaluations on the operational management organs of the clusters every year, and shall supervise and assess the overall development situation of the clusters.

Article 18 The Municipal Economy and Informatization Commission shall, in accordance with the requirements of the Ministry of Industry and Informatization, select and recommend the outstanding clusters to apply for the national specialty industry clusters for SMEs.

Article 19 The recognized cluster shall be revoked under any one of the following circumstances:

1. failure to apply for a re-evaluation upon expiration of the validity period, or failure to pass the re-evaluation;

2. submission of false information or involvement of illegal acts;

3. failure to submit the annual development report of the cluster on time, or refusal to accept or cooperate with the tracking and supervision work;

4. failure to update and report the cluster’s important changes such as the dominant industry, spatial area, or operational organ on time; 

5. and occurrence of any significant, or above, safety, quality, or environmental pollution accidents, major cybersecurity or data security incidents, or acts of tax evasion, violation of laws or rules, severe dishonesty, or other serious, or above, issues in the cluster enterprises.

Chapter VI Supplementary Provisions

Article 20 The Municipal Economy and Informatization Commission shall be responsible for the interpretation of these Procedures.

Article 21 These Procedures shall be effective as of February 22, 2024 and be valid until February 21, 2029.