Wuxi is now recognised as one of the birthplaces of modern industry in China and is making the transition from a textile manufacturing base into a high-tech industrial hub. In this article, Rainy Yao from Dezan Shira & Associates takes a closer look at the ‘pearl of Lake Tai’.
In 2013, Wuxi’s gross domestic product (GDP) exceeded RMB 807 billion and grew at an annual rate of nine per cent. The city’s primary industry contributed RMB 14.85 billion and its secondary industry RMB 420.74 billion. The remaining RMB 371.42 billion came from the service sector, which notably accounted for nearly 50 per cent of the city’s GDP thanks to industry restructuring. Tourism, which brought in RMB 113.24 billion (12.3 per cent growth) in 2013, accounted for a major portion of service sector revenue, with close to 70 million foreign and domestic tourists visiting the city last year alone.
For the first time in its history, Wuxi’s GDP per capita exceeded RMB 124,600 (USD 20,400) in 2013—making it the highest-ranked city in Jiangsu Province three years in a row. This represents a doubling in per capita GDP in just five years.
New industries, such as cloud computing and high-end equipment manufacturing, also played a vital role in Wuxi’s economic development, with an industrial output of RMB 807.4 billion (a 14.1 per cent growth). Among these, software and services outsourcing made great advances and grew at an amazing rate of 32 per cent annually.
Wuxi’s main development zones include:
Wuxi New District (WND)
Originally approved in 1992, the WND was upgraded to a national development zone in 1995. It consists of six small development areas including the Wuxi High-tech Development Zone and the Lake Tai International Technology Park. Pillar industries in the zone include precision machinery, electronics, bio-pharmaceuticals, fine chemicals and new materials. Besides manufacturing, the software and outsourcing industries are also rapidly emerging in the WND.
Yixing Industrial Park for Environmental Science & Technology (ES&TP)
Often referred to as the ‘environmental capital’ of China, the ES&TP was established in 1992 as the only zone in China dedicated to the environmental protection industry. Over the past two decades, the ES&TP has cooperated in environmental protection and research and development (R&D) programmes with more than 20 countries and regions, including the United States, Germany and the Netherlands.
Wuxi Huishan Economic Development Zone (HEDZ)
Approved in July 2001 by the Jiangsu provincial government, the HEDZ is an important part of the Shanghai Economic Area with a planned area of 76 square kilometres. Major industries include automobiles and key components, new energy, service outsourcing and science and technology.
Jiangsu Jiangyin Economic Development Zone (JEDZ)
Established in 1992, the JEDZ was approved as a national-level development zone in 2011. The zone mainly focuses on new materials (metals), textiles, IT and machinery manufacturing. To date, 292 foreign companies have set up operations in the JEDZ, 16 of which are among the Fortune 500.
Jiangyin Harbour Economic Development District (HED)
The development and construction of the HED was officially launched in September 2006. Located in the centre of the Yangtze River Delta (YRD), the HED is expected to be an important transport hub connecting the areas to the south and north of the Yangtze River. Major industries include high-tech equipment and engineering services, precision machinery, logistics and new materials.
Yixing Economic & Technology Development Zone (YETDZ)
Newly established in 2013 by the State Council as a national-level development zone, the YETDZ was bestowed the honour of the “most valuable zone” in the YRD region. It features industrial sectors in new energy, optoelectronics, new materials and high-end equipment manufacturing. More than 800 enterprises have been established in the zone in its single year of operations.
The output and export value of the city’s high-tech products ranks sixth among all the cities in China, with close to 1,000 high-tech enterprises established in the city. The city has built a diverse manufacturing system based on five pillar industries:
- Digital information
- Automobile manufacturing
- Textiles and clothes
- New energy and materials
Wuxi is also the cradle of China’s micro-electronics industry. Since 1980, Wuxi has been one of two micro-electronics industrial bases in China. In 2013, the municipal government released the Development Plan for the Micro-electronics Industry (2013-2020), according to which the micro-electronics technology developed in Wuxi is expected to be among the best in the world by 2020. The city has also established a foreign-invested enterprises (FIEs) service centre website in a bid to provide a better service for FIEs.
In addition, the municipal government provides the following preferential policies to foreign investors:
Financial support and subsidies
Eligible scientific talent will be provided with free offices and apartments (each with an area of over 100 square kilometres) for three years. Supporting funds ranging from RMB 1 million to RMB 5 million will be granted to eligible scientific projects according to each project’s total investment.
High-tech enterprises will pay corporate income tax (CIT) at a reduced rate of 15 per cent. Newly-established regional headquarters with a tax revenue of over RMB 10 million will be eligible for a 100 per cent local tax rebate for the first three years, and a 60 per cent rebate for the following three years.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.