Bordering Shanghai in South China's Jiangsu province, the city of Kunshan continues to register rapid growth through foreign investment, industry restructuring and a thriving service sector.

Revenues in its service industry hit 90 billion yuan ($13.8 billion) last year, up 22.4 percent from 2010, while foreign direct investment surged 45.4 percent to 646 million yuan.

Taxes paid by service companies totaled 11.43 billion yuan in 2011, an increase of 22.2 percent over the previous year.

The Kunshan government has focused on the service sector in its strategy to achieve a well-balanced industrial structure.

The financial sector, a pivotal segment in the industry, took the lead last year with a 9.7 billion yuan increase in revenues, up 25 percent over 2010.

Last year, 70 equity investment funds with about 30 billion yuan under management began operations in Kunshan.

Eight small loan companies serving the rural market have also been established.

The logistics industry also grew in 2011, with revenues rising by 22.9 percent to 8.7 billion yuan.

Particular efforts have been made to foster modern logistics, with 31 A-class companies in the sector set up last year.

Business process outsourcing also thrived as financial services outsourcing became a rising star.

Last year, the city government began a number of initiatives to expand the range of financial outsourcing services and stimulate new forms of BPO.

Revenue from domestic outsourcing grew 60.8 percent and offshore outsourcing reached $129 million.

The government also introduced a range of preferential policies to encourage enterprises to locate their headquarters in Kunshan.

Some 56 enterprises headquartered in Kunshan enjoy privileges from the policies, 30 of them new arrivals last year. Total registered capital of companies headquartered in the city reached 9.55 billion yuan by the end of 2011.

Industry parks

Industry parks in the city have played a big part in shoring up overall development.

The Huaqiao International Service Business Park, a national demonstration zone for BPO and a center for high-tech services, has become a hotspot for modern services companies.

In 2011, 20 famous outsourcing enterprises set up operations in the park as company revenues increased by a combined 6.7 billion yuan.

The Kunshan Comprehensive Free Trade Zone, a home to logistics and manufacturing companies, welcomed 31 new companies last year.

The park offered bonded logistics services for 440 billion yuan worth of cargo in 2011, which generated transport and handling revenues totaling 640 million yuan.

The Kunshan Software Park has a variety of companies whose businesses range from e-commerce and design to gaming, animation, and video and audio services.

The resident companies generated 780 million yuan in sales revenue in total. Some 47 new companies began operations in the park last year.

Another park, the Kunshan Tourism and Holiday Zone, brings in most of the city's tourism revenue.

With about 17 million tourists from home and abroad in 2011, the zone, generated 18 billion yuan in revenue.

Together the city's four large industry parks will continue to be a driving force for growth, said city officials, adding that special effort has been made to reduce institutional obstacles and provide a more favorable environment for service enterprises.

Govt efficiency

Kunshan officials said government efficiency has been significantly improved in recent years, with both online and on-site options to process documents and approvals.

Service companies in particular are provided with quick and efficient services without the usual red tape.

The time needed for on-site processing fell by 14.4 percent at the same time the efficiency of online applications rose by 8 percent.

The government has also changed how it evaluates its performance. Targets were made more specific and differentiated for each administrative unit.

Adding to the attraction for service companies are more venues to raise capital.

As well, several investment seminars were organized including the 2011 Kunshan Modern Services Industry Investment Seminar that saw agreements on 31 projects worth 9.5 billion yuan signed.

zhoufurong@chinadaily.com.cn

(China Daily 03/29/2012 page17)