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Main Experience of the Development Zones and Its Contributions to the Economic Development of Suzhou


By Li Zhaoxi & Jia Tao, Enterprise Research Institute of DRC Research Report No.085, 2007

I. In Recent Years, the Economic Strength of Suzhou City Has Been Boosted up Rapidly and Its Opening-up Degree Has Been Improved Swiftly

A Chinese saying goes like this: "Just as there is paradise in heaven, there are Suzhou and Hangzhou on earth". As a beautiful garden city, Suzhou's economy has developed by leaps and bounds in recent years.

1. A survey of Suzhou and main economic indexes

Suzhou city has a total area of 8,488 square km2, with a total population of over nine million, and out of that over three million are floating population and 6.07 million are resident population. Suzhou governs five county-level cities, including Zhangjiagang, Changshu, Wujiang, Kunshan and Taicang, which are all among the top one hundred county-level cities in China. It also exercises control over several districts. In recent years, especially after the speech given by Deng Xiaoping during his inspection tour in south China in 1992, Suzhou's economy has been developing swiftly, and has become one of the cities with the rapidest social and economic development. Its economic aggregate has been increased by twenty times in the past fifteen years, through utilizing foreign investment. Its trading volume of import and export has been increased by a large extent. During the Tenth Five-Year Plan period, the GDP of Suzhou had an annual growth rate of 39.5% with financial revenue standing at 40.4%, and the total amount of export and import at 55.5%.

In 2005, GDP of Suzhou reached RMB 402.652 billion yuan, ranking first in Jiangsu Province and fifth in China following Shanghai and Beijing; regional financial revenue amounted to 71.81 billion yuan, ranking first in Jiangsu Province and sixth in China; the total amount of export and import hit US$140.589 billion, ranking first in Jiangsu Province and third in China. For the main economic index of Suzhou in recent years, please refer to Table 1.

2. Comparison between Suzhou and seven neighboring cities

In Jiangsu Province, Suzhou, Wuxi, Changzhou, Nanjing, Zhenjiang, Nantong, Yangzhou and Taizhou are eight cities along the Yangtze River. They are important parts of the city cluster of the Yangtze River delta and play the leading roles in bolstering the economic development of Jiangsu Province. According to statistics, the eight cities along the Yangtze River possess about half of the total area and population of Jiangsu, but their total economic aggregate amounts to 80% of that of the province. And among the eight cities, Suzhou is the strongest in terms of economic development in recent years.

Table 1 Main Economic Indexes of Suzhou 1990~2005

Main Experience of the Development Zones and Its Contributions to the Economic Development of Suzhou

Data source: Statistics almanac of Jiangsu Province over the past years

Suzhou was once a consuming city with under-developed economy. Among Suzhou, Wuxi and Changzhou, Suzhou has the largest area, but had the weakest economic strength. However, Suzhou has begun to exceed the other seven cities since 1990s, and developed rapidly to become far ahead in main economic indexes after entering the 21st century. In 1999, GDP of Suzhou (135.843 billion yuan) was a little higher than that of Wuxi (113.843 billion yuan). However, in 2005, GDP of Suzhou (402.652 billion yuan) was almost the sum of that of Wuxi (280.5 billion yuan) and Changzhou (130.221 billion yuan). The per capita GDP of Suzhou in 1999 was 23,595 yuan, less than 26,294 of Wuxi. But in 2005, it reached 54,165 yuan, exceeding that of 50,964 in Wuxi and ranking first in the province. In respect of total financial revenue, the number of Suzhou was 10.938 billion yuan in 1999, less than 12.849 billion yuan of Nanjing; in 2005, the total financial revenue of Suzhou reached 71.81 billion yuan, far ahead of the other seven cities.

In view of export-oriented index, since the end of the 1990s, Suzhou has also played a leading role in import and export volume, contracted foreign capital and the volume of foreign investment actually used. In 2005, the import and export volume of Suzhou city topped US$140.678 billion, more than that of the other seven cities; the contracted foreign capital of Suzhou was US$15.272 billion, about that of Wuxi, Changzhou and Nanjing; the volume of foreign investment actually used amounted to US$5.116 billion, about the sum of Wuxi, Changzhou, Nanjing and Nantong.

II. The Economy of the Development Zones Plays a Major Role in the Rapid Development of Suzhou

The rapid transition of Suzhou from a consumption city is due to the fact that it seized the following three opportunities. The first was the development of rural industry which was initiated in the end of the 1960s, actually started in the 1970s and developed in the 1980s through the utilization of the technology and talents of Shanghai to develop township enterprises. It was cited as the "model of development in southern Jiangsu" in the 1980s. The second was the vigorous development of "export-oriented economy" through the implementation of the policy of reform and opening-up. The third was the adjustment of economy structure, the vigorous introduction of foreign capital and the development of private economy, which contributed to the souring economy of Suzhou. And as the undertaker of investment subjects, the development zones contributed a lot to the development of Suzhou economy.

According to the data of Suzhou Foreign Economy and Trade Bureau, Suzhou has a number of development zones, including five national development zones represented by Suzhou Industrial Park, Suzhou National New & Hi-Tech Industrial Development Zone and Kunshan Economic Technology Development Zone, eleven provincial development zones, six export processing zones, two bonded logistics centers (type B), and one bonded logistics park linking development zones and port (Table 2).

1. Economic contributions made by the development zones

The plenty of development zones constitute important parts of Suzhou economy and lead the rapid development of Suzhou economy. In recent years, the main economic indexes of the development zones in Suzhou have reached an annual growth rate of over 40%, and the economic aggregate has increased rapidly. They have made ever more contributions to the regional economy. The following data indicate the contributions made by these development zones to the whole city: the development zones in Suzhou only account for 7.2% of the city's area, but create 48.1% of the GDP, 60% of the industrial added value, 46.6% of the municipal financial revenue and 79.5% of the foreign trade export volume of Suzhou city.


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