For years, revenue has maintained double-digit growth. After Germany, China is the second-largest market for BSH, and is expected to catch up or even pass their home country in a couple of years, Gerke says.

"The Chinese market has huge potential, and some products, like dish washers and ovens, are not yet popular here."

Gerke says he has convinced several of his suppliers in Germany to open factories in Nanjing, which makes the supply chain more efficient.

Nanjing has also proved friendly to smaller foreign companies.

"I visited 14 places before setting up the factory in Lishui county, Nanjing," says Helmut Guesten, general manager of emz-Hanauer (Nanjing).

Emz, an electronic components maker from Germany, "is a 100-percent family business and a typical small enterprise, so we make sure every penny from our pocket goes to the right place", he says.

Unlike most other places, the county authority provides a flexible leasing contract on their factory building, and promises to reserve land for them to buy after three years, if things go well.

Some places are raising the threshold for foreign companies to locate or invest, while for Nanjing, there is still a lot of room for small- and medium-sized enterprises (SMEs), says Wu from the Nanjing government.

In fact, SMEs in Nanjing and Jiangsu province are among the most vigorous in China. Jiangsu has been included in an upcoming national pilot program to launch private placement bonds for SMEs, which will also help finance businesses.

Given its central location and effective transportation network, Nanjing's consumer market covers not only Jiangsu province, but also 10 surrounding cities in Anhui, Shandong, Henan, Zhejiang and Jiangxi provinces.

As one of the biggest cities in China, Nanjing has a large consumer market with strong purchasing power.

The retail market in the city has been flourishing. Last year, the total retail sales of consumer goods surpassed 267 billion yuan, an increase of 17.8 percent from 2010. The per capita disposable income of urban residents was 32,200 yuan last year, 13.7 percent more than in the previous year. And the city sees potential for further growth, both in market size and in consumer purchasing power.

As a leading second-tier city, Nanjing also has a clear advantage in providing the skills and talent for research and development. More than 100,000 university students graduate every year, boosting the development of new industries, including software service outsourcing, IT services, cultural and creative, communications and modern logistics.

The city has also launched a series of initiatives to support and encourage financial services, as well as the animation, comics and game industries.

These include promoting enterprise innovation, waiving or reducing government charges for foreign investors in the development zone, and offering subsidies for the developing patents and products.

"Foreign investment has been playing a key role in Nanjing's economic development, and we are looking forward to more foreign companies coming to Nanjing," Wu says.

Contact the writers through xieyu@chinadaily.com.cn