Tale of 3 cities

The deterioration of the domestic and global business environment is resulting in a reshuffle of the major industries in southern Jiangsu province.

Credit controls, increasing production costs and a sluggish global market are corroding the advantages of traditional industries, including textiles, in the province.

According to Suzhou Statistics Bureau, 35.9 percent of the textile enterprises in Suzhou, capital of Jiangsu province, have suffered a combined loss of 430 million yuan during the first quarter of this year. Wuxi Textile and Apparel Council also says that 397 textile enterprises in the first half of 2008 were in the red, accounting for 38.43 percent of the total.

Besides, to reduce environmental pollution and resource consumption, "scientific development" and "Green GDP" have become two buzzwords in southern Jiangsu. This was largely due to years of wastewater and chemical discharges that fed the enormous algae outbreak at Taihu Lake at the end of May 2007, which led to a six-day suspension of running water to the lakeside city of Wuxi, threatening one million residents.

All these elements are leading to a new mix of local economies in southern Jiangsu, with Suzhou, Wuxi and Changzhou - the three major cities in the region at the forefront.

Suzhou: outsourcing services

Suzhou Industrial Park (SIP), with 4 percent of the land and population of Suzhou, accounts for 15 percent of Suzhou's GDP and 30 percent of the import and export value and has attracted 25 percent of the foreign investment into the city.

SIP is well known as a base for outsourcing services.

According to the Economic and Trade Development Bureau of SIP, revenue from outsourcing services in SIP in 2007 exceeded 5 billion yuan, a 67 percent increase compared with the previous year. From January to March, Suzhou made $46.7 million from the outsourcing based on approximately 500 enterprises with staff of 50,000.

SIP now is the only "National Demonstration Base for Outsourcing Services" in China, covering services in software, logistics, accounting and human resources.

Along with the thriving outsourcing services is the shrinkage of high-energy-consuming and high-emissions industries.

In 2007, the production increase of cloth for the textile industry and caustic soda for the chemical industry had dropped by 52.3 and 198.4 percent respectively.

On January 11, the last industrial chimney around the Jinji Lake, a major lake in SIP, collapsed in an explosion. It cost SIP Administrative Committee 70,000 yuan to shut down the polluting plant.

However, there is still a long way to go. "The service industry in SIP only contributes one fourth of the GDP, while the figure in Singapore is three fourths," Gu Yukun, Deputy Director of SIP Administrative Committee, says.

Wuxi: industrial design

Wuxi was the biggest victim of Taihu Lake pollution in 2007, which provided a big stimulus for the city to restructure its industries.

"The algae outbreak is a warning from nature. Those low-end industries with few prospects must be eliminated," Yang Weize, Party secretary of Wuxi, says.

According to "Guidance for Industrial Restructuring of Wuxi" issued by the municipal's Development and Reform Commission at the beginning of 2008, industries including chemical, iron and steel, cement, electroplating, printing and dyeing are now forbidden to develop. Enterprises in these industries that fail to meet emission standards must be eliminated.

In 2007, 503 chemical factories were shut down and another 269 will be closed in 2008.

Wuxi hopes to cut the main emissions by 20 percent in 2010.

Meanwhile, Wuxi is searching for new sources to further economic growth and sees industrial design as a priority.

Wuxi (National) Industrial Design Park was approved by National Ministry of Science and Technology in 2003 as the first industrial design theme park in China. In 2007, the 2.5-sq-km park realized revenue of 20.8 billion yuan and tax revenue of 700 million yuan. The 209 industrial design enterprises with a total 1,800 experts (among which there are 30 with doctor's degrees) include industries such as automobiles, integrated circuits, software and architecture.

During the first six months in 2008, the park has realized revenue of 13.5 billion yuan and tax revenue of 500 million yuan. The two figures are expected to reach 27 billion and 1 billion yuan at the end of the year.

Changzhou: animation industry

The fossils in "China Dinosaur Land" in Changzhou, dating back hundreds of millions of years, have received new vitality thanks to the animation industry.

In September 2007, at the 4th China International Animation and Digital Arts Festival held by Changzhou municipal government in "China Dinosaur Land", about 200 enterprises attended the first trade fair for animation product property rights and signed 31 contracts with a total value of 520 million yuan. During the eight-day festival, nearly 200,000 tourists visited the amusement park.

The festival took place for the second time on September 28.

In 2004, Changzhou took the lead in Jiangsu to establish the "Changzhou National Animation Base". The animation industry is now becoming a new engine for economic growth in Changzhou.

Currently, more than 130 animation enterprises with total registered capital of 500 million yuan have taken root in Changzhou, topping other 30 animation bases in China. Those enterprises have finished 21 cartoons, eight of which have been featured on China Central Television (CCTV) and 11 have entered the market in the United States, France, South Korea, Italy, Spain and Russia.

Changzhou's animation industry has also promoted the upgrade of traditional endeavors such as toy making.

Lack of a domestic brand has long tied the Chinese toy-making industry to the tail of international industrial chains, industry observers say. They say the majority of the toy-making profits have been grabbed by foreign enterprises that own the brands.

On July 31, 2007, Cartoon-Plush Toys Commission organized by Yangzhou Toy Association and Changzhou National Animation Base was founded. They invested 300,000 yuan to establish a Cartoon-Plush Toy Research Center. The Changzhou animation industry is now expected to help the Yangzhou toy-making industry develop Chinese brands.

Besides toys, more than a hundred related products including books, stationery and clothes have now been developed based on 10 cartoons.

(China Daily 10/06/2008 page10)