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2019-11-22 | Nanjing

European Chamber Report Encourages Nanjing to Play to its Strengths

Nanjing, 22nd November 2019 The European Union Chamber of Commerce in China (European Chamber) today released the Nanjing Position Paper 2019/2020, its second local paper presenting the concerns, assessments and recommendations of European Chamber members doing business in the region. The report focusses on ways that European companies can work with the local government to upgrade the regulatory environment, attract more talent to the region and improve conditions for small and medium-sized enterprises (SMEs), to ensure the Nanjing area reaches its full potential.

In recent years, the municipal government has opted to try and drive development in a wide range of industries. Instead of playing to its strengths, like its strong industrial foundation, and specialise in specific emerging sectors, Nanjing has tried to outcompete other cities by spending large sums of money in areas, such as the tech-startup economy, where they do not have a competitive advantage. The report recommends that instead, Nanjing focusses on attracting business in fields where other cities in the region currently do not have a competitive advantage, building on their good foundation for doing business. This approach can further be strengthened by industrial upgrading, moving away from the subsidy-heavy approach and fostering competition.  

As an example of an area where Nanjing could grasp a competitive advantage, the Nanjing Chapter believes the city is well placed to become China’s centre for SMEs. While large investments made by big multinational companies (MNCs) can provide a sudden boost to growth and employment, there are fewer and fewer such opportunities, with many already having a presence either in Nanjing or other parts of Jiangsu. By focussing instead on attracting SMEs, both foreign and regional—which on aggregate have much higher growth potential than MNCs, and also foster innovation—Nanjing could tap into a valuable source of sustainable development.

The Nanjing Position Paper 2019/2020 presents key recommendations that will assist the local authorities in this endeavour. The Nanjing Chapter believes that this city has the potential to flourish using the innovative strengths of SMEs and using the addition of competitive elements to Nanjing’s already strong industrial foundation. This would be best achieved through positive regulatory reforms that make it easier to do business, a shift in Nanjing’s development model and the establishment of a Nanjing SME Park.

“Nanjing has the foundation to overcome challenges like the impacts from slowing global demands, however it can only do so if it follows a strategy that plays to the strengths of the local economy and could lead to a competitive advantage within China,” said Bernhard Weber, chair of the European Chamber’s Nanjing Chapter. “This report is not just about creating a good business environment for our companies to thrive in, it is also about fostering the long-term development of the city we, as European businesspeople, call home.”

Download the paper here.

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Si Chen

Betty Feng