Suzhou’s GDP in the 1st quarter of this year topped half a trillion renminbi, a year-on-year growth of 7.9 percent, top among the 26 cities in China with an annual GDP of over ¥1 trillion. But how exactly has that come to be?
Pivotal has been the private economy. In Suzhou, that is responsible for more than half of the city’s total economic output, more than 60 percent of tax revenue and over 80 percent of urban employment. And in Suzhou, more than 90 percent of enterprises are privately owned. That’s a whopping total of 831,400 firms.
Xu Tianshu is Director of the Suzhou Research Centre at the Yangtze River Industrial Economics Research Institute and a professor with the School of Business at Suzhou University of Science and Technology. Speaking with China Report, Xu Tianshu says there are essentially three types of private enterprises in Suzhou.
The first comprises those dating back to the very beginning of China’s opening up; township enterprises that were praised by Deng Xiaoping as “emerging” in the 1980s.
Then there are the foreign-funded private enterprises which gathered in Suzhou as the City became a magnet for foreign investment before and after China joined the World Trade Organisation.
Lastly, there are the relative newcomers, comprising the rapidly-developing small and medium-sized scientific, technological innovators; private enterprises to have taken hold in the past 10 years.
All well and good, but not enough to adequately explain Suzhou’s juggernaut development. For that’s a software issue, specifically local government’s approach to handling private enterprise.
Xu Weijuan is Chairman of Suzhou Collaborative Innovation Intelligent Manufacturing Technology Co., Ltd. “Don’t disturb when there is nothing to do, answer all questions and respond to all requests”, said Xu Weijuan as to the attitude of Suzhou government departments at all levels towards private enterprises.
“In this working environment, our company can grow from a small blade of grass to a big tree step by step. … We must work hard to make the company better and create more profits, and taxes. Only in this way can we repay the government’s care.”
So where does Suzhou go from here? The 2024 Suzhou Municipal Government Work Report proposes that Suzhou should build a highland for the development of the digital economy, one that deepens the city pilot of digital transformation for small and medium-sized enterprises.
But Suzhou is still more than this. It’s a place where actions speak louder than words.
Xu Tianshu, who attended Suzhou’s “First Meeting of the New Year” (新年第一会) this year, told reporters that the people sitting in the first three rows of the venue were not party and government officials as is almost always the case, but representatives of local science and technology enterprises. And that’s a large part of the secret to Suzhou’s success.
