As Shanghai, mainland China’s economic hub, moves further towards services, manufacturing could move to cities such as Suzhou, which on Friday earmarked 70 square kilometres (27 square miels) of land for such business, with priority to be given to foreign investment.
Suzhou, the second biggest city in the Yangtze River Delta after Shanghai, is no stranger to foreign direct investment (FDI), having used it to fire up its economy over the past four decades of China’s opening up. With economic output expected to top 2 trillion yuan (US$285.7 billion) this year, on Friday, the city’s government said it was aiming to become a world-class metropolis.
The planned expansion of its manufacturing sector with the help of foreign investment would lead to “another development miracle”, Lan Shaomin, the city’s Communist Party boss, told a government work conference.
“We will make opening up our strongest driver for sustained development, the greatest asset for the new era and the shiniest logo of connectivity with the outside world,” he said. “We will strive to spearhead high-quality development and amaze the world with another development miracle.”
Lan told the conference the city’s economic output had jumped by more than 600 times since 1978, and that it had attracted a total of US$132 billion in FDI as of the end of last year. Its gross domestic product is expected to grow at an annualised pace of 6 per cent between this year and 2022, its government has said.
The city’s government did not elaborate on what policies it would offer to attract foreign funds, but announced that officials and organisations playing a role in drawing top foreign businesses would be granted cash awards out of a fund of 200 million yuan (US$28.7 million) reserved for this purpose.
Suzhou, located 100 kilometres northwest of Shanghai in China’s eastern Jiangsu province, has remained committed to strengthening its manufacturing sector, particularly its advanced equipment, medical devices and nanotechnology industries.
“As Shanghai focuses on its services sector, manufacturing investment could spill over to neighbouring cities such as Suzhou,” said Yin Ran, a Shanghai-based angel investor dealing with the manufacturing sector. “By attracting corporate investors with top technologies and manufacturing techniques, developed cities in China are displaying Beijing’s firm stance on globalisation.”
Beijing has been working on further liberalising its financial markets and manufacturing industries to draw more foreign capital since 2018, amid its trade war with the United States. The two countries signed a “phase one” trade deal this month.
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