City that seduced Marco Polo still sparkles in New China

Suzhou Letter: When Marco Polo came through Soochow in the 13th century the great traveller was almost overwhelmed by what was then one of the richest cities in Kublai Kahn's empire.

The metropolis on the lower reaches of the Yangtze was "very great and noble", he gushed, a home to silks and other exquisite treasures.

"The people are subjects of the Great Khan, and have paper money. They possess silk in great quantities, from which they make gold brocade and other stuffs, and they live by their manufactures and trade," he wrote.

They still do. To drive the 90 kilometres from Shanghai to what these days is known as Suzhou is to bear witness to the emerging strengths of the New China.

The roads are lined with factories, much as in the industrial heartlands of Shenzhen, but this 2,500-year-old city in Jiangsu province has been clever at luring foreign investors from the higher end of the value chain - biotech firms, IT companies and many big Western brands. Much as the city succeeded in wooing Marco Polo back in the late 1200s.

"It contains merchants of great wealth and an incalculable number of people. Indeed, if the men of this city and of the rest of the country had the spirit of soldiers, they would conquer the world; but they are not soldiers at all, only accomplished traders and most skilled craftsmen.

"There are also in this city many great philosophers and others who do not appear to work," the Venetian wrote in his Travels.

It was perhaps this class of Suzhou resident that Dubliner Peter Goff had in mind when he opened a branch of the expanding Bookworm chain of cafe-libraries here in October, and he is as taken with the place as was the illustrious Italian adventurer many centuries before him.

"What attracted me to set up the Bookworm here was the contrast of the ancient old town with the industrial China around it. There is a great literary and cultural tradition here, an active university, but also a trading heritage," says Goff, who put down his journalist's pen to build Bookworm cafes in key, often second-tier, cities in China instead. "The water, the parks, the culture, it's all here," he says.

Kublai Khan was the same ruler who in Samuel Taylor Coleridge's poem erected "a stately pleasure dome". To the Chinese, Suzhou is the "Venice of the East" for its hundreds of canals and hump-backed bridges, - along with nearby Hangzhou one of the most desirable places to be in the whole country.

"In heaven, there is paradise. On earth, Suzhou and Hangzhou" is a popular Chinese proverb, all of which combines to make this city of 5.5 million a very atmospheric place.

One of the highlights of this city is a museum built in 2006 by the Chinese-American architect IM Pei, who is best known for the Bank of China building in Hong Kong, as well as other public buildings around the world.

The building is a personal project, which the nonagenarian master builder claimed would be his last, in the city that is his ancestral home.

The museum seamlessly adjoins a complex of ancient gardens and pavilions, with poetic names like the Humble Administrator's Garden, Zhong Wang Fu and the Lion Forest Garden, bearing testament to Suzhou's heyday during the Ming and Qing dynasties, when it was a cultural capital in the region.

On display inside the museum's impressive white stucco structure are fabulous jades, enamels, calligraphy and paintings. Many of the delicate brush paintings are on fans, including an elegant depiction of an old man listening to the sound of the birds.

IM Pei himself was born in Guangzhou and left China in 1935 to study architecture in the United States. He didn't return for nearly 40 years.

The museum he has built as a personal mark of respect to his ancestors - his grandparents came from a long line of prosperous Suzhou merchants.

These days many of the prosperous merchants can be found in the Singapore-Suzhou Industrial Park, a vast industrial estate which will cover 70sq km when it's finished.

The Singaporeans have scaled back their investment in this landscaped factory zone, but the Suzhou merchant class is clearly reaping the benefits. Big names like Wyeth, Samsung, Black & Decker, L'Oréal and YKK zips have set up here and Liverpool University opened a campus in September 2006, in partnership with Xi'an Jiaotong University.

Suzhou has lured the big name brands to set up and this fits very well with the central government's stated aim of trying to drag China up the value chain, away from low-end manufacturing to more sophisticated processes which will help China develop the innovative skills it needs to survive in the world economy in the longer term - and thus continue to live up to Marco Polo's enthusiastic descriptions.