Suzhou active in attracting foreign investment
Since 1978, when China launched it policy of reform and opening-up, Suzhou has been active in integrating into the global economy and exploring ways of making best use of foreign investment. From 1979 to 2018 it has developed in four main areas and is now heading for high-quality development.
The policy is focused mainly on attracting foreign direct investment and accelerating domestic economic development. In 1980, the Suzhou government set up an import and export management office and, in 1983, the city was selected by the Ministry of Foreign Trade and Economic Cooperation’s foreign investment bureau as one of the pilot cities to boost foreign investment in China. The city government published a report on how to make foreign investment work the same year.
In 1985, Suzhou was listed as one of the pioneering coastal cities for opening-up. By the end of 1990, the city government approved a total of 383 foreign-invested enterprises with registered foreign investment of US$290 million, which accounted for a fourth of the total in Jiangsu Province. During the period, the actual use of foreign investment exceeded US$120 million.
In 1992, Deng Xiaoping toured the south, accelerating the opening-up of the nation to the outside world. Seizing the opportunity of the development and opening-up in Pudong and the joint development of the Suzhou Industrial Park between China and Singapore, Suzhou enjoyed its peak in attracting and using foreign investment. Entering the 21st century, Suzhou seized the opportunity of China’s entering the World Trade Organization and expanded the use of foreign investment, especially in middle and high-end manufacturing and service industries. In 2003, Suzhou even surpassed Shanghai to become the largest user of foreign investment in China.
During the period, the average registered foreign capital jumped from less than US$800,000 in 1990 to over US$4 million by the end of 2005. From 1991 to 2005, Suzhou approved over 800 projects each with investment of more than US$30 million, and the newly added registered foreign investment exceeded US$27 billion. Replacing investors from Hong Kong, investors from Taiwan took first place, followed by Japan, Singapore, South Korea and Western nations.
By the end of 2005, 107 Fortune 500 companies invested in 320 projects with registered capital of nearly US$6 billion.
From 2006 to 2012, Suzhou kept its leading position in both Jiangsu Province and the Chinese mainland. Despite the international financial crisis, Suzhou successfully took the strategic opportunity of industrial structure upgrading.
In 2009 Suzhou set up a bureau of commerce on the basis of the former foreign trade and economics bureau and trade bureau.
During the period, the newly added registered foreign capital was stable at around US$16 billion annually, and the actual use of foreign capital was around US$8 billion a year. Both figures were at the top level in Jiangsu and China.
Under the approval of the State Council, Suzhou set up Zhangjiagang bonded area, the first of its kind in Jiangsu Province, and the development zones in Kunshan, Changsu and Wujiang were upgraded to national level. As a result, the number of national-level development zones rose to 14.
Since October 2016, Suzhou has adopted a pre-establishment national treatment on foreign-invested enterprises. Over 99 percent of foreign investment registration and modification had been done online. In February 2013, the State Council approved the setting up of the Kunshan Cross-Strait Industrial Cooperation Test Area. In September 2015, the State Council approved the carrying out of a comprehensive opening-up and innovation test in the Suzhou Industrial Park, the first of its kind in China.
From 2013 to 2017, Hong Kong took the top position with 35.6 percent of total foreign investment, while Taiwan dropped to second place with 14.5 percent. Japan (9.4 percent), Singapore (6.1 percent), European Union (7.63 percent), the US (6 percent) and South Korea (4.3 percent) took the third to seventh positions, and the top seven nations or areas contributed over 80 percent of total investment. The nations along the Belt and Road Initiative set up 384 new projects with registered capital of US$2.18 billion.
The effective use of foreign investment in the past 40 years not only made up for the shortage of funds but also helped attract advanced technologies and professionals at middle and high level and, most important of all, it has played a vital role in industrial system construction, pushing forward reform with market as orientation, the construction of market economy and export-oriented economy. Suzhou has become a leader in the sector for the nation.
Toyota Motor Corp set up its auto part company in Changshu in 2012.
So far investment of more than US$125 billion has been attracted to Suzhou, accounting for around 30 percent of the total in Jiangsu Province and 6.5 percent of the total in China. And currently Suzhou attracts around 20 percent of the total foreign investment of Jiangsu and 5 percent of the nation a year, and there are more than 17,000 foreign-invested companies operating in Suzhou, providing 2.6 million jobs.
About three-thirds of the total foreign investment went to manufacturing by 2017. In the past five years, the investment on service industry accounted for 39 percent of the total. Now foreign investment mainly focuses on in machinery, equipment manufacturing, electronics, automobile and railway facilities, medicine and medical equipment and fine chemicals.
So far, 151 Fortune 500 enterprises from overseas have invested in more than 400 projects in Suzhou, and the actual foreign investment in strategic emerging industries and high-tech projects accounted for 51.2 percent of the total.
All the achievements are contributed to the service of city government for business and its insight on industrial chain, value chain and innovation chain globally.
Apart from opening traditional areas, Suzhou has also opened investment on medical institutions, nursing homes, cross-border e-commerce, inspection and detection and vocational training for foreign investment.
Suzhou authorities plan to take solid steps to facilitate the flexibility and convenience of investment, expanding opening-up and strengthening the protection of legal rights of foreign investment.
