Centre of attention

Nanjing has been something of an industrial under-achiever over the past 50 years. Being China's capital under the Nationalists was never going to endear the city to the Communist government. But local officials shoulder most of the blame for the relative stagnation in terms of economic growth and inward investment. Local rivals such as Suzhou have been quicker to realise the importance of adopting an open and flexible attitude to business.. By contrast, the government in Nanjing has earned a reputation for being bureaucratic and conservative.

Responsive to investors

However, this image is now changing for the better. New office buildings are springing up in the city centre and road improvement schemes are helping to relieve congestion. Many of the tree-lined avenues remain, a feature which gives Nanjing much of its character and charm.

The city still has plenty of inherent advantages and is ranked officially as the fifth most important in the country. It is capital of Jiangsu province, an industrial power-house and the third most likely landing spot for foreign investment in China, according to Mr Daniel Conklin, Standard Chartered

Tourism potential

There is a widespread feeling in Nanjing that the city has failed to capitalise on its tourist potential. Last year one million overseas tourists visited Jiangsu province, bringing in US$408m in foreign exchange earnings. Nanjing contains many top attractions in the province, including Dr Sun Yatsen's mausoleum, relics of the ancient city walls, and museums and buildings relating to its period as China's capital under the Nationalist government.

Since opening in 1983, the Jinling has been .the only luxury hotel operating in Nanjing. It has been a focal point for expatriates, both socially and as a representative office base for the likes of Inchcape, IBM, Philips and Standard Chartered.

Bank's regional manager in east China.

Many prominent cities lie within a radius of 300km, including the nation's foremost commercial centre, Shanghai. "Jiangsu is one of the richest provinces in China and production and income per head are also at high levels," says Mr Zhang Zhi Rong, the resident manager of Philips (China) Investments Services in Nanjing. Philips is the biggest foreign investor in Jiangsu province. Its four Nanjing investments, all of which are "very profitable" according to Zhang, are in the fields of television tubes, lighting, PC monitors and medical systems.

The city also boasts good road and rail links, and a new airport opened last year, which is helping to promote the city as a centre for cargo transport. A much-needed second bridge over the Yangtze will be completed in 2001. Nanjing is also one of Asia's biggest inland river ports, being located on the lower reaches of the Yangtze River. The port is some 350km from the entrance to the sea and contains 16 berths that can accommodate ships of more than 10,000 tonnes.

The reason for the city's relatively poor performance in the past was complacency, according to Zhang. Being one of the more affluent places in China, he explains, there was little incentive to work hard.

However, competition has intensified over the past year, with the opening of several new luxury properties. Opposite the Jinling is GE Hotel, opened in May. Others include properties managed by Holiday Inn and Hilton group; a Sheraton property is due to open later this year.

"Business is not so bad," says Mr Johnny Pan, PR Manager of the Jinling. "However, because there are now more competitors our rates are becoming more reasonable." Jinling's occupancy stood at 65 per cent in June and 70 per cent in May. Some 90 per cent of guests are from the corporate sector. It also operates the 15-storey World Trade Centre building across the street, a mixture of office and retail floors.

The hotel has responded to the fresh competition by embarking on a renovation programme of guest rooms and converting the basement area into an entertainment Today, there is evidence that city officials are more responsive to investor needs, while trying to retain a reputation for honest dealing. "Jiangsu provincial government is solid ?more solid than in some coastal cities," says Zhang. "It is more business-like."

More and more investors are starting to view the city as a viable and cost effective alternative to Shanghai. Ms Joyce Wong is Nanjing branch manager of Standard Chartered, the only foreign bank in the city. She says the government realises it was too bureaucratic and it now wants to speed up approval procedures. "The government recognises that it has fallen behind places like Wuxi and Suzhou," says Wong.

For example, procedures have been simplified for securing a joint venture licence and there are more favourable tax regimes. Spe area, with bowling lanes and a beer hall. Some rooms are also in the process of being converted into apartments.

The Nanjing Hilton Hotel, which had a soft opening last December, has delayed its grand opening because of continued construction work. Being located on the out-skirts of town is a challenge in itself. Mr Jerome de la Fuente, sales and marketing director of Nanjing Hilton, says it's a tough market because of the lack of international air connections and the onset of the Asian crisis. "We need to market Nanjing more ?there's a lot of things to see here but it's not promoted well. We need a destination marketing pro-gramme. You can't promote the hotel if nobody knows where the destination is."

Other commentators agree. "They have not done a good job in terms of marketing the city's tourist potential," says Daniel Conklin of Standard Chartered.