Eliza Wong
Southern Jiangsu’s Strategic Expansion in National Reform Agenda
The State Council’s recent approval of the Comprehensive Reform Pilot Program for Factor Market Allocation in Selected Regions has positioned Southern Jiangsu’s key cities among China’s ten designated pilot zones. This development signals a significant shift in regional economic policy that could reshape investment patterns and industrial coordination across the Yangtze River Delta region.
What makes this announcement particularly noteworthy is the inclusion of not just the traditional Southern Jiangsu powerhouses—Suzhou, Wuxi, and Changzhou—but also the provincial capital Nanjing and the often-overlooked city of Zhenjiang. This expanded configuration represents a deliberate strategy to create a more integrated economic corridor along the Yangtze River’s southern bank.
Historical Context and Evolving Definitions
The concept of Southern Jiangsu (苏南) first emerged in Fei Xiaotong’s (费孝通) 1983 work Small Towns: Further Exploration, referring initially to the economic development model pioneered by Suzhou, Wuxi, and Changzhou during the 1980s. However, as Song Linfei (宋林飞), former director of the Jiangsu Provincial Government Counsellors’ Office and director of Changzhou University’s Southern Jiangsu Modernization Research Institute, explains: The Southern Jiangsu model was never meant to be a rigid framework limited to three cities. It represents evolving regional development experiences rooted in cultural connections and close economic exchanges.
Official statistical recognition evolved gradually. The 1997 Jiangsu Statistical Yearbook first divided the province into Southern Jiangsu, Central Jiangsu, and Northern Jiangsu, with Nanjing and Zhenjiang initially classified as Central Jiangsu. Only in 2001 were both cities officially reclassified into the Southern Jiangsu category, a designation reinforced by subsequent national policies including the 2013 Southern Jiangsu Modernization Demonstration Zone Plan and the 2014 Southern Jiangsu National Innovation Demonstration Zone.
Economic Implications of the Expanded Southern Jiangsu Framework
The inclusion of all five cities—Nanjing, Zhenjiang, Changzhou, Wuxi, and Suzhou—creates a more comprehensive economic corridor with complementary strengths. Four of these cities belong to China’s elite trillion-yuan GDP club, while all five rank among the nation’s top ten in per capita GDP. This concentration of economic power represents one of China’s most productive regional ecosystems.
Zeng Gang (曾刚),终身教授 and director of East China Normal University’s Urban Development Institute, emphasizes that this expansion isn’t merely administrative: The Greater Southern Jiangsu concept represents an organic whole sharing interconnected transportation networks along the Yangtze River and Lake Tai basins. These five cities have been deeply interconnected throughout history, collectively forming the core of the Jiangnan cultural identity with high recognition in literature, art, garden architecture, and culinary traditions.
Addressing Regional Imbalances
Zhenjiang’s inclusion raises particular interest given its smaller economic footprint. With 2024 GDP of 554.001 billion yuan, it significantly trails its four counterparts and ranks near the bottom within Jiangsu province. Some observers have questioned whether this indicates a middle segment weakness in the Southern Jiangsu corridor.
However, experts counter that Zhenjiang maintains strengths that complement rather than weaken the regional economy. Its per capita GDP remains above the national average, and it has developed specialized industries in high-end equipment manufacturing, new materials, and aerospace sectors without experiencing industrial hollowing out.
Critically, Zhenjiang occupies a strategic position at the convergence point between the Nanjing metropolitan circle and the Su-Zhang-Chang metropolitan circle. With its deep-water Yangtze River port and multiple high-speed rail connections, the city possesses natural advantages for承接产业外溢 (industrial spillover承接) and logistics hub development. Through regional division of labor and industrial complementarity, Zhenjiang can develop synergies with its more powerful neighbors.
Infrastructure Integration: Hard and Soft Connectivity
Transportation interconnectedness remains crucial for enabling factor mobility. Southern Jiangsu represents one of China’s most economically developed regions and also pioneered transportation infrastructure development. The Shanghai-Nanjing Expressway, opened in late 1996, was Jiangsu’s first major infrastructure project and was predicted to become China’s most economically beneficial highway. Its significance lay in connecting nearly all national-level development zones across the five Southern Jiangsu cities.
The high-speed rail era has further strengthened intercity connectivity. The Shanghai-Nanjing intercity railway and Beijing-Shanghai high-speed rail have been complemented by the September 2023 opening of the Shanghai-Nanjing Yangtze River high-speed rail, which connects county-level cities including Jurong, Jintan, Wujin, Jiangyin, Zhangjiagang, Changshu, and Taicang—effectively activating the regional毛细血管 (capillaries).
Beyond Physical Infrastructure
While hard infrastructure has advanced significantly, softer integration among the five cities has progressed more slowly. Even within the traditional Suzhou-Wuxi-Changzhou triangle, integration faces challenges despite their similar economic development levels and complete industrial systems. These similarities have sometimes led to industrial homogenization and competition outweighing cooperation.
Additionally, as Zeng Gang notes, Southern Jiangsu suffers from a lack of clear regional leadership and insufficient centripetal force. This absence of a dominant central city is reflected in the evolution of metropolitan area designations. When Jiangsu initially planned three metropolitan areas in the new century—Nanjing, Xuzhou, and Suzhou—experts including Song Linfei suggested revising Suzhou metropolitan area to Su-Zhang-Chang metropolitan area to avoid privileging one city over others with comparable development levels. This recommendation was adopted, creating a multi-core metropolitan model that has become a new paradigm for coastal city cluster development in China.
Industrial Coordination and Cluster Development
After more than two decades of the Su-Zhang-Chang metropolitan concept, industrial layout is gradually shifting from competition toward cooperation. Examining their 14th Five-Year Plan industry规划 (plans) reveals both individually prioritized industries and refined layouts that seek resonance with neighboring cities.
– Suzhou emphasizes innovative drug研发 (R&D), complementing Wuxi’s biomedical outsourcing capabilities
– Wuxi leverages its integrated circuit manufacturing advantages to support chip design, manufacturing, and smart connected vehicle industries across all three cities
– Changzhou builds on its power battery and photovoltaic module industries to support new energy transformation throughout the region
This represents a deliberate differentiation strategy: Wuxi focuses on photoelectronics while Changzhou specializes in lithium batteries. Through chain integration, base support, and cluster leadership, Suzhou, Wuxi, and Changzhou are gradually forming cluster-based collaborative development in new energy vehicles, integrated circuit specialized equipment, intelligent manufacturing equipment, and biomedicine.
The Linear Agglomeration Model and Innovation Corridors
Zooming out to the five-city perspective, Zeng Gang analyzes how Suzhou, Wuxi, and Changzhou constitute world-renowned manufacturing bases while Nanjing offers significant科教资源 (education and scientific research resources). Together they form a complete innovation chain from basic research through technology development, achievement transformation, and industrial manufacturing.
Zhenjiang plays more than a spectator role in this ecosystem. It can connect with Nanjing’s universities and research institutions to develop scientific achievement transformation bases while collaborating with Suzhou and Wuxi to build industrial chains—for example, providing supporting materials and equipment manufacturing for biomedicine, thereby alleviating land resource constraints in the more developed cities.
Such exploration actually began earlier. The 2014 State Council approval establishing the Southern Jiangsu National Innovation Demonstration Zone included eight high-tech industrial development zones and Suzhou Industrial Park across Nanjing, Suzhou, Wuxi, Changzhou, Kunshan, Jiangyin, Wujin, and Zhenjiang. The goal was to jointly create advanced manufacturing集聚区 (agglomeration zones), industry-education-research integration demonstration zones, future industry cultivation areas, and nationally influential innovation source highlands.
The Corridor Development Advantage
As Song Linfei observes, what distinguishes Southern Jiangsu’s innovation zone is its linear rather than point-like structure. While Beijing’s Zhongguancun, Wuhan’s East Lake, and Shanghai’s Zhangjiang national innovation demonstration zones follow concentrated point models, Southern Jiangsu’s adopts a带状 (belt-type) or corridor approach.
This corridor model represents not just the innovation zone’s structure but Southern Jiangsu’s broader spatial organization pattern. As China advances its national unified market development and regional cooperation enters deeper coordination stages, linear agglomeration spatial organization models are becoming increasingly prevalent.
Transportation corridors connect innovative nodes including cities, parks, universities, and research institutions along their routes. This approach preserves scale economy advantages from highly concentrated innovation factors while avoiding problems associated with single-center excessive aggregation—traffic congestion, environmental pollution, and high business costs.
Zeng Gang points out that the five Southern Jiangsu cities essentially form a massive urban and industrial corridor along the Shanghai-Nanjing axis. As one of China’s most dense and efficient transportation corridors, this axis breaks through individual city boundaries, enabling talent, capital, technology, and information to flow and optimize allocation across a broader范围 (scope). Essentially, it transforms isolated cities into a unified market with complete infrastructure, enormous market scale, and high-quality labor forces.
Strategic Significance and Future Outlook
Promoting factor market allocation reform in Southern Jiangsu and breaking administrative barriers carries significant regional and national strategic value. Internally, it aims to create the core engine and golden axis of the Yangtze River Delta world-class city cluster, optimize resource allocation, and achieve common prosperity and balanced development. Externally, it responds to new global competition patterns by building self-controlled modern industrial systems and constructing strategic hubs for domestic and international dual circulation.
In this process, Southern Jiangsu’s experimental field will provide demonstration samples for nationwide regional integration institutional innovation. The successful implementation of factor market reforms could establish new paradigms for intercity cooperation, infrastructure sharing, and industrial complementarity that other regions might emulate.
For international investors, this development signals enhanced opportunities in one of China’s most dynamic economic corridors. The deliberate policy push toward greater integration suggests reduced administrative friction, improved factor mobility, and more efficient resource allocation across the five cities. Companies with presence in multiple Southern Jiangsu cities may benefit from streamlined operations, while sectors aligned with regional priorities—advanced manufacturing, biotechnology, new energy, and integrated circuits—stand to gain particular advantage.
The Southern Jiangsu golden axis represents not just a transportation corridor but an evolving economic ecosystem with profound implications for China’s development model. As reform implementation progresses, market participants should monitor policy developments, infrastructure investments, and cross-border collaboration initiatives that signal the region’s continuing transformation into a more integrated and efficient economic zone.
