Electric car maker Tesla exhibits its Model X at the second China International Import Expo. [Photo by Zhang Dandan/China Daily]

Sean Stein, US consul general in Shanghai, said a lot of international companies, including many from the US, have chosen Shanghai because of the city's business environment.

"The authorities know that it is important to have good relations with companies, which is actually a 'secret weapon' for them to attract international firms," said Stein.

He made the remarks in a speech when US component supplier DRiV opened its Asia-Pacific headquarters in the city's Yangpu district last Friday.

The authorities in Shanghai have also been promoting the development of smart and connected vehicles.

Shanghai issued the country's first permits to conduct operational tests of such vehicles in September, marking China's latest step toward the commercialization of autonomous driving.

And the city opened its first road section for testing smart and connected vehicles in March 2018, and so far the roads have a combined length of 53.6 km, covering 1,580 different scenarios.

"China has the most complicated traffic scenarios in the world, so the BMW Group's automated driving R&D in China has become an important part of autonomous driving development worldwide," said BMW.

BMW was among the first companies to receive the test permits in Shanghai. It has set up autonomous driving R&D teams in Shanghai and Beijing, composed of nearly 100 engineers.

They focus on the development and validation of automated driving function based on typical traffic scenarios in China.

David Nagy, a senior executive at executive search firm DHR International, said Shanghai has a competitive edge over other cities in attracting professionals because of abundant career opportunities.

Besides newcomers like Tesla, a big number of companies have operations in the city ranging from carmakers like GM and Volkswagen to suppliers including Continental, ZF and Bosch.

"Shanghai is a city that is attractive for engineers to come, because if it doesn't work out with this company, there are other companies that I can go to," said Nagy.

"For mid-level individuals starting to have families, it's also a nice place to live. It presents career opportunities as well, and all the cultural activities, schooling and so on."