Shaoshan Liu

Opinion | China tech: Wuxi model shows local governments how to drive growth

Wuxi’s evolution from an industrial hub to an epicentre of technological innovation offers other local governments a prime example of how to employ a unique blend of public and private sector integration to promote regional economic development

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Barges traverse the Grand Canal in Wuxi, Jiangsu province, on December 9, 2023. Wuxi’s approach to drawing and promoting hi-tech industries in its evolution from an industrial hub to one of innovation can be an example for other municipal governments in China. Photo: Xinhua

Shaoshan Liu

Published: 8:30pm, 5 Jan 2024

Amid angst over its economic prospects, China has doubled down on its efforts to nurture technological innovation. While the government must make adjustments where its policies have fallen short, it undoubtedly got some things right. Wuxi, in Jiangsu province, is a prime example of how its regional technology policy is working.

Unlike in other countries where distinct boundaries exist between the public and private sectors, China’s municipal governments are deeply entrenched in fostering economic development. And Wuxi’s remarkable growth demonstrates the effectiveness of such government-led initiatives in the technology sector.

The city’s GDP has doubled over the past decade and in 2021, it achieved a significant milestone when its per-capita GDP exceeded that of Beijing, positioning it among the top Chinese cities according to that metric.

Wuxi – historically known for its industrial prowess, especially in textiles – has long been viewed within China as a satellite city to Shanghai and remained relatively unknown to the international community. However, the last decade’s remarkable growth has been propelled by a shift from traditional manufacturing to a focus on the technology sector, with the semiconductor industry playing a pivotal role.

Today, Wuxi is home to more than 600 semiconductor companies, contributing more than 200 billion yuan (US$28.1 billion), accounting for about 15 per cent of the city’s GDP.

The catalyst for Wuxi’s economic metamorphosis was a pivotal event in 2007. That year, Lake Tai suffered a severe cyanobacteria pollution outbreak. This environmental crisis, caused by rapid microorganism growth and industrial pollutants from factories along the lake’s shoreline, garnered widespread attention.