Economic transition, industrial location and corporate networks: Remaking the Sunan Model in Wuxi City, China

Abstract

This research investigates the transition of the Sunan model, which was centered on local-state directed township and village enterprises (TVEs), through a case study of Wuxi City. Based on questionnaire surveys and firm/government interviews, we have found that Wuxi has been undergoing a series of institutional changes, economic transition and spatial restructuring. TVEs have been replaced by domestic private enterprises and to a lesser extent, foreign-invested enterprises (FIEs). However, in comparison with Suzhou, a leading city in Sunan (southern Jiangsu) where FIEs are a major driving force of economic restructuring, domestic capital and private firms have played a more important role in Wuxi. It is found that domestic firms in Wuxi have their own local production networks, rather than forming networks with FIEs. Moreover, local governments remain a key agent of economic transition and firm (re)location. The case of Wuxi highlights the multiple trajectories of remaking the Sunan model, the strong hand of local states, and the uneven process of economic development.