Suzhou Business
Information
Suzhou is the
largest economy in the Jiangsu province which accounts for
19.6% of the provincial total GDP. Suzhou has an area of 8,488
sq.km. and a population of 5.84 million. The Suzhou municipality
consists of three cities: Changshu, Zhangjiagang and Kunshan.
Development
of Private Economy
Private enterprises
are gaining importance in Suzhou's economy. Fixed assets investment
by private and sole proprietor companies reached RMB 23.5
billion in 2002, increased by 70.1% and accounted for 28.9%
of Suzhou's total fixed assets investment in 2002, compared
to 24.5% from 2001.
Private companies are
mainly engaged in manufacturing section (about 60%) while
the majority of self-employed individuals are in wholesale
and retail trade and catering business (about 70%).
Industry Structure
Suzhou has the
largest gross industrial output in Jiangsu province, accounting
for 25% of the provincial's total industrial output. The service
sector is also increasing in its relative share in the GDP
in recent years. Financial services are developing fast, in
particular, the insurance sector. In 2002, the total premium
income of the insurance sector reached RMB 4.7 billion (up
59% from 2001), and moved to the top in Jiangsu province from
the third position.
Although some traditional
industries, such as textiles, are still playing an important
role, Suzhou is transforming its industrial base from traditional
industries to more high tech industries. Electronics, IT,
electrical machinery, biotechnology and medicine, chemicals
and household electrial appliances have now become the six
pillar industries of Suzhou.
During the 90s, Suzhou
has adjussted its development strategy, leveraging on its
state level development zones (Suzhou Industrial, Suzhou Hi-tech
Devleopment Zone, Kunshan High-tech Development Zone, Zhangjiagang
Bonded Zone, Taihu State Tourist & Resort Development
Zone) to attract a large amount of foreign investment and
speed up the development of an externally oriented economy.
Nowadays, within the driving distance of one hour between
Suzhou Industrial Park and Shanghai, there is already a cluster
of leading IT parts and components producers (such as TSMC,
Macronix, Foxconn, Samsung, Phillips) forming the so-called
"Silicon Corridor."
The gross industrial
output of new and high-tech products reached RMB 154 billion,
accounted for 30.3% of the gross industrial output in 2002,
up from 19.5% in 1997. Suzhou's output of new and high-tech
products nearly accounted for 40% of that of Jiangsu province
in 2002. Exports of these products reached US$8.6 billion,
up 81%, accounted for 46.2% of Suzhou's total exports in 2002.
Suzhou has also built
a number of renowned brands in consumers goods such as Goodbaby
(children's bicycle) Bosideng (garment), Chunhua (electrical
appliance) and Menglan (bedding).
Suzhou is famous tourist
destination and it accounted for 26.5% of Jiangsu's total
foreign exchange income generated from tourism in 2002.
Domestic Market
The rapid growth
in sales of furniture and decoration items can partly be attributed
to the robust housing sector. In 2002, capital investment
in real estate development grew to 56.4% and sales value of
commercial housing increased by 30.8%. By end of 2002, the
number of mobile phone users reached 2.66 million, an increased
of 38.3%, representing a penetration rate of 45.5% of the
population. The popularity of mobile phones and innovative
design of new models have contributed to the rapid growth
of sales of telecommunicaions equipment.
Exports
Suzhou is the
largest export base of the Jiangsu province and the percentage
share has continued to increase in recent years, partly reflecting
the healthy industrial development and rising external orientation
of Suzhou. In 2002, Suzhou accounted for 48% of Jiangsu province's
total exports, compared to 41% in 2000. In the first eleven
months of 2003, exports of Suzhou surged by 74%.
Suzhou is exporting
to more than 140 countries or economies. The US is the leading
export market, which accounted for 25.2% of Suzhou's exports
in 2002. Other major markets include the EU (19.7%), Japan
(18.2%), Hong Kong (8.1%) and ASEAN (8.6%).
Machinery, electronic
products and related parts and components accounted for 59%
of Suzhou's exports in 2002. Other leading export items include
textiles (16%), optical and medical instruments (4.7%), base
metal produvcts (3.3%) and chemical products (2.9%).
Foreign Direct
Investment
Currently, there
are over 5,500 foreign enterprises operating in Suzhou. Up
to 2002, the cumulative utilized FDI reached US$28.2 billion,
accoouting for 25% of the Jiangsu province's totals. Over
the last few years, inflows of FDI have been growing rapidly
as reflected by the fact that cumulative utilized FDI surged
by 140% comparing 2002 to the level in 1997. Investments in
the industrial sector accounted for 83% of the cumulative
contracted FDI. In Jan-Nov. 2003, utilized foreign investment
increased by 44.4%.
Currently, among the
world's top 500 multinational companies, 85 of them already
have presence in Suzhou, and more than 30 have set up R&D
centers in Suzhou.
There are 5 state level
economic development zones and 11 provincial level development
zones in Suzhou. In 2002, these development zones accounted
for 64.9% and 74.3% respectively of the city's total contracted
and utilized foreign investment. For example, Suzhou Industrial
Park has been successful in attracting FDI. As of end of 2002,
the Park had a cumulative contracted amount of FDI at US$12.3
billion and utilized FDI at US$5.44 billionl. Among the world's
top 500 multinational companies, 35 of them already have presence
in the Park.
The leading foreign
investors are from Hong Kong, Taiwan, Singapore, the US and
Japan. However, it should be noted that, many Taiwan investments
have been channelled indirectly through third places and might
have been classified under Hong Kong or Virgin Islands. Just
in Kunshan, there are more than 1,200 Taiwan companies and
only 30 of them are listed as companies in Taiwan. |
