Nanjing's industrial muscle, brains and a plum location compel foreign investors to give it a good look

----By James Roy

Movie audiences will get an eyeful of Nanjing next year, when three separate commercial films, one of them a joint project between the Jiangsu Provincial Government and American and UK studios, will be released on the subject of the city's darkest memory, the 1937 massacre known as the Rape of Nanking.

While the aim is to give the atrocity a "Schindler's List" treatment - and possibly ratchet up the pressure on Japan to apologise - viewers will likely leave the theatre with no idea of the great strides Nanjing has made since those times. Seventy years later, it is a confident, forward-looking city thriving on east China's dizzying growth.

For the second-largest city in population (about 6.5 million) in the busy Yangtze River Delta (YRD) region, Nanjing might appear to lag behind the competition in some areas; it isn't the region's runner-up to Shanghai in either foreign investment (Suzhou, and even Wuxi, attracts more) or GDP (Hangzhou, Suzhou, Wuxi and Ningbo all trump Nanjing in this category).

But gaudy FDI and GDP numbers don't faze Richard Lee of the China Council for the Promotion of International Trade, who places greater value on Nanjing's propensity to consume - and the fact that, as the capital of Jiangsu province, it "enjoys certain advantages that other cities do not". It also has easy transportation, a good reputation for research and some industrial muscle of its own.

Prime real estate

While it may not boast the region's second-largest economy, Nanjing gets considerable mileage out of its location. It enjoys an enviable position on the shipping route of Asia's largest river that brings plenty of traffic through - freight ships from such big upriver hubs as Chongqing and Wuhan are too large to clear the three bridges in the city spanning the Yangtze (and a fourth is under construction).

Rather than proceed through to Shanghai unimpeded, they have to dock in Nanjing and re-ship on the other side. The same goes for all the ships going the other way, and the constant traffic has made Nanjing one of the largest inland river ports in Asia. In all, its Xinshengwei Foreign Trade Port stretches for 208 kilometres along the Yangtze, handles 60 million metric tons of cargo a year and includes hundreds of berths and jetties (including a special automobile roll-on roll-off dock) and over 600,000 square metres of warehousing space.

Nanjing is not simply a river town. Its location, 280 kilometres inland of Shanghai (and on the country's approximate north-south midpoint), also serves it well as a ground transport hub. The city is the crossing point for the Shanghai-Chengdu and Beijing-Kowloon railways, among several others. Pending the results of a feasibility study, a new railway station to be finished in 2008 will be the largest in Asia, topping Shanghai's new South Train Station. Two high-speed railway projects announced this year should, when finished in 2010, make for even faster travel to Shanghai and Ningbo.

An ever-expanding web of highways helps connect the city to a number of important smaller industrial centres like Yangzhou, Chaohu and Wuhu - all within an hour's drive. The convenience has allowed eager shoppers from the surrounding areas to flock to Nanjing, which boasts the highest retail sales in the YRD after Shanghai, said Lee.

The sparkling Shanghai-Nanjing Expressway, completed in 2005, makes it possible to make the trip in just over two hours. And, as part of the still in-progress Shanghai-Chengdu National Highway, a new stretch of road will direct travellers through Nanjing's southeastern downtown area as they drive further into China's interior.

Five "pillar industries", steel (local state-owned Nanjing Steel), chemicals and petrochemicals (German chemical giant BASF has a big presence, including a large joint venture with Sinopec), automobiles, electronics and power are well-established in the city, making it a compelling investment location for overseas operators with an abundance of local know-how and sterling infrastructure.

The auto industry in particular is a big driver. After Changchun in northeastern Jilin province, Nanjing is the top automobile producer among second-tier cities.

Nanjing Automobile, the city's flagship auto maker, made waves internationally when it bought portions of MG Rover in late 2004, and then aroused puzzlement when it announced in August that it would begin making cars in the middle of Oklahoma, of all places.

Foreign auto makers seem to be having a better time of it. Fiat, whose Palio compact sedan is selling well on the local market, has forecast solid profits in China for 2007 after a string of loss-making years in China. Ford and Mazda, through their joint venture with Chang'an Motor, make finished cars as well as engines. The automotive components industry is thriving as well, as parts makers are gravitating toward the city, said Lee.

As an ancient city with a more than 2,000-year past and former Chinese capital (during the 1911-1949 Republican period as well as a handful of first-millennium dynasties and kingdoms), Nanjing has a keen sense of its own history and a preservationist bent compared to most of China's metamorphosing metropolises.

"In Nanjing they tend to build around the old buildings. It's not like Beijing, which is pushing out its older parts to make room for the new ones," said Joyce Du, a Tianjin native who studied at Nanjing University before moving to the current capital to work as a journalist. Though whole sections of the city's centuries-old city walls still remain (the best examples are in Gulou District), the pace of urban construction has in fact accelerated in recent years.

Historical interest is the primary tourism draw. The Sun Yat-sen mausoleum is especially well-attended, and became a point of common ground between the mainland and Taiwan in 2005, when Premier Wen Jiabao and Kuomintang leader Lien Chan met to pay their mutual respects to modern China's founding father.

Not all the historical sites are so nostalgic. The horrific six-week-long campaign of carnage during the Japanese invasion in late 1937 is memorialised at the sobering Museum of the Nanjing Massacre. Many nerves are still raw, and the invasion remains a touchy subject in the city. "There is a memorial bell that rings around the city every December," said Du. "Sometimes taxi drivers or shop owners will refuse to serve Japanese customers, especially during this time."

While open hostility to Japanese visitors is actually often overstated, investment by Japanese companies, Mazda aside, rates conspicuously low compared with the region's other major cities. Perhaps by coincidence, the Rising Sun Anger Release Bar, a novelty saloon where patrons are free to yell and smash glasses, and pay extra to heap verbal and physical abuse on well-built employees, opened earlier this year in Nanjing. The concept, sure enough, was borrowed from similar establishments already running in Japan.

Overall, though, most residents agree that life in Nanjing is pleasant and even calming. Air quality is higher than in many of its peer cities, and many of the city's neighbourhoods are leafy and green (a current government campaign aims to give 95 percent of the population access to green areas). Xuanwu Lake, though it may lack the majesty of Hangzhou's West Lake, has a lively teahouse area and nearby Purple Gold Mountain (Zijinshan) looks over the entire city. "Nanjing is a very good city from a feng shui perspective," said Du. "We have both mountains and water, where most cities just have one or the other, or none at all." But don't be fooled into thinking this is a place to relax. "Nanjing is actually a very bustling place," said Christophe Lauras, general manager of the Sofitel Galaxy Hotel in Nanjing. "In that sense, it is more like Shanghai than Chengdu." Accor, the French hotel operator that owns Sofitel, showed its confidence in the city's growth when it simultaneously opened two five-star hotels - one for business travellers in the central business district, and another by a golf course with leisure guests in mind - earlier this year. "Basically, there were very few reasons for us not to be in Nanjing," said Lauras.

So much to offer

If foreign investors like Nanjing's low costs, agreeable atmosphere and extreme connectedness, they love its knowledgeable workforce. The city's 43 universities and colleges, with more than 320,000 students in all, ensure a supply of well-trained graduates unmatched by almost any other city in China - and more graduate-level students than anywhere else. There are more engineering graduates here than in Shanghai, available for significantly lower wages, though those continue to rise.

While many Nanjing alumni, according to Du, fan out across the country in search of jobs elsewhere (many come from elsewhere to study here), the majority remain in town after receiving their diplomas. Some 640 research institutions call the city home, most of them state-run labs concentrating on furthering domestic knowledge in strategic industries, though more and more multinationals, among them Lucent and Sony Ericsson, are opening R&D centres in town.

But even with so many advantages, Nanjing still has stiff competition in its region - Hangzhou and Suzhou are becoming high-tech powerhouses and smaller cities like Kunshan and Changzhou compete on price and convenience to Shanghai. Might Nanjing's appeal fade over time?

Lee does not think so. Its value as a research base, a transportation hub, and the political, financial and information centre of Jiangsu province is too great for it to fall behind. "Nanjing will always have a strong role to play in the YRD," he said, adding that "as the capital city, the government will always see to it that it does well."