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Economic globalization and knowledge economy provide new opportunity for development of Suzhou, a historical city which has traditional intimate relationship with Shanghai. This paper aims at exploring the chances and challenges faced by Suzhou at the new century and makes the quantitative analysis of the urban function of the Suzhou Municipality through the studies of the Greater Shanghai Metropolitan Area and the Shanghai-Suzhou relationship. It reaches the conclusion that in the new century Suzhou shall make the integrated development with Shanghai to be built into the processing and manufacturing base with the high and new technology as the mainstay. In the meantime Suzhou shall also become one of the research bases for the advanced technology and the modern tourist city with beautiful eco-environment.