Chinanews, Suzhou, Jan. 16 – In the past, Suzhou was honored with the reputation of pacesetter in developing foreign-invested economy in China. However, since 2006 great changes have taken place in Suzhou’s economic structure, with private firms now emerging as the main economic form in Suzhou, outnumbering foreign companies in the city. Some analysts say that in terms of scale, Suzhou’s economy is no longer dominated by foreign companies. Instead, private firms are beginning to play a leading role.

 

During the first eleven months of 2006, total private investment reached 62.80 billion yuan, one billion yuan more than the amount of foreign investment, and an increase of 18.8% over the same period in the previous year or, 6.4 percentage points higher than the national average investment growth rate and 9.9 percentage points higher than the investment growth rate of the three forms of foreign-invested enterprises, namely Sino-foreign joint ventures, cooperative businesses and exclusively foreign-owned enterprises.

 

2006 was a transitional year for Suzhou. During that year, private investment growth rate exceeded the foreign investment growth rate for the first time in history. The property reform taking place in the state-owned enterprises (SOE) attracted lots of private funds and made investments more diversified in Suzhou. SOEs made changes to their business operational modes and as a result, their efficiency was greatly promoted. In the mean time, lots of private enterprises also emerged during the SOE reform. The retreat of SOEs greatly promoted the prosperity of private enterprises. After undergoing structural reform, the competitiveness for these previous SOEs was greatly upgraded. Many private firms have now become leading companies in industrial sectors such as construction, import and export, tourism, and transportation, and many of them were previously state-owned enterprises.