A bird's eye view of Zhangjiagang Free Trade Zone. Provided to China Daily

Dow Corning (Zhangjiagang) Co Ltd chooses Zhangjiagang for its convenient location. Provided to China Daily

 

A small city founded 25 years ago is making its mark on the map with help from the logistics industry

When Shu Hui recalls his job transfer in 2000 from Beijing to Zhangjiagang, a city in East China's Jiangsu province, he says it was a choice that needed a lot of determination and courage.

"None of my friends could understand why I was doing it, because Zhangjiagang lagged a long way behind Beijing then, in economic development and living standards. There was not even a supermarket in the city at the time," says the general manager of Dow Chemical Zhangjiagang Co Ltd.

After living and working in the city for more than 10 years, Shu says it was the right move to make, not only for him but for Dow Chemical, one of the world's largest chemical products manufacturers.

According to the company's annual report, its sales grew 12 percent to $60 billion (45.8 billion euros) last year, of which $10.5 billion came from the Asia-Pacific market.

Peter Sykes, president of the company in Greater China, says that up to 43 percent of sales in the Asia-Pacific region last year were in China, the second-largest international market for the company.

With Zhangjiagang's excellent location, efficient infrastructure and logistics network and forward-looking leadership, it has played a vital role in Dow Chemical's expansion in China, Shu says.

Dow Chemical's Zhangjiagang base, set up in 2000 as its largest manufacturing site in China, had turnover of 2 billion yuan ($319 million; 246 million euros) last year, making it a key production base for many high-end products, such as epoxy resin, which is used in plastics and adhesives.

"Zhangjiagang has had tremendous success in the past 10 years, especially in logistics, which is continuing to drive our company's development, Shu, 37, says.

"What we have achieved since launching here proves that coming here was the right choice."

Dow Chemical's rapid development in Zhangjiagang has gone hand in hand with the city's efforts to develop itself into a modern international logistics and freight center.

Located on the southern bank of the lower reaches of the Yangtze River, Zhangjiagang has enjoyed phenomenal economic growth since it was founded in 1986.

Named after Zhangjiagang Port, one of the important freshwater trade ports along the Yangtze River, the city covers about 1,000 square kilometers and has a population of 900,000. Last year its per capita GDP was $33,000, on par with developed countries such as Portugal.

Zhangjiagang is now seeking new growth engines, including logistics, as the country grapples with the challenges posed by sluggish foreign trade.

According to local government figures, exports rose 2.2 percent to $8.38 billion in August year-on-year, while imports fell 0.8 percent to $13.45 billion.

Zhangjiagang is not alone with its problems, says Tao Fengde, deputy director of the city's service industry development office.

"With rising labor costs and a sluggish market, companies need to move to the higher end of the value chain if they want to make more profit. It's the same with a city. That's why we are making huge efforts to boost our logistics industry."

Those efforts are helped in no small way by the Yanjiang Expressway, Wuxi-Zhangjiagang Expressway and the 204 Highway, which run through the city, helping it form what has been branded a "one-hour traffic network" to Shanghai, Nanjing, Suzhou and Wuxi in the heart of the Yangtze River Delta area, one of the country's most developed regions.

It has abundant port resources. Along the banks of the Yangtze River, stretching over 72 kilometers, there are 112 berths, of which 65 have handling capacity of more than 10,000 metric tons.