Research on Regional Technical Innovation and Old City’s Development
through Suzhou’s Practice
Xiao-ran Hu 1, Cheng-yang Xie2, Chi Wang3
1
Columbia College, Columbia University, New York, USA
School of Economics and Management, Southeast University, Nanjing, China;
(xiaoran_hu_2012@yeah.net)
2
School of Economics and Management, Southeast University, Nanjing, China
(xiechengyang@yahoo.cn)
3
School of Foreign Languages, Southeast University, Nanjing, China
(wangchi_seu@126.com)
Abstract - It seems difficult to balance economic
development and historic city preservation. However,
Suzhou has shown a success in its attempt to achieve
sustainable development. This thesis analyzes the practice of
Suzhou in the three aspects: industry division, commuting
and Chinese culture, aiming to cast light on the sustainable
development of cities in China and even around the world.
Keywords
- regional innovation; sustainable
development; industry division and cooperation
I. INTRODUCTION
Problems such as land limitation, pollution,
congestion and so forth are inevitable during the
development of a city. Literatures concerning urbaniztion
problems have demonstrated two different approaches to
addressing these issues, namely building out and building
up. Though these two measures have apparently identical
results, their essences differ totally and trigger different
problems.
Building out, or suburbanization, once a trend in the
US after World War II, is now widely adopted in many
developed cities in China. It stresses the growth of areas
on the fringes of major cities and has been discussed
intensively in many aspects (Bertinelli and Black, 2004;
Sato and Yamamoto, 2005; Chen and Gao, 2011) [1] [2] [3].
Through suburbanization, the function of the whole city is
divided into two parts: working and dwelling. The
residents of a metropolis working in downtown usually
choose to live in suburbs and commute to work by
automobile or public transport.
Building up means that to build more skyscrapers in
downtown to accomodate more immigrants. To some
economists, building up is a more effective way than
building out to deal with urban problems, for an
abundance of closely connected vertical buildings can
decrease the pressure on roads, cut the expenditure of
long commuting and promote the communication between
neighbors. For instance, in his new book “Triumph of the
City” a Harvard economist Edward Glaeser argues that
tall buildings are greener than sprawl, and they foster
social capital and creativity. He also quotes both positive
____________________
Work in this paper is supported by National Science
Foundation of China (Project No. 70873019)
and negative cases, including Hong Kong, Singapore,
Mumbai and Paris, to support his view.
Supporters of building up highlight the importance
of compact and green buildings to social innovation and
sustained development [4], while proponents of building
out point out that high building will decrease the quality
of life, which is increasingly crucial to attract valuable
innovative residents. They argue by contrast that
development of sub-centers helps to capture benefits from
knowledge spillovers and offsets diminishing returns from
urban congestion, thus stimulating more sustainable urban
growth (Berliant and Wang, 2008) [5].
Both views seem rational and have their own
limitations. To this day there is still no consensus over
this debate. However, one certain thing is that, while the
two sides argue from economists’ points of view, some
issues such as historic preservation which is usually
associated with height limit are hardly isolated economic
problem but also pivotal to cities’ sustainable
development. Taking into account these additional noneconomic factors, we find that problems become more
complex and it seems not easy to find a balance among all
these issues. However, as development today is a process
of experimentation and learning in particular context,
Suzhou, one of the most ancient and prosperous cities in
China, has found a way, according to its own features, to
shed light on this conundrum. In the rest of this thesis, the
case of Suzhou’s practice will be analyzed in order to
reveal how it has achieved this success and provide some
inspirations for other cities’ development heading down a
more sustainable path.
II. SUZHOU’S SUCCESS
Renowned for its rich cultural heritages and
prosperous economy, Suzhou city, which is located in the
south of Jiangsu province, is one of the most developed
cities in China.
Suzhou’s development has a direct correlation with
the growth of its satellite cities. It is the steady integration
development between central area and outskirt districts
that has created Suzhou’s remarkable achievements both
in economy and historic protection. Among the satellite
cities, Suzhou Industrial Park (SIP) is undoubtedly the
most representative one. In the following chapters, we
will take SIP as an example to elaborate on the interaction
between the old and new cities in Suzhou.
A. Sustainability
Indeed, it seems difficult to balance the demand of
providing additional desirable space and the need to
preserve a green and historic city in the process of
industrialization. However, by means of building satellite
cities around the downtown, the Suzhou Municipal
Government has successfully eased the pressure of
increasing cost, pollution and congestions during the
process of industrialization while keeping pristine taste of
historic Suzhou.
Nowadays, the characteristics of quaint streets,
classic gardens and waterways in old downtown are still
well preserved, while over hundreds of square miles of
green space have been opened up in the satellite cities.
Meanwhile, environment-friendly industries in satellite
cities are encouraged by Suzhou Municipal Government.
Thus they can provide more green products and service to
guarantee its sustainable development, and in one of its
satellite cities an "environmental business incubator,"
consisting of 50 small R&D firms, has been set up.
Thanks to its perfect balance between preserving the
ancient and building the modern, Suzhou stood out in the
World Expo 2010 Shanghai, and we can see that Suzhou
has found a sustainable path for the city’s development in
the long run.
B. Innovation and Economic Development
Since China adopted its reform and opening-up
policy, the city has become a textbook case of China's
rapid and lucrative expansion to the world: in 2011, the
city's Gross Domestic Product (GDP) has risen to RMB
916.89 billion, ranking 6th among all the cities in China. It
is undoubted that Suzhou is the second largest industrial
city in the Yangtze River Delta, only behind Shanghai.
Meanwhile, innovation activities in Suzhou,
especially in the new city SIP, are in full swing. We use
the number of patents to reflect the innovation fruits in
Suzhou and get figure 1 as below:
reasonable one and has been widely adopted in many
studies on innovation (Acs et al., 2002; Jaffe et al., 1993;
Lee et al., 2004) [6] [7] [8]. According to figure 1, innovative
activities represented by patent counts have multiplied
almost 10 times from 2001 to 2010.
C. Housing Price
Although the height limit on buildings has been
carried out for more than two decades, housing price in
Suzhou has hiked slowly compared to its income increase,
and the situation as Glaeser described: “a thorny problem
of skyrocketing rent and housing price” has never
occurred.
To support the point above, we choose Wenzhou,
another costal city, to make a comparison. There are many
similarities between Wenzhou and Suzhou in their
economic development. For example, they are both the
hot places for foreign investment and their development
both started from OEM. Therefore, these similarities
ensure that this comparison makes sense.
Fig.2. Comparison of housing price and disposable income between
Wenzhou & Suzhou
Figure 2 exhibits the changes of housing price and
disposal income in Suzhou vs. Wenzhou. It can be clearly
seen that, though both of them have had a thriving and
robust economic development in recent 5 years, the
growth in housing price of Suzhou is much slower and
more stable than that in Wenzhou.
III. TWO CITIES IN SUZHOU
Fig.1. Number of patent applications and approvals in recent 10 years
Source: Suzhou Science and Technology Statistical Yearbook
2011, with time series spliced together by authors.
The left bars represent the number of patent
applications in each year while the right bars show the
number of the approved ones. Patents might not reflect all
the activities of innovation, because not all commercially
valuable new ideas are patented. However, it is a
A. Old City
The old city here refers to the urban core of Suzhou
which covers an area of 90 square kilometers, and the
history of the old city can be tracked back to 2500 years
ago. Being the cradle of Wu Culture, the old city has rich
cultural heritages, and its unique characteristics are
always attached with the “classical gardens, winding
streets and bridges, simple black, gray and white
architectures”. Besides that, since the Song Dynasty (9601279), it has always been an important center of China's
silk industry.
Since the adoption of the reform and opening-up
policy, Suzhou, benefiting from its advantage of location,
has gained the favor of foreign investments, and the old
city witnessed a rapid expansion of manufacturing
industries during the 1990s. However, accompanying the
city's booming economy, some urban problems like
congestion, pollution and land intension followed and
snowballed. This ambitious city, nevertheless, was not
going to destroy its past in order to meet the future.
Therefore, a series of policies aiming to preserve its
culture relics and sites were gradually implemented, the
seven-story height limit on buildings being one of them.
Thanks to its adherence to these policies, till today, the
old city still preserves its unique landscape of “small
bridge, flowing water, white wall, black tile, cultural
relics and classic gardens” that contribute to its status as
one of the top tourist attractions in China.
B. New City: SIP
The one we call new city is China-Singapore Suzhou
Industrial Park (SIP), which is located in the east of the
old downtown with an initial area of 80 sq. km in 1994
and then enlarged to 288 sq. km. As an important
economic cooperation project between Chinese and
Singapore government, the new city is aimed not only to
accomodate more immigrants but also to push Suzhou’s
economy and innovation to a new height.
Compared with that in the old city, transportation in
the new city is more diverse and convenient. Thanks to its
wise site selection, the new city can be connected to
domestic and foreign metropolis easily via welldeveloped network of highways, railways, waterways, and
airlines. Under the guideline of Singapore government, all
the infrastructures inside the new city are constructed
according to high-standard of “9 utilities and leveled
land”. Besides that, investment policies implemented
within the new city, including tariff reduction and
exemption, provide investors preferential treatments that
would be unequaled elsewhere.
Due to all these advantages above, the new city
rapidly attracted attentions of foreign manufacturing
giants and became a hot area of investment during the
1990s. It was the manufacturing industry which later
became SIP’s leading industry, and helped to form the
financial base for the new city’s further development.
At the beginning of the new century, China entered a
new stage of development that focused on transformation
and upgrading. To coordinate with this main rhythm and
to enhance its competitiveness worldwide, Suzhou
Municipal Government began to put stress on innovation.
It is absolutely true that innovative activity is not
necessarily performed by scientists or engineers, but the
group of people is most likely to do the same. Being
aware of the importance of talent pooling, Suzhou
embarked on attracting prestigious universities from both
home and abroad to locate their branch campus in a
specific district within the new city, which later became
the well-known Suzhou Dushu Lake Science and
Education Innovation District and has contributed a lot to
both old and new cities’ development.
Nowadays, innovation activities within SIP are in
full swing. Besides the innovation district above, another
5 key areas which perform different but complementary
functions have been erected to ensure smooth and
independent running of the new city.
In addition, the new city has bred its own lifestyle
labeled with fashion, innovation and vigor, and is
attracting more and more young talents worldwide to
flock in and strive to realize their dreams, thus making
Suzhou become oriental Silicon Valley.
IV. LINKAGES BETWEEN THE TWO CITIES
A. Industry Division and Cooperation
As described above, the leading industry within the
new city is still manufacturing, which includes IT and
machinery production. They are currently being
vigorously motivated toward high-end and scale
development. Meanwhile, supported by the government,
the emerging industries inside SIP are thriving in recent
years and they include nanotechnologies, optical new
energy, bio-pharmaceutical, converged communications,
software, animation & game, environmental protection.
The latest data issued by Suzhou Bureau of Statistics
indicate that in 2010, the output value of emerging
industries in SIP is RMB 147.2 billion, accounting for
45.4% of scale industries. Besides that, modern service
industries such as finance and logistics have set their first
steps.
For old city, it seemed impossible to make any
progress because of its’ limited space and narrow streets
due to the policies to preserve its original style. However,
another economic opportunity emerged: after a threedecade persistent economic growth, the domestic spiritual
and cultural demands were growing. Meanwhile, China’s
miraculous rise and wealth of culture deposits began to
attract a growing number of international tourists to set
their foot on this wondering land. Suzhou, as one of the
most typical Chinese ancient cities south of the Yangtze
River, would definitely be an important tourist attraction.
With awareness of this trend, based on natural endowment,
the development of old city was oriented to tourism and
traditional commerce like silk and embroidery by Suzhou
Municipal Government. The orientation was undoubtedly
correct and the fruits from tourism can be shown on the
table below: from 2000 to 2010 earnings from domestic
tourists have almost tripled while foreign exchange
earnings of tourism have multipled six times.
TABLE 1Tourism in Suzhou
2000
2005
2010
Foreign exchange
earnings of tourism 20135 63905 125059
(USD 10000)
Earnings from
domestic tourists
380.28 772.79 917.76
(100 million Yuan)
Source: Suzhou Statistical Yearbook 2011
Figure 3 depicts the industrial division between two
cities:
instead of living and working in different places and
commuting every day, residents of Suzhou can enjoy the
convenience of combinating two places into one and
needn’t travel distantly. If it is needed, they can visit their
friends or relatives living in another city on weekends. In
this way, pressure on the roads that connect the two cities
can be mitigated to a large extent and congestions rarely
happen.
Fig.3. Industry Divisions between Two Cities
Source: Suzhou Bureau of Statistics, with time series spliced together by
authors.
The line with “▲” shows the portion of the output
value from the secondary industry in regional GDP of old
city. By comparison, the ratio of the output value from the
tertiary industry to regional GDP of old city is shown by
line with“×”. In the same figure, bars are used to present
the scale of the secondary industry in SIP and the tertiary
industry in the old city respectively. It can be seen that
after a slight rise in 2004, the portion of secondary
industry in old city declined constantly while the ratio of
tertiary industry gained a persistent increase after 2004 by
contrast. That phenomenon corresponds well with the
development orientation for the old city which was made
by the Suzhou Municipal Government. Meanwhile, as to
the new city, we can see a rapid and continuous expansion
of the scale of the secondary industry.
The underlying industrial linkages between two
cities seem like that: Through attracting foreign tourists to
the old city, Suzhou gained the opportunity to present
itself worldwide. Meanwhile, when the inventors of
tourists see the comprehensive infrastructures, advanced
communication networks as well as unequaled
preferential policies in SIP, they would possibly make an
investment decision. In addition, the development of
cultural and innovation industries helps to expose the
ancient city to the nation and the world as well. Just like
what had happened in Japan, being influenced by its
favorite movies or animations, tourists would be drawn to
the city of the films’ origin.
B. Commuting and Transportation
Transportation, as a big problem that affects the
residents’ choice of working and living place, has been
widely discussed in existing literatures, varying from
commuting cost ( Ommeren and Fosgerau, 2009; Sorek,
2009) [9] [10] to commuting time( Ommeren and Rietveld,
2005) [11] and to commuting distance( Clark Y. Huang&
Withers, 2003) [12] [13].
However, in the case of Suzhou, problems of
commuting and transportation do not matter that much.
As mentioned above, the new city is positioned not least
as a dwelling place, but as a comprehensive living area,
which has its own industry, shopping and service districts,
acting as a perfect complement to the old city. Hence,
C. Life style, Chinese tradition and others
In the former chapter, we have discussed the industry
division and transport between these two cities. Then,
besides that, is there any other underlying connection
between these two cities? This question leads us to further
think the culture and lifestyles in both cities as well as
Chinese tradition.
We start our discussion from the discrepancy of
residents between the two cities.
Because of the well preserved culture relics, cultural
atmosphere of ancient China is ubiquitous in the old city,
which makes it appear peaceful and elegant. Aged people
prefer to live in old downtown, partially because they
have lived there for a long time and got used to the life
patterns there. Furthermore, the circumstance in old city
such as close neighborhood and tranquility is more
attractive to elders. On the other hand, atmosphere in new
city, as we have discussed earlier, is permeated with
innovation and vigor and thus more likely to be accepted
by young people. Besides, the constantly expanding
industries in SIP are providing more and more
challenging but desirable jobs to young immigrants.
Therefore, besides industry division, we can see a distinct
living division between the two cities.
Now, let’s come back to the Chinese family
tradition. Different from western countries, Chinese
parents keep supporting their children from both aspects
of material and spirit even after they are 18 years old.
When young couples have a baby, they are used to getting
help from their parents to take the care, so that they can be
released to concentrate on their work. However, while the
babies grow up and can take care of themselves, normally
after primary school, they would leave their grandparents
and come back to live with their parents.
The education resource distribution in Suzhou adapts
to this Chinese family tradition pretty well. Primary
schools in Suzhou are concentrated in the old city to meet
the kids’ need while Dushu Lake Sci-Edu Innovation Park
offers adequate resources for youth’s demand for
advanced education in the new city. The latest statistics
suggests that the Park has housed 18 colleges of domestic
and international prestigious universities. Its strategic
cooperation with high educational institutions is still
stretching.
The two cities share the talent pool together. People
living in different cities usually have a family union on
weekends and knowledge spillover can be generated from
that. It is partially because of the effect of knowledge
spillover, development and innovation of both sides can
be stimulated.
V. CONCLUSION
Though changing is the only immutable thing in the
world today and there cannot be a pattern of development
that can be applied in any context, we can still gain many
inspirations from Suzhou’s practice.
The relative independence of the two cities might be
the most pivotal element of Suzhou’s success. Firstly, for
both cities have bred their own distinct lifestyles and set
up complete systems of living and working, residents
don’t have to commute any more. As a result, the traffic
pressure between two cities is greatly mitigated and the
transport expenditure hugely reduced. Secondly, as the
increasing complexity of innovation calls for more and
more
collaborations
between
individuals,
the
concentration of innovative talents in the new city enables
individuals within the region to approach and
communicate with each other much easier, and therefore
boost their sense of cooperation. Thirdly, the unique
living pattern in the old city can be preserved completely,
which makes the ancient old town more fascinating to the
tourists.
The case also shows that government, like what it
always does in China, has played an important role in the
process of promoting function positioning and smooth
connection of the two cities.
In the end, traditions, culture and other covert factors
could not be ignored. On the contrary, they should be
carefully considered while we make a long-term plan for a
city’s sustainable development.
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