Changzhou’s Colorful Economic Mosaic

By HAN LI & GAO YAN

Fan Yanqing, secretary of the Changzhou CPC Municipal Committee at the opening ceremony of the Changzhou Sci-Tech and Trade Talks 2005.	Mayor Wang Weicheng (second left) at the San Jose talks last March.	Education Minister Zhou Ji visits the Changzhou vocational education base.

The Yangtze River Delta is a powerhouse that has propelled China’s rapid economic growth over the past years. There are 16 major cities driving the dynamic area forward, and Changzhou in Jiangsu Province is one of them. The city has in recent years modernized, industrialized, and formed clusters of various vibrant industries. Changzhou’s current “economic mosaic” (a newly coined term that describes industrial conglomerations that create the greater part of regional wealth) is composed of several specialized industrial districts that are devoted to structurally optimized industries and related links, including rail transport vehicles and accessories; new paints and coatings; new materials; and pharmaceuticals, pesticides and veterinary medicine. These characteristic conglomerations provide an ideal investment environment that has attracted many Chinese and overseas investors, and have also given us a good reason to take a closer look at this ancient city.

Facts and Figures

Once known as the “City of the Dragon,” Changzhou has a recorded history of 2,500 years. Today it administers two county-level cities, Jintan and Liyang, and the five districts of Wujin, Xinbei, Tianning, Zhonglou and Qishuyan. It covers a total of 4,375 square kilometers and has a population of 3.489 million people.

A large conurbation has formed between Changzhou, Suzhou and Wuxi, while the bustling cities of Shanghai and Nanjing lie to its east and west respectively, each an hour’s drive away on the Shanghai-Nanjing Expressway. Apart from Changzhou’s well-developed roads and railways, highlighted by the Shanghai-Nanjing Railway and Expressway and National Highway 312, Changzhou also boasts convenient river transport, as it is girdled by the Yangtze River to the north and Lake Tai to the south and traversed by the Grand Canal. As a national Category-I open port, Changzhou handles an annual cargo throughput of more than 5 million tons. It is linked by air to more than 20 large and medium-sized Chinese cities, such as Beijing, Guangzhou, Dalian, Xiamen, Shenzhen, Haikou and Xi’an.

Changzhou is among the top 50 Chinese cities in terms of its comprehensive economic strength and in the top 40 as far as its investment environment is concerned. It is also a model city for implementing sustainable economic development based on environmentally friendly policies and has received the China Human Settlements Environment Paradigm Award. In 2005 its GDP stood at RMB 130.22 billion, with fiscal revenue of RMB 22 billion, and per capita GDP of US $4,500.

By the end of 2005, more than 5,000 investors from 96 countries and regions had utilized in Changzhou an investment of US $4.7 billion out of a contracted total of US $11.54 billion, including 600 projects whose investment will each exceed US $10 million when completed. Of the world’s top 500 companies, 38 have set up shop in Changzhou, including the U.S.’s General Electric, Germany’s Bosch, France’s Violia, and ROK’s Hyundai.

An Investment Magnet

In December 2005 the Changzhou Municipal Bureau of Foreign Trade and Economic Cooperation carried out a survey among those 38 investors to find out why they decided to come to Changzhou. Their main reasons included: Changzhou’s rich historic and humanistic heritage; pleasant living environment, daily conveniences, respect for different customs and conventions and perennially congenial climate; solid industrial foundation, industrial diversity, good legal environment and government efficiency; and geographical advantages and low logistics costs. Director Li Xiaoping of the bureau added on top of that a rich resource of skilled workers and the municipal government’s dedication to protecting intellectual property rights.

Changzhou’s industrial structure has been “conglomerated” after years of efforts in attracting investment to form specialized industrial districts. In 2005 its rail transport vehicle and accessory industry realized an output value of RMB 16.3 billion, an increase of 29.36 percent over the previous year. An outstanding performer was the Changzhou Railcar Propulsion Engineering Research and Development Center (CPC), which that year generated turnover of RMB 2 billion. Wujin’s new materials base houses nearly 100 enterprises that produce new fabrics, special metal materials, fine chemicals and nanometer materials. In 2005 their combined revenue amounted to RMB 18 billion. The Jiangsu Yuanyu Electronics Group Company (YEC), also headquartered in Wujin, exports 95 percent of its products to overseas markets, including Europe, the U.S. and Japan. It operates an electric-acoustics research center in the United States, and has remained among China’s top 100 electronic components enterprises for nine years running.

Meanwhile, the municipal government has launched a “green Changzhou” and an “ecological Changzhou” campaign in order to create a congenial living environment for its residents and build Changzhou into a pleasant garden city. It has also tried to upgrade infrastructure and environment protection in order to improve its investment environment. In 2006 the city earmarked RMB 17 billion for key municipal projects concerning transportation, environmental protection, and public facilities. The largest of the projects is the 3.06-sq.-km Lu’anzhou Harbor District, which broke ground this year. When completed in 2020, Changzhou will have ten docks, rather than its present two, with a total handling capacity of 20 million tons.

A lack of skilled workers has been a problem for manufacturing cities along the Chinese coast in recent years. The Changzhou University Town in the southeastern part of the city is a modern higher vocational education base in China. It is a model for universities that train “silver collars.” Inside the town are no less than five higher vocational educational institutions and one university. As they are all adjoined, they act as a holistic entity located harmoniously among beautiful surroundings. In addition to sharing sports, cultural and commercial facilities and the International Exchange Center, the six schools also share educational resources. Their students can choose courses offered by any of the schools in the town, as their grade credits are recognized by all of them, and one school’s professors can also teach in another school. Currently the school town has 18,000 students, and eager employers have jobs lines up for them all. When the entire project is completed, the student population will increase to 60,000 to meet the manpower needs of manufacturers in the Delta area.

According to an index survey conducted by the Urban Household Survey Team under the National Bureau of Statistics, Changzhou ranks first among the 16 Delta cities in terms of infrastructure, environmental protection and the recyclable economy; and third in social development.

Changzhou Dinosaur Park.	The Changzhou section of the Shanghai-Nanjing Expressway.	Excavator production line operated by Japan’s Komatsu, one of the world’s top 500 companies.

Two Economic Wings

Changzhou’s economic development zones (EDZ) have become the driving force behind the city’s rapid economic growth since their construction began in 1992. Today, Changzhou has one national-level and nine provincial-level EDZs and 15 township industrial districts. By the end of 2005, the ten EDZs had expanded to occupy 82 square kilometers, invested accumulatively RMB 22.5 billion in infrastructure, and attracted an agreed investment of US $9.18 billion, US $3.24 billion of which had actually been utilized.

The development of the EDZ economy over the past decade has launched Changzhou’s urban construction and development and helped form the city’s northern- and southern-wing export-oriented economic mode.

The 139.16-sq-km Changzhou High and New Technology Industrial Development Zone lines the southern bank of the Yangtze River in the northern part of the city. It is a national-level EDZ founded in 1992. The zone incorporates a chemical, an electronic, an aviation and a South Korean industrial park, as well as a national-level environmental protection industrial park. It also has an enterprise park for returned overseas students and another for private entrepreneurs. Nearly 100 businesses from Europe, America, Japan, South Korea, as well as China’s Hong Kong and Taiwan have moved into these parks. They are mainly engaged in chemicals, environmental protection, electronic information, software and new materials. The zone has been evaluated by the Ministry of Science and Technology and the Jiangsu Provincial People’s Government as an “advanced national-level industrial incubator service institution.” Cultural and social development has progressed in tandem with economic development within the zone, which features luxurious residential areas, a 4A tourist area and the China Dinosaur Park.

The 3,000-year-old Wujin District was among China’s first group of counties/districts to open up to the outside world. It became a “pilot of modern agriculture for southern Jiangsu,” and has been honored as “China’s star county,” one of China’s top ten counties in terms of its comprehensive strength, and one of the country’s first group of moderately prosperous counties. It has developed electronic information, mechatronics, new materials, bio-pharmaceuticals, environmental protection, and energy-efficient technology as well as its core industries of textiles, machinery and chemicals. With the completion of five expressways that cut through it, Wujin has entered the fast track of economic development.

The Wujin High and New Technology Industrial Development Zone is crucial to the district’s economic growth. Founded in 1996, the zone now incorporates several industrial clusters that specialize mainly in office electrics, new materials and logistics. It houses 79 enterprises with annual revenues exceeding RMB 20 million, with 23 of those topping RMB 100 million. The northern and southern high and new technology zones are like two wings that have propelled Changzhou’s economic takeoff.

Scenic Destination

As prescribed by the latest development plans for the Delta area, the Nanjing-Hangzhou urban belt has developed rapidly, following closely behind the already affluent Shanghai-Nanjing and Shanghai-Hangzhou urban belts. Changzhou’s Liyang is a main knot on the third belt. The Liyang Overall Urban Planning (2005-2020) has set the goals of becoming a “new tourist and holidaymaking destination in the Yangtze River Delta” and a “commercial and trade hub and distribution center at the juncture of Jiangsu, Zhejiang and Anhui.”

Liyang’s ambition originates from its beautiful landscape. Its Tianmu Lake has the misty magnitude of Lake Tai, the natural elegance of the West Lake and the kaleidoscopic beauty of the Thousand-Island Lake. It is credited as an “ecological origin” and a “holidaymakers’ paradise.” The South Mountain Bamboo Sea, which is 18 kilometers from the Tianmu Lake Scenic Area, extends for thousands of hectares over rolling mountainsides. Wild flowers strew both sides of the mountain road, attracting flocks of butterflies, while two lush peaks flank a mirror-like lake.

Construction of the Tianmu Lake Tourism and Holiday Resort, which comprises both the lake and the bamboo sea, started in 1992. It received provincial status in 1994, and in 2001 was designated as a national 4A tourist area by the National Tourism Administration and a national water conservancy scenic area by the Ministry of Water Resources. Today it has developed more than 30 scenic sites. The zone aims to be the dream garden of the Delta cities.

Government in Action

Immediately after the 2006 Spring Festival vacation came to an end, the Changzhou municipal government started a new round of investment promotions. On February 21 it hosted the first of 16 investment promotion programs for the year at the Shanghai International Convention Center. Two days later, the “Investing in Changzhou for Common Progress” meeting took place at Beijing’s International Hotel. On March 20, the China Changzhou-US San Jose bilateral investment and trade talks were convened in San Jose, and in the following two weeks the Changzhou economic and trade delegation traveled to Los Angeles and Washington.

At the “Integrating with Shanghai and Building a New Changzhou” conference on February 21 in Shanghai, Secretary Fan Yanqing of the Changzhou CPC Municipal Committee encouraged prospective investors to go and see Changzhou for themselves. He made the following commitments: to increase input in the construction and management of the city’s infrastructure and human settlement environment; to continue upgrading its investment environment and establishing a top-notch legal, administrative and credit system; to develop Changzhou into a dynamic and competitive city by legal and administrative means; and to learn from and keep up with Shanghai. Parts of Changzhou have already earned their status as a holidaymakers’ paradise – the rest is destined to become a heaven for investors.