Dongfang State-owned Capital Chairman Gu Yan: Leveraging Capital Strength to Drive Explosive Growth of Wujiang's Healthcare Industry
Although nearly a month has passed since the conclusion of the 5th Future Healthcare 100 Conference, its host city, Wujiang, has by no means “slowed down”; its exploration of the big health industry is only just beginning.
As a “pioneer” of the national development strategy for the integrated development of the Yangtze River Delta and a “leader” of China’s private economy, Wujiang District of Suzhou has kept pace with the times in recent years, seized opportunities for industrial development, closely leveraged its existing resources, and focused its efforts on the medical and health industry, achieving remarkable results.
As of now, more than 100 well-known domestic medical-related enterprises have settled in Wujiang District, among which 21 have been included in Suzhou’s database of leading industries above designated size.In terms of actual output, leveraging multiple advantages such as government support, resource integration, production capacity aggregation, and concentrated development of the ecosystem chain,Wujiang's biopharmaceutical industry achieved an output value of approximately RMB 4 billion in 2020, becoming a critically important link in Wujiang's industrial pillar chain.
But this is not the end. In recent years, the Suzhou Municipal Government has attached great importance to the development of the biopharmaceutical industry, successively formulating and issuing a number of key policies that explicitly call for benchmarking against and drawing on the “Boston experience” in the United States to comprehensively build a biopharmaceutical industry ecosystem with distinctive Suzhou characteristics. As one of the main urban districts of Suzhou, Wujiang is currently actively implementing the decisions and deployments of higher-level authorities, vigorously promoting the development of the medical and health industry across the district and incorporating it into its future industrial development plans.
It is not difficult to see that Wujiang is rapidly “advancing” into the medical and health industry. However, it must be recognized that Wujiang is still in the initial stage of industrial development, and thus capital will play a crucial role in the transformation of the entire industry. In light of this,VCBeat conducted an exclusive interview with Gu Yan, Chairman of Suzhou Wujiang Dongfang State-owned Assets Investment Operation Co., Ltd. (hereinafter referred to as “Dongfang State-owned Capital”), to further explore the top-level logic of capital empowering the development of the regional health industry from a professional perspective.
As the carrier of Wujiang's financial ecosystem, the Suzhou Bay Dongfang Venture Capital Base holds significant importance for regional industrial development.As of the end of 2020, the base had registered 342 financial investment institutions., including Dongfang State-owned Assets, Shengshan Assets, Bank of China International, Legend Capital, and China Everbright Limited. In terms of registered capital scale,The base has currently exceeded 80 billion yuan., including supporting funds such as directly managed fund-of-funds, co-managed fund-of-funds, coordinated fund-of-funds, and policy-oriented direct investment funds.
The convergence of numerous investment institutions in Wujiang underscores the immense potential of this Jiangnan city in industrial development. In the view of Gu Yan, Chairman of Dongfang State-owned Assets,Wujiang has garnered significant favor from the capital market due to its aggregation of multiple advantages in industrial development.
First, the private economy is highly developed, with a pronounced effect from leading enterprises.Wujiang is a typical representative of the “Southern Jiangsu Model” and a national leader in the private economy. To date, Wujiang is home to more than 80,000 private enterprises, which contribute over 60% to regional economic growth. The district boasts a cohort of competitive leading enterprises, among which Hengli and Shenghong have been included in the Fortune Global 500, accounting for half of all such companies in Jiangsu Province. In addition, four enterprises, including Hengtong and Tongding, have been listed among the Top 500 Chinese Enterprises, while five enterprises, including Yongding, have been featured in the Top 500 Chinese Private Enterprises.
Second, leveraging Shanghai’s economic strength to radiate influence and drive regional development.Wujiang, the “Southern Gateway” of Jiangsu Province, is a true urban core area bordered by Shanghai to the east, Taihu Lake to the west, Hangzhou to the south, and the main urban district of Suzhou to the north. In recent years, leveraging the strong momentum of the integrated development of the Yangtze River Delta and backed by Shanghai’s massive economy, Wujiang has advanced high-quality regional industrial development through collaborations in talent exchange, corporate cooperation, and trade connectivity. These efforts have continuously enhanced Wujiang’s capabilities in technological R&D, product optimization, and market channel establishment.
Third, the business environment is world-class, with the government providing critical support for corporate development.Wujiang has consistently maintained an open and inclusive stance, continuing to uphold the fine tradition of “respecting, valuing, and benefiting businesses.” It regards optimizing the business environment as the “lifeline” for high-quality development, sincerely treats enterprises as “family members,” and spares no effort to ensure that businesses receive tangible benefits. In addition, the Wujiang government actively engages in various “dual recruitment and dual attraction” initiatives, focusing on talent introduction and investment promotion to address practical challenges and meet the actual needs of enterprises, thereby adopting multiple measures to boost their development.
Overall,A favorable policy environment, unique locational advantages, a robust industrial foundation, strong innovation capabilities, and a business-friendly ecosystem that respects and values commerceJointly cultivating fertile ground for industrial development in Wujiang.
Currently, Wujiang is making significant strides toward the rapid development of its medical and healthcare industry. On this challenging path, Dongfang State-owned Assets will serve as an indispensable and vital force.
Dongfang State-owned Assets is a wholly state-owned company approved by the People's Government of Jiangsu Province and established with the approval of the People's Government of Suzhou City, qualified as an entity for state-owned asset investment. Founded in November 2001, the company currently has a registered capital of RMB 3.6 billion and total assets of RMB 11.732 billion. It holds long-term equity investments in 27 enterprises, including 9 wholly-owned subsidiaries, 5 controlled subsidiaries, and 13 affiliated companies.
As a state-owned investment institution, Dongfang State-owned Assets is committed to providing targeted support for industrial development through equity investments, thereby accelerating the transformation and upgrading of industries across the entire Wujiang District.According to Chairman Gu Yan, to help the emerging strategic industry of medical and healthcare get on track as soon as possible, Dongfang State-owned Assets has begun to "offer advice and suggestions," focusing mainly on two levels to exert efforts and add momentum to industrial development.
The first aspect is to introduce innovative elements and strive to build an economic ecosystem.Industrial development must be grounded in service support. For Wujiang, this involves establishing a friendly platform for information exchange and resource matchmaking among governments, enterprises, and investment institutions through various channels such as government liaison, development forums, exhibition services, and conference events. Building on this foundation, we will systematically cultivate an economic ecosystem around the lake region to better serve all stakeholders and drive the continuous advancement of emerging industries.
On the other hand, leverage existing strengths to guide capital toward the entire industrial ecosystem.Wujiang has long regarded advanced manufacturing as the foundation of its district development. To date, it has formed four leading industrial clusters: silk textiles, electronic information, optical cables and fibers, and equipment manufacturing. Among these, electronic information and equipment manufacturing have grown into industries with annual output values exceeding RMB 100 billion. The district boasts a robust manufacturing base and an exceptionally complete industrial chain, which can strengthen the upstream and downstream supply chains for the healthcare industry, thereby continuously enhancing its competitiveness. Specifically, equipment manufacturing and optical cable/fiber production will lay a solid foundation for the development of regional medical devices; electronic information will focus more on medical informatization and digital healthcare; while silk textiles will provide reliable support for the production of medical consumables.
In the view of Chairman Gu Yan, an interconnected ecosystem plays a positive role in promoting industrial development. Building a comprehensive industrial ecosystem will provide greater impetus for growth, while integration models that efficiently link with existing advantageous industries will help achieve fission-style development that is better, faster, and of higher quality.
Gu Yan, Chairman of the Board, candidly stated that as a “state-owned” investment institution, Dongfang State-owned Assets inherently shoulders the mission of driving regional industrial development. This is specifically reflected inUnlike enterprises, Dongfang State-owned Assets places greater emphasis on investment institutions. It will guide these institutions to establish a presence in Wujiang through equity investments and leverage various robust measures to boost their development. Secondly, it is committed to identifying and vigorously nurturing market “new sprouts” by operating talent funds and other mechanisms to support the growth of early-stage and small-sized enterprises, thereby providing a continuous source of vitality for regional industrial development.
Regarding the selection of investment institutions, Dongfang State-owned Assets has established a systematic "access mechanism." Chairman Gu Yan stated that the cooperation between Dongfang State-owned Assets and investment institutions is primarily based on establishing industrial sub-funds to jointly promote regional industrial development. Therefore, the selection of investment institutions mainly focuses on three core elements:1. Standardization of Investment Firm Branding, with successful case studies and a certain level of influence in the industry;Second, strong vertical industry focus., possesses strong expertise in a specific field of healthcare and is adept at grasping the industry's development logic;3. Industrial Alignment, the areas of focus and expertise of investment institutions are strongly correlated with the industrial development of the Wujiang region.
As for investment enterprises, Chairman Gu Yan mentioned two key terms: one is to have“Core Competitiveness”, while the other is to be able to“Accurately Grasping Market Demand”Dongfang State-owned Assets primarily focuses on early-stage startups, and thus has established distinct selection criteria. These are mainly reflected in three aspects: First, the founding team must possess strong composite capabilities, mastering both technology and market operations. Second, the sector of focus must align with market demands, as industrial development invariably revolves around such demands; self-indulgent approaches without market validation are unsustainable, making it crucial for startups to identify the right track. Finally, the enterprise must have core competitiveness within its specialized field. The deeper the "moat" it builds, the greater its potential and the further it can navigate in blue ocean markets.
The 21st century is an era in which humanity pursues health, and likewise a time when the biopharmaceutical and broader health industries have achieved substantial growth. As the core of future urban competition will inevitably be industrial competition, those who can first achieve breakthroughs in the medical and health sector will secure the strategic high ground in the competition among cities.
For Wujiang, the current industrial development path is still in its early stages, resulting in a strong demand for capital. As a state-owned investment institution, Dongfang State-owned Assets will impose higher standards on itself, expand and deepen its engagement, fully leverage its advantages, and promote the development of the regional medical and health industry through various means, striving to build another hundred-billion-yuan-level industry cluster in Wujiang.