Suzhou resetting its focus on the services sector
Having seen the limits of manufacturing-based growth, Suzhou, one of the mainland's wealthiest cities, will try to tap the services sector in the next five years, Vice-Mayor Huang Qin (pictured) says.
With huge manufacturing and export revenues from one of the mainland's best-known foreign investment zones, a formerly difficult partnership with Singapore, the city's economic output totalled 900 billion yuan (HK$1.65 billion) last year.
That's 142,000 yuan for each of its 6.3 million registered residents. If the city's 5.85 million migrant workers and family members are included, per capita gross domestic product still reached 74,000 yuan.
But there is a new challenge. The 'golden time' for manufacturing, especially low-tech, export-oriented processing, was already past, Huang said, echoing recent remarks from Suzhou party chief Jiang Hongkun that the city would have to redefine itself.
'Historically, Suzhou used to be known as a cultural city, and a city with a beautiful environment and comfortable living,' said Suzhou tourism official Yu Yuming . 'But now manufacturing has overshadowed everything. Even though we received 70 million visitors last year and were one of the top cities in China in tourism revenues, our contribution to local GDP was just 5.2 per cent.'
Huang (inset) said Suzhou would only be able to enlarge the share of services 'bit by bit' over the five years and would be content to be known as 'Shanghai's backyard garden'.
Suzhou, within an hour's drive from Shanghai, would maintain much of its hi-tech, highly skilled manufacturing, Huang said, but 'will say no to low-cost expansion. We don't want it any more'.
In the meantime, Suzhou is eyeing logistics services for its own industry and for Shanghai and the entire Yangtze River Delta - in ports, transport and warehousing.
'This is a sector that has seen the most rapid growth,' Huang said, while adding that tourism would remain a pillar industry.
Shen Wenjuan, director of the municipal tourism administration, said that apart from the ancient city and its famous courtyard gardens, Suzhou was expanding tourism facilities in newly developed lakeside areas, to try to host more trade shows and conventions, and to attract more weekend holiday-makers from Shanghai, especially after the planned connection of its urban rail network with Shanghai's.
As for the once-troubled relationship with Singaporean investors, Suzhou officials admitted that the two sides in China Singapore Suzhou Industrial Park Development Group had frequent quarrels in the late 1990s, when the project kept losing money beyond its planned break-even point.
There were disagreements over building plans and on ways to handle disagreements. The Singaporeans could complain to the central government, while their local partners had no one to listen to them in Beijing, Suzhou officials said.
Around 2000, in a process initiated by Chen Deming , then Suzhou mayor and now commerce minister, the Chinese share of the project increased from 35 per cent to 65 per cent and the Chinese side gained management experience. Huang said the industrial park was now quite healthy and relations with the Singaporeans were amicable.
He said the municipal government planned to seek a stock market listing for the company as a specialist in the management of new industrial zones and new urban areas.