The location in Shanghai with the most factories is the Pudong New Area. This area has been a major industrial hub since its establishment in the 1990s. The Pudong New Area is home to numerous industrial parks and free trade zones, which have attracted a significant number of factories and manufacturing companies. According to the Shanghai Statistics Bureau, as of 2020, the Pudong New Area accounted for approximately 40% of the total industrial output in Shanghai.

The reason for the high concentration of factories in the Pudong New Area can be attributed to several factors. Firstly, the government has actively promoted industrial development in this area as part of its strategy to transform Shanghai into a global financial center. This has led to substantial investments in infrastructure and the establishment of special economic zones that offer favorable policies and incentives for businesses. Secondly, the Pudong New Area is well-connected by transportation networks, including the Shanghai Pudong International Airport and the Shanghai Yangtze River Bridge, which facilitate the import and export of goods. Lastly, the area has a large pool of skilled labor and a strong industrial base, making it an attractive destination for manufacturers.

Data from the Shanghai Municipal Bureau of Statistics reveals that the Pudong New Area has over 20,000 industrial enterprises, with a significant portion of them being factories. These factories are involved in various industries, including automotive, electronics, pharmaceuticals, and petrochemicals. The presence of such a diverse range of industries further underscores the importance of the Pudong New Area as a major industrial hub in Shanghai.

In contrast, other areas in Shanghai, such as the city center and the Xuhui District, have fewer factories due to their focus on services, finance, and tourism. These areas have been developed to cater to the growing demand for high-end services and entertainment, which has led to a decline in industrial activities.

In conclusion, the Pudong New Area in Shanghai is the location with the most factories, primarily due to government policies, transportation infrastructure, and the availability of skilled labor. This area has become a vital industrial hub in Shanghai, contributing significantly to the city's economic growth and development.