On December 3rd, 2016, “2016 (Fourth) Forum on Sustainable Development of Industrial Parks in China” was held in China Financial Information Center in Lujiazui, Shanghai. Professor Ren Hao from Tongji SEM made a keynote speech on the annual report on the sustainable development of industrial parks in China in the following three aspects: the eight trends of the sustainable development indexes of industrial parks in China, the contents, effects and measures of the soft environment construction of industrial parks in China, and the four ways to find a new direction for the development of industrial parks. The following is an edited script of the speech.

Good afternoon, my distinguished guests. First, let me extend my sincere thanks to the two leaders for their addresses. On December 3rd every year, it seems like an annual exam for all of the research teams. We try our best to finish a yearly assignment, and whether we have done a good job and how our blue books will be graded all depend on the evaluation of all of you who are present in the meeting today. My report today is mainly composed of three aspects: firstly, we will make an index analysis of the data in 2015 so as to describe the trend of industrial parks in China in the past year; secondly, we will, based on the analysis, make an evaluation of the industrial parks as a whole; thirdly, we will make some suggestions for the future.

1.Eight Trends of the Sustainable Development Indexes of Industrial Parks in China

In 2015, there were 519 national industrial parks in China, among which 365 national economic development zones and hi-tech zones had a total output value amounting to 15.8269 trillion yuan, accounting for 23.29% of GDP in China, paid taxes of 2.73015 trillion yuan, accounting for 21.86% of all the taxes in China, and earned foreign exchange of 5.6457 trillion yuan through exports, accounting for 39.93% of that in China. According to the analysis of the development in three successive years, national industrial parks have been playing a more and more important role in the economy in China. The top 100 industrial parks, accounting for almost 20% of all the industrial parks, have an economic index volume up to 80% of that in all the national industrial parks, in accordance with the Pareto Principle. Therefore, we make an evaluation and analysis of the top 100 industrial parks which amount to 20% in number and 80% in GDP among all the industrial parks in China.

Just now we briefly and seriously introduced the list of the top 100 industrial parks in China in 2016. Now I will make a report on the analysis and evaluation of the development index of the top 100 industrial parks this year.

(1)Changes occurred in the steady development of the top 100 industrial parks, whose comprehensive scores slightly decreased.

In terms of number, 78 industrial parks were in the top 100 in four successive years, with the rate of change being 22%; 15 industrial parks were in the top 20 in four successive years, with the rate of change being 25%; 7 industrial parks were among the top 10 in four successive years, with the rate of change being 30%. In terms of comprehensive scores, the average comprehensive score of the top 100 industrial parks was 0.3054 in 2015, with a decrease of 5.07% and 0.23% compared with those in 2013 and 2014 respectively. The major reason for the decrease of comprehensive scores in the latest three years was the decrease of the average score for the economic development index, while the changes in the indexes of innovative development, industrial cooperation, public service and social development were relatively small.

(2)The industrial parks in the eastern regions continually predominated in number, and those in the central and western regions accelerated their development. The distribution of industrial parks in different provinces and regions are polarized.

In 2015, there were 64 top 100 industrial parks in the eastern regions, continually predominating in number; Chengdu Hi-tech Zone in the western area was enlisted among the top 10 industrial parks for the first time and became the first top 10 industrial park from the western area.
In 2015, up to 50% of the top 100 industrial parks were located in Jiangsu, Shandong, Guangdong, Zhejiang and Liaoning. Jiangsu, Fujian, Shanxi, Yunnan and Chongqing had more top 100 industrial parks in 2015 than in 2014. The number of top 100 industrial parks in Jiangsu increased for four successive years, up to 19 in 2015.

Figure 1: The number of top 100 industrial parks in different provinces and regions from 2013 to 2015

(3)Among the top 100 industrial parks, 50 are hi-tech zones and 50 are economic development zones, with hi-tech zones having stronger potential for development.

In 2015, the average score of the economic development zones among the top 100 decreased from 0.2999 to 0.2995, while the average score of the hi-tech zones among the top 100 increased from 0.3087 to 0.3113. Among the top 10, the percentage of hi-tech zones to economic development zones was 4:6 in 2013, 5:5 in 2014 and 6:4 in 2015, showing that hi-tech zones have stronger potential for development. Among the new 32 national industrial parks in 2015, 31 were hi-tech zones, showing that hi-tech zones were expanding increasingly fast.

(4)The average score of the economic development index of the top 100 industrial parks is decreasing dramatically.

Influenced by the economic downturn in China, the economic indexes such as GDP, total export, taxes of the top 100 industrial parks increased slowly and the development of industrial parks is showing a new normal. The average score of the top 100 industrial parks decreased by 10.82%, with that of hi-tech zones decreasing by 11.4% and that of economic development zones, by 9.98%. In 2014, the average score of the top 100 industrial parks, the hi-tech zones among the top 100, and the economic development zones among the top 100 decreased by 14.23%, 3.22%, and 23.18% respectively.

Figure 2: Total exports of the top 100 industrial parks from 2013 to 2015

Figure 3: Tax revenue of the top 100industrial parks from 2013 to 2015

(5)The average score of the innovative development index of the top 100 industrial parks is on the rise.

The directors attach more and more importance to the innovative development of industrial parks, realizing that innovation is the fundamental driving force of the transformation, upgrading and sustainable development of industrial parks. In 2015, the average score of the innovative development of the top 100 industrial parks increased by 5.94%, with that of hi-tech zones increasing by 17.08% and that of economic development zones, 9.76%.

(6)The average score of the industrial cooperation index of the top 100 industrial parks increased slightly.

Along with the increasing importance attached by the directors to the industrial planning and industrial development of the industrial parks, there was a reverse in the score of industrial cooperation of the industrial parks. In 2015, the score of the industrial cooperation of the top 100 industrial parks increased by 0.71%, though it decreased by 27.87% in 2014.

(7)The average score of the public service index of the top 100 industrial parks is not good enough.

There are still problems with the public service in the industrial parks. Compared with that in 2014, the average score of the public service of the top 100 industrial parks decreased by 0.85% in 2015, indicating that the management of the industrial parks still needs to be improved. In addition, the underlying reason for the decline of the public service in the industrial parks still needs further investigation.

(8)The average score of the social development index of the top 100 industrial parks is on the rise.

The average score of the social development index of the top 100 industrial parks is increasing slightly. In 2015, it increased by 2.70%, with that of hi-tech zones increasing by 3.99% and that of economic development zones, 1.55%. This indicates that the integrated development of industries and cities is greatly valued in industrial parks. Industrial parks have strong inner driving force, but still needs further support of the macroeconomic policy.

2.Background, Contents, Effects, and Measures of the Soft Environment Construction of industrial Parks in China

(1) Background of the soft environment construction of industrial parks

First, the economic growth is slow and the economic development of many industrial parks declines.

In 2015 and 2016, the economy in China is experiencing a downturn, investment dramatically declining, land cost largely increasing, substantial economy giving way to fictitious economy, so the economic development of industrial parks is declining. The various policies of subsidies, tax reimbursements and favorable land policies in different regions are similar, so the industrial parks lack effective policies to reverse the situation.

Second, the system is not active, with the management system of most industrial parks being rigid.

For one thing, the level of management committee and the governmental jurisdiction is experiencing a downward shift, and the authority of management committee is narrowing. For another, the mechanism and methods of the management committee to manage and run the industrial parks don’t suit the leading role of industrial parks in the market competition.

Third, with more and more functions, industrial parks shoulder more social responsibilities.

With the continuous expansion of national industrial parks, industrial parks need to fulfill functions of life development and social development, apart from the functions of economic development and industrial development, which presents new requirements for the development and management abilities of the industrial parks.

Fourth, with well-equipped facilities, the hard infrastructure construction of national industrial parks has basically finished.

Now most of the national industrial parks have already been facilitated with municipal roads, rain and sewage treatment, running water, natural gas, electricity, telecommunication, heating, and cable TV, and finished the hard infrastructure construction, with a smooth natural look of land.

(2) Content of soft environment of industrial parks: supporting industries, park intelligence, life services and park culture

The soft environment is the sum of the necessary and improving conditions provided for indirect production and direct life in industrial parks. It is composed of two elements: functions and effects. The functions include the function of production and the function of life, while the effects include the necessary effect and the improving effect. The function of production mainly means that there should be a horizontal production service chain and a vertical supply chain, which is beneficial to the industrial agglomeration of the industrial parks; the function of life mainly means the function of providing premium education resources, health care, green ecology, Culture, and convenient communication, etc., which is helpful to the service development of industrial parks. Necessary effects refer to the infrastructure construction that helps to improving indirect production and life service; improving effects refer to providing better intelligent environment and cultural environment for industrial parks, which pushes the industrial parks to a higher level.

Through the two-dimensional method, we can divide the soft environment of industrial parks into four aspects: supporting industries, park intelligence, life service, and park culture.

Figure 4: Two-dimensional system of the content of the soft environment in industrial parks

(3) Effects of the soft environment of industrial parks: driving force, cohesiveness, attraction

The soft environment, as a new driving force for the sustainable development of industrial parks, is mainly reflected in the three aspects of driving force, internal cohesiveness, and external attraction.

First, soft environment is a driving force to enable industrial parks to shoulder new strategic missions.

In recent years, our country has posed some new strategic missions on industrial parks, such as developing independent innovative demonstration areas, eco-industrial parks, and One Belt, One Road etc. New strategic missions are the important parts of the soft environment construction of industrial parks. The construction of high-quality soft environment helps industrial parks to shoulder new strategic missions.

Second, the soft environment is the cohesiveness to reinforce the internal industrial agglomeration of industrial parks.

Complete industrial supporting facilities can bring about various effects of agglomeration economies such as the sharing of infrastructure and resources, the decline of comprehensive transaction costs, the innovative environment for technology spillover, etc.; the development of an intelligent industrial park can bring back into active use all the service carriers and resources of the whole industrial park, and integrate all the cross-industry, cross-discipline, and cross-section resources related to the industrial park so as to improve the agglomeration function of the industrial park.

Third, the soft environment is the attraction to promote the external competitiveness of the industrial parks.

Life service can fulfill people’s basic needs of an environment that is suitable for their life and work, which is closely related to the happiness of businesses in the industrial parks and greatly determines the attraction of the industrial park to businesses, being the source of advantage for industrial parks in diversified competition; a green ecological environment can promote the economic development of the industrial parks, attract investment and talents to the industrial parks so as to bring about favorable environmental effects; the park culture can enhance the knowledge communication and knowledge spillover effect among the innovative subjects, helping to increase the attraction of industrial upgrading and innovative development for businesses.

(4) Measures to improve the soft environment of industrial parks

Industrial Support

Industrial support refers to the related industrial conditions needed for the development of industrial parks, including the practical needs of the leading industries and leading businesses in the region, and the upstream and downstream support related to the production, operation and sale of businesses. It is mainly composed of industrial chain support, investment and financing support, human resources support, logistic support, research and development support. Industrial support is an important prerequisite for the development of leading industries in the industrial parks and an important way to lower the transaction and logistic costs and promote the competitiveness of businesses in the industrial parks.

The present industrial support, in my opinion, has the following problems: various segments of the industrial chain are not closely correlated to one another, the service system for investment and financing is not good enough, the service for human resources management needs improvement, and the development of the research and development support is relatively slow.

Therefore, we’d like to propose the following measures.

We can integrate industrial support into the development plan of the industrial parks. In the industrial upgrading, businesses in the industrial parks can, via industrial convergence, extend and expand industrial chains, build the industrial smiling curve of the industrial parks so as to promote the competitiveness of the industrial chains in the industrial parks.

Now most agencies and service systems are not good enough, in order to enhance coordination and cooperation, we can establish industrial support coordinators in the industrial parks so as to support and serve the local businesses, foreign businesses and large businesses.

We can improve the development of internal support, which refers to the support of related industrial chains and the support of industrial transfer based on the advantage of industries and resources.

We can improve the development of external support, including services of information, banks, insurance, human resources, logistics, research and development, etc.

Park Intelligence

Park intelligence refers to the establishment of a new sustainable model of advanced infrastructure facilities, highly efficient management service, high-level innovative environment through means of interconnection, intelligence, platform, and integration on the basis of modern information technology such as Internet of Things, Cloud Computing, etc. The current development of intelligent industrial parks has the following features. First, there have been a number of intelligent industrial parks. Among the 219 economic development zones and 146 high-tech zones in China, 44 economic development zones and 45 high-tech zones have been pushing forward the development of intelligent industrial parks, accounting for 20% and 30% respectively. Secondly, information infrastructure facilities and e-government take priority as the focus of the development. The industrial parks in developed areas such as Shanghai and Hangzhou have begun to pay attention to the interactive development between intelligence and industries and the further integration of intelligence and urban management. Third, it is pushed forward by both the national and local government. In 2014, Shanghai put forward the first local standard for intelligent industrial parks in China Specifications for the Construction and Management of Intelligent Industrial Parks and related Guidelines for the Construction of Intelligent Industrial Parks in Shanghai (for trial implementation). Up until November 2016, the pilot intelligent cities declared by Ministry of Housing and Urban-Rural Development had covered 23 national intelligent industrial parks under construction. In November 22nd, 2016, National Development and Reform Commission, Office of the Central Leading Group for Cyberspace Affairs, Standardization Administration of the People’s Republic of China jointly released Evaluating Indicators of New-type Intelligent Cities. The importance of intelligent industrial parks lies in that they provide highly efficient driving force of service and innovation for enterprises, provide considerate and accurate services for residents in the industrial parks, and provide scientific policies and accurate management for the government.

The main problems confronting intelligent industrial parks are as follows. Firstly, intelligent industrial parks are still in their infancy. The construction of infrastructure facilities, management and service of industrial parks are still in a state of disunity, without an effect of coordination and intensiveness so that the informative and industrial integration is sill not enough. Secondly, there exists regional imbalance of the development of intelligent industrial parks. The eastern areas take the lead because they have more favorable conditions than the central and western areas in terms of location and transportation, urban economic development, preferential policies, etc.

Here we want to make a suggestion about the measures: promoting the construction of informative infrastructure facilities; providing enterprise-oriented one-stop service; providing professional service for enterprises in industrial parks; establishing an intelligent supporting system for industrial chains; developing a mature business model.

Life Service

Life service refers to the public supporting system provided by industrial parks for enterprises and individuals in the industrial parks. It is mainly composed of education, sporting, health care, service sector for life, ecological development, etc. Now 108 industrial parks have got the permission for developing national exemplary eco-industrial parks, among which 45 national eco-industrial parks have been approved. The importance of life service lies in that life service determines to a great extent the attraction of an industrial park to enterprises and employees, which helps to improve the soft power of the industrial park, and a good life service can increase the attraction of industrial parks to talents, being an important factor in talent competition of enterprises in the industrial park.

The major problems of life service in industrial parks are as follows. The resources of education, sporting and health care cannot satisfy the needs of the residents; the suppliers are unitary; the number of resources is relatively small; the quality of resources is not high. The life service sector develops relatively slowly and has a weak foundation; multilevel diversified life service system hasn’t formed yet; the policies and incentives for the development of eco-industrial parks are not good enough.

We propose the measures to solve these problems in the following two aspects. For one thing, we can push forward the development of social undertakings. We should improve market service system and public culture development, increase the multilevel coverage of education and accelerate modernization of education, build an atmosphere of sports in high-tech zones and promote the rapid development of sports, improve health care service system and the healthy living standard of residents. For another, we can build a modern industrial park that is suitable for both living and working. We should improve the supporting facilities of commercial networks of all living quarters and communities, enhance the development planning of life service sector with the priority of developing urban commercial complexes, find new resources of ecotourism and upgrade the level of leisure life in industrial parks, and innovatively develop “internet plus life service industry” and develop a new diversified industry model.

Park Culture

Park culture refers to the innovative and humanistic culture patterns that fit the industries of industrial parks built in a long-term practice by all members. It mainly consists of cultural infrastructure development and cultural content development. Its importance is as follows. First, the cultural development in industrial parks helps to integrate various resources so as to promote the development of industrial agglomeration, which is beneficial to the establishment of cultural development platforms. Secondly, it can promote the old city transformation and push forward the optimization and upgrading of the industrial structure. Thirdly, it can promote the development of local cultural products so as to promote the development of local economy by leaps and bounds. The problems of industrial park culture are increasingly obvious. The building of industrial park culture hasn’t been paid enough attention, the cultural atmosphere of innovation and entrepreneurship is not strong enough, and relatively there is no people-oriented culture.

We think that we can solve these problems through increasing cultural education facilities, pushing forward the development of people-oriented culture in industrial parks and build an atmosphere of innovation and entrepreneurship.

3. Four Ways to Find a New Direction for the Development of Industrial Parks

Under the circumstances of an external economic downturn and an internal rigid system and mechanism, what is the future of industrial parks? I believe that we can try to find a new direction for the development of industrial parks by searching for a new role, a new vision, new diving force, and a new route.

(1) Searching for a New Role

Economic development zones should clearly know their own roles. The role, I think, means a long-term role of the economic development zones and the dislocation development of development zones. I have paid a visit or given lectures to 80% of national industrial parks, where I have heard two different voices: economic development zones are temporary fixes or they will exist for a long time. In my opinion, economic development zones will exist for a long time. Firstly, when we started to build economic development zones, we decided to make them a growth pole for regional economic growth. This function will last for a long time. Secondly, the essential feature of modern industries is industrial agglomeration, and economic development zone model is an important form of industrial agglomeration. Finally, China’s development cannot go without manufacturing industry, and economic development zones are important platforms for the development of the manufacturing industry. This is the first role of economic development zones. The second is the dislocation development of economic development zones. I think that every industrial park should have its own aim. For example, how can we make a dislocation development of economic development zones and high-tech zones? How can we make a dislocation development of the industrial parks in the eastern, central, and western areas in China? And how can we make a dislocation development of the deep level and the superficial level of the same industry?

(2) Searching for a New Vision

What should be the aim and vision of the long-term development of economic development zones? We used to consider more the industrial and economic function of our economic development zones. In the future, actually, the vision of our industrial parks should be composed of three kinds of ecology. The first one is industrial ecology, without which economic development zones cannot sustain. Industrial ecology needs not only enterprises but also industrial chains and corresponding supporting service. The second one is environmental ecology, which was also mentioned in the meeting next door. Certainly, by environmental ecology we don’t just mean the environment or the air, but we should also consider the development of recycling economy and the construction of green industrial parks. The third one is social ecology. Industrial parks should serve for enterprises, but enterprises are people after all, so industrial parks should serve for people. This is what I call social ecology, which consists of culture, education, health care, etc. In the past, industrial parks are small and located in the suburbs, so they can satisfy their own needs depending on the social function of cities. However, the present industrial parks are totally different. Many industrial parks cover an area of more than 100 square kilometers; in such a large space, we must provide the social function for enterprises and employees in various aspects.

(3) Searching for New Driving Force

What is the driving force for the development of economic development zones? In 2014, the 30th anniversary of the founding of economic development zones, we began to consider a classification of industrial park model from the perspective of driving force for industrial parks. What is the driving force for the development of economic development zones? In 2014, the 30th anniversary of the founding of economic development zones, we began to consider a classification of industrial park model from the perspective of driving force for industrial parks. In 2014, Tongji University Institute of Development made a summary of the development of economic development zones in the past 30 years and put forward the industrial park development model 1.0, which included three elements. The first is policy. Industrial parks could get favorable resources through policies of land, finance and tax, talents, etc. The second is administration. Industrial parks have a lot of administrative functions, which can collect a lot of public resources. The third is hard infrastructure. Industrial park 1.0 has led the development of industrial parks for 30 years, but what will be the driving force for the development in the next 30 years? Therefore, we put forward the industrial park 2.0, which consists of system, integration, and soft environment, and we should try to shift industrial park 1.0 to industrial park 2.0. Firstly, policies should change into a system, which I won’t detail. Secondly, administration should change into integration. Now many people think that industrial parks are just used to accumulate industries; however, industrial agglomeration is not a physical agglomeration, not the accumulation of industries; more importantly, we should transform physical agglomeration into chemical agglomeration so that enterprises in the industrial parks cooperate with one another, generating new outcomes and added value. Finally, hard infrastructure should change into soft environment; that is, we should expand the space of industrial parks from physical space to cyberspace so as to fulfill the new requirements of industrial parks, such as intelligence, cultural atmosphere, and green ecology, etc. Certainly, it doesn’t mean that we don’t need policies, administration, or hard infrastructure, but they are supplement, improvement and optimization of industrial park 1.0.

(4) Searching for a New Route

What is the developing route of economic development zones? Attracting investment used to be the focus of the development of industrial parks, with all the industries developing in a disorderly way. In my opinion, the development of industrial parks should be orderly in the following three aspects. The first is concentration. We should make clear leading industries in each industrial park and leading enterprises in the leading industries. The second is aggregation of chains. Industrial parks should not only attract industries of the same quality but also build industrial chains for them. The industrial chain should have horizontal productive service chains as well as upstream and downstream supply chains, and only the combination of the two chains can strengthen the adhesion and development capacity of enterprises in industrial parks. The third is aggregation of networks, including productive network, knowledge network, and social network, etc. so as to make the industrial park a commercial ecological system.

Distinguished guests, this is my report on the sustainable development of industrial parks in 2016. Thank you!

Note: A report on this forum by APEX News at Finance Eastday can be accessed on the following website https://v.qq.com/x/page/a0357u8363z.html