The development of characteristic towns in Zhejiang is a new highlight in the province’s economic restructuring and a meaningful exploration of the supply-side reform. The new pattern has attracted wide attention as a new mode of relationship between the government and the market.

Zhang Yan, founder of the Hangzhou Tongmi Internet Financial Service Company, discovered that it takes a smaller amount of time to finish a new business registration in these kinds of characteristic towns than in other places.

“The administrative departments are keen to help us solve practical problems concerning legal affairs, business registration, recruitment, land leasing and financing,” Zhang said.

Dream Town, where Zhang’s business is headquartered, is located in Qiancang of the Yuhang district in Hangzhou. Defined by the government as a community for young people with dreams and incubator for new businesses, the town has become popular among young people and investors soon after it was finished.

Another characteristic town, Guyan Painters’ Town, is located in a holiday resort beside the Oujiang River in Lishui. It is known as a town for painters and photographers. Local residents make money from renting houses and running restaurants for visitors.

The Zhejiang provincial government put forward the strategy of building characteristic towns on Jan 21, 2015, earmarking these towns as new carriers for accelerating industrial restructuring and upgrade. Since then, numerous such towns have come to the fore across the province.

Provincial party chief Xia Baolong said that characteristic towns are neither administrative units, nor industrial parks, but platforms developed under the principles of innovation, coordination, common development as well as being environmentally friendly and open, for the seven emerging industries of information economy, environmental protection, health, tourism, fashion, finance and high-end equipment manufacturing. These platforms all have multiple functions as areas for residence, industries, tourism and culture.

Xia thought that Zhejiang has its advantages to develop such towns, as it boasts a developed private economy and plenty of capital, encourages innovation and entrepreneurship, and features charming natural landscape .

Weng Jianrong, Vice Director of Zhejiang Development and Reform Commission, said, “Zhejiang’s version of characteristic towns draws its inspiration from abroad such as Davos of Swiss, Greenwich Hedge Fund Town in the US, and Provence of France. These towns have their special culture, well-preserved ecology and unique advantageous industries, and (their development) is very inspirational for Zhejiang to optimize its productivity pattern.”

Over the past 30 years, industrial clusters and regions with characteristic industries have prospered in Zhejiang. However, they are now facing a number of problems such as lack of innovation and famous brands. Therefore Zhejiang needs a new strong growth engine that can transform these once-prosperous areas into ones that feature integration instead of simple concentration, growth quality instead of quantity, and innovation instead of imitation.

Zhejiang’s Governor Li Qiang said, “Building characteristic towns in Zhejiang is an important decision and administrative innovation and in line with the needs of its economic development and historical trends.”

The “Sweet Chocolate Town” in Jiashan and the “Stone Appreciation Town” in Changshan have been successful in combining their advantageous industries with tourism, and in promoting the development of multiple industries in both the upper and lower industrial chain.

Characteristic is the core element in the development of such towns. Therefore, the key job is to identify characteristics, make them conspicuous and expand them, in order to avoid homogeneous competition. Even if two characteristic towns feature the same industry, they must have different positions and focuses.

For example, though Yunqi Town and Dream Town both develop the information economy, Yunqi Town is famous for big data and cloud computing and Dream Town for Internet entrepreneurship and venture capital.

Yu Xindong, a researcher at the policy study office of the Zhejiang Provincial Committee of the Communist Party of China, suggested local authorities should avoid directly copying existing towns elsewhere and attracting investment for industries in which they don’t have a foundation.

Neither should local authorities become “blind” to their own characteristics, thinking there is nothing unique to tap on, Yu said. Natural landscape, folk customs, specialty products, featured streets, unique industries, for example, are all characteristics.

Zhejiang’s characteristic towns are usually small and beautiful. They are no larger than three square kilometers in planned area and about one square kilometer in construction area. All such towns are designed to become scenic areas rated 3A or above, with towns featuring tourism being 5A scenic areas.

Longquan Celadon Town, with a low density of buildings, retains its original natural appearance, making the return to Mother Nature and an idyllic life a reality. Datang Sock Town is easily recognizable for its buildings constructed with natural stones.

Meanwhile, the Zhejiang government is piloting various kinds of reforms in these towns to encourage quick development.

In the development of such towns, culture is the core, and plays a role in the whole process of industrial development. However, these towns are not passive or simply serve as “museums” in carrying on history and culture. Instead they are bellwethers in industrial innovations, injecting new vigor into traditional industries, such as tea, silk and rice wine.

Statistics show that the first 37 provincial-level characteristic towns in Zhejiang has started the construction of 431 projects in 2015, achieving 48 billion yuan ($7.38 billion) in fixed asset investment and attracting more than 3,300 enterprises to settle down.