GROWTH OF NEW ECONOMIC SECTORS IN SECOND-TIER EXTENDED CITIES IN THE CHANGJIANG RIVER DELTA——Case of Suzhou, Wuxi, Changzhou

The second-tier extended metropolises in the Changjiang (Yangtze) River Delta, including Suzhou, Wuxi and Changzhou near Shanghai, are becoming the most active and new innovative industrial agglomerating areas. Manufacturing industries in these second-tier cities have been in rapid growth due to increasing foreign investment. Nevertheless, the economic prospect of these cities is still constrained by a lack of local R&D capacity and production services, which are mainly dependent upon Shanghai. This paper analyses the impact of globalization on the new economic sectors in these cities, the change of industrial structure, the limitation of urban development and the problem of sustainability. Then, the paper analyses the conditions for the high-tech industry and production services in these areas. Also, it applies the industrial organization theory to these cities and examines how these cities can cooperate with each other in terms of horizontal linkages. Finally, the paper gives the future growth prospects in high-tech industry and production services.