12.2007

Major Economic Indicators

Notes: ¹ In real terms ² For all state-owned enterprises and other forms with annual sales over RMB 5 million
Sources: Suzhou Statistical Yearbook 2007, Suzhou Statistical Bureau

Background

Suzhou is the largest economy in the Jiangsu Province, accounting for 22.4% of the province's GDP in 2006. Suzhou has an area of 8,488 sq.km and population of 6.16 million at the end of 2006. The Suzhou municipality consists of five cities -- Changshu, Zhangjiagang, Kunshan, Wujiang and Taicang.

"Southern Jiangsu economic model" has been used to describe the development of three municipalities in Jiangsu -- Suzhou, Wuxi and Changzhou. The model generally referred to the economic development in the 70s and 80s with the growth of township enterprises and collective enterprises. However, the model has already been changed and Suzhou has evolved to become an externally oriented economy. Nowadays, foreign investment and international trade are playing an important role in Suzhou's economy. For example, exports equalled to 156% of Suzhou's GDP (61% in 1997) while FIEs accounted for 90% of the city's exports in 2006 (68% in 1997).

Over the years in the 90s, Suzhou has adjusted its development strategy, leveraging on its state level development zones (Suzhou Industrial Park, Suzhou Hi-tech Development Zone, Zhangjiagang Bonded Zone, Kunshan Hi-tech Development 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, UMC, Macronix, Foxconn, GSMC, Samsung, Hitachi, Phillips) forming the so called "silicon corridor".

Suzhou is now embarking upon two major strategic directions: to build the city as the "leading destination of FDI", and the "base for new and high-tech industries."

Economic Structure

Among the gross industrial output of enterprises of designated size (annual sales above Rmb 5 million), the share of state-owned enterprises and collective-owned enterprises dropped from 59.5% in 1997 to 1.0% in 2006. The share of foreign invested companies (FIEs) increased from 46.2% in 1997 to 66.6% in 2006. Private enterprises accounted for 16.2% in 2006 while almost 0.0% in 1997.

Foreign invested enterprises are now one of the major forces of Suzhou's industrial output. In 2006, the gross industrial output of FIEs above designated size reached RMB835 billion, representing an increase of 53 times from 1997, while Suzhou's total gross industrial output increased 37 times for the same period.

The number of private enterprises increased from 81,989 in 2004 to 109,398 in 2006. In 2006, fixed assets investment by private and sole proprietor companies reached RMB67.2 billion, increased by 15.8% and accounted for 31.9% of Suzhou's total fixed assets investment. In 2006, private companies are mainly engaged in manufacturing sector (about 47%).

Industry Structure

Suzhou has the largest gross industrial output in Jiangsu province, accounting for about 30.3% of the province's total industrial output in 2006.

Composition of GDP (%)

Source: Suzhou Statistical Yearbook 2007

The industrial base of Suzhou is rather broad, producing a wide range of products both in heavy and light industries. The ratio of heavy to light industries was 67% to 33% in 2006.

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, bio-technology and medicine, chemicals and household electrical appliances have now become the six pillar industries of Suzhou.

Output Share of Leading Industry Groups (2006)

Source: Suzhou Statistical Yearbook 2007

The gross industrial output of new and high-tech products reached RMB402 billion, accounted for 32.1% of the gross industrial output in 2006, up from 19.5% in 1997.

Suzhou has also built a number of renowned brands in consumer goods, such as Goodbaby (children's bicycle), Bosideng (garment), Chunhua (electrical appliance) and Menglan (bedding).

Tourism

Suzhou is a famous tourist destination and it accounted for 26.9% of Jiangsu's total foreign exchange income generated from tourism in 2006.

Source: Suzhou Statistical Yearbook 2007

Foreign trade

Suzhou is the largest export base of Jiangsu and the percentage share has continued to increase in recent years, partly reflecting the healthy industrial development and rising external orientation of Suzhou. In 2006, Suzhou accounted for 59% of Jiangsu's total exports, compared to 41% in 2000.

Suzhou is exporting to more than 140 countries or economies. The US is the leading export market accounting for 25.7% of the city's exports in 2006. Other major markets include Japan and Hong Kong. Exports to Hong Kong reached US$9,771 million in 2006.

In 2006, machinery and electronic products accounted for 81% of total exports. Suzhou's exports of new and hi-tech products accounted for 59% of the province's total and 20% of China's exports in new and hi-tech products.

Major sources of imports included Taiwan, Japan and South Korea. Imports from Hong Kong reached US$667 million in 2006.

Foreign Direct Investment

Currently, there are over ten thousand foreign enterprises operating in Suzhou. Among the world's top 500 multinational companies, 113 of them already have presence in Suzhou, and more than 30 have set up R&D centres in Suzhou.

Up to 2006, the cumulative utilised FDI reached US$36.7 billion, accounting for 31% of Jiangsu's total. Investments in the industrial sector accounted for 88% of the cumulative contracted FDI.

FDI in Suzhou

Source: Suzhou Statistical Yearbook 1998, 2003, 2007

There are 5 state level economic development zones and 12 provincial level development zones in Suzhou. In 2006, these development zones accounted for 75% and 90% respectively of the city's total contracted and utilised foreign investment.

The leading foreign investors are from Hong Kong, Taiwan, Singapore, the US and Japan. However, it should be noted that, many Taiwan investment have been channelled indirectly through a third places and might have been classified under Hong Kong or Virgin Islands.

Contracted FDI by Source

Source: Suzhou Statistical Yearbook 2007

Consumer Market

In 2006, the total retail sales value increased by 16.6% to RMB106 billion. Annual per capita disposal income of urban households reached RMB18,532 (+13.9%).

Composition of Per Capita Expenditure of Urban Household (%)

Source: Suzhou Statistical Yearbook 2007

Suzhou is also a trading and distribution centre having over 500 commodity markets for both consumer goods and industrial goods. By the end of 2006, there were 64 commodity exchange markets with annual sale over RMB100 million, whose total transaction reached RMB130 billion (+19.9%), accounting for 22% of Jiangsu's total transaction of markets in this category.