The eye-catching bankruptcy re-organization last year of Wuxi Suntech Power Co, once the world's largest maker of solar panels, raised doubts about not only the great leap of China's photovoltaic industry, but also the strong support the local government had given to such a high-tech company.

However, "as an example of innovation, I don't think Suntech has failed", said Xu Chongyuan, vice-director of the Wuxi Science & Technology Bureau. "The re-organization of this solar giant last year had nothing to do with its technological innovation."

Suntech's amazing rise had come to an end due to a glut in the market for solar products and problems with its investments in recent years. In March of last year, it announced a $541 million bond payment default, becoming the first company from the Chinese mainland to default on its US bonds. Chinese banks subsequently filed to place Suntech's main unit, Wuxi Suntech Power, into insolvency.

After being acquired by Shunfeng Photovoltaic International Ltd later last year, Wuxi Suntech Power has already rebounded to break even.

"The re-organization was certainly a major setback during the growth of Suntech," said Xu. "And it offers us a chance to rethink."

On the one hand, the unfavorable international market was an obvious factor. The recent anti-dumping measures initiated by the United States and Europe on new energy products has dealt a huge blow to China's fast-growing solar manufacturers like Suntech, Xu said.

On the other hand, it is also worth rethinking whether the local government offered too much help to Suntech, which had thus developed less ability to survive the market changes, Xu added.

To deepen reform and boost efficiency, Chinese authorities have acknowledged the market's decisive role in allocating resources.

"It means we need to seek development through more market-oriented approaches," said Xu. "But that will not change our determination and principle to support innovative enterprises like Suntech."

As a forerunner in domestic competition for high-tech industries, Wuxi introduced what is known as its "530 program" in 2006 - aiming to attract more than 30 leading entrepreneurs from overseas in five years.

More than 1,900 high-tech startups have since been set up in Wuxi. Although one-third of them have failed, the rest had already generated more tax revenues by 2013 than the total fiscal support the local government had provided, Xu said.

"This project has been in a stage of development since 2012," said Xu. By attracting high-tech startups with an unconditional subsidy ranging from 400,000 yuan ($64,500) to 1 million yuan, the project drew criticism in early years for what critics said was the inefficient use of fiscal funds. "We have become more selective in attracting high-tech startups." As a result, high-tech startups established since 2012 on average have produced more tax money and revenues than earlier ones.

"In spite of all the different voices and difficulties, we have to uphold such a project," Xu said. Wuxi is but one city in the dense city cluster in the Yangtze Delta, led by Shanghai, China's largest business center. So "our future", Xu said, "entirely depends on our ability to serve our high-tech companies."

(China Daily 09/12/2014 page4)