S'pore brand name in demand in China

Republic's reputation helps draw investors to tech park in Chengdu

By Tay Hwee Peng, The Straits Times, 3 Sep 2012

CHENGDU (Sichuan) - A new high-tech park is starting to take shape in south-west China, leveraging on Singapore's experience in setting up industrial parks and its reputation among top multinational corporations.

The Singapore-Sichuan Hi-Tech Innovation Park is one of several major projects that Singapore companies have embarked on in China in cooperation with the Chinese.

Prime Minister Lee Hsien Loong, who is visiting China this week, will be making his first visit to the park today.

Just as the first roads of the Chengdu park are being laid here, investors have come knocking on its doors. And that is owing to the Singapore connection, officials say.

Many Fortune 500 companies and big international companies have invested in Sembcorp Development's other projects in China, India and Vietnam.

"Naturally, these clients will consider its new project in Chengdu," says Mr Martin Cui Wei, director and chief executive of Sino-Singapore (Chengdu) Innovation Park Development. A few have approached him, he adds. The company, a joint venture between a Singapore consortium led by Sembcorp Development and a Chinese partner, is building the park and will also manage it.

The interest of MNCs in the Chengdu park exemplifies Singapore's role as the middleman to draw foreign investment into China, and explains why many Chinese provinces and cities are keen to get the Singapore stamp on the myriad of industrial, business and high-tech parks mushrooming across the country.

There are around 240 state and provincial-level development zones or industrial parks in China today, says Mr Charles Chaw, group managing director of China Knowledge which publishes an annual ratings guide on China's industrial parks.

Though countries like Germany, Japan and South Korea also have industrial parks in China, Singapore has an advantage in terms of shared ethnic and cultural identity.

"Our cultural affinity also makes Singapore an attractive natural partner because there is less resistance to the assimilation of the methods we propagate," says Mr Yew Sung Pei, assistant chief executive officer of IE Singapore.

But what about players from Hong Kong and Taiwan with similar advantages?

Hong Kong's real estate developers are less experienced than Singapore players in township planning and provision of public amenities and services.

As for Taiwan, Singapore enjoys an early-bird advantage over it as ties between China and the island Beijing regards as a renegade province warmed up only after 2008.

Apart from cultural similarities, Singapore's small size also helps. It is not seen as a threat, unlike bigger nations like the US and Germany, says Dr Wong Tai Chee, who teaches urban geography and urban planning at the National Institute of Education.

Most importantly, Singapore has built up a strong brand name in China - and across the world - over the years.

Mr Chaw, who has visited hundreds of industrial parks in China, says Singaporeans have earned good credentials as honest people "who don't cut corners".

Eighteen years after the flagship China-Singapore Suzhou Industrial Park broke ground in 1994, it has become an important leader in industrial park development in China and is regarded as one of its best.

After Suzhou, Singapore has moved on to other parts of the country, says Dr Wong.

The Chengdu park is one example.

Its planners say the park aims to attract the same kind of investment and talent as Singapore's one-north project in Buona Vista, such as in biomedical technology and digital new media. But it is also targeting industries that play to Chengdu's strengths - including its cheap and abundant labour - such as service outsourcing and precision manufacturing.

Overall, these parks help expand Singapore's economic space and allow Singapore's companies to establish a presence in the world's second-largest economy.

Such platform projects would generate downstream opportunities for other Singapore firms, says Mr Yew. These would be in areas such as urban solutions - including water and wastewater management, township development and transport planning - and the service sector like health care and pre-school education.

Mr Darrel Chua, president of Singapore's mobile and inflight content developer Envee Media, says he will consider moving his company's subsidiary firm from Tianfu Software Park - one of 21 such high-tech parks in Chengdu - to the new Singapore park if terms are good.

"Of course, having the Singapore connection helps... But at the end of the day, we are running a business here, so costs or other incentives will be important in determining whether we will move to the Singapore park," he said.

The proliferation of Singapore-built and managed industrial parks in China shows there is a demand for Singapore expertise. But will this still hold true in the future as the Chinese are fast catching up?

Yes, because of the sheer size of the Chinese market.








Not simply industrial parks
By Tay Hwee Peng, The Straits Times, 3 Sep 2012

CHENGDU (Sichuan) - Industrial parks are getting a makeover in China to keep up with the times. It's no longer all work and no play.

These days, the projects bring together industrial, commercial and residential zones, providing modern amenities and services to residents who live, work and play in the same township.

That is why they are described as "modern integrated projects" rather than industrial parks.

In the 1980s and 1990s, industrial parks served purely functional purposes as centres of industrial or manufacturing activity.

For instance, the China-Singapore Suzhou Industrial Park and Wuxi-Singapore Industrial Park, in their early days, targeted companies that mostly assembled products such as electronics and electrical or domestic appliances and which were labour-intensive.

"The industrial park developer would provide ready-built factories and the workers would cycle to work from the surrounding areas or we would build dormitories," says Sembcorp Development executive chairman Low Sin Leng, who has been involved in the development of the two earlier parks and new ones in Nanjing and Chengdu.

More than 30 years after the opening up of the Chinese economy in 1978, the landscape is a very different one.

"The Chinese government is promoting higher value-added industries and labour costs have skyrocketed.

"The middle-income group is large and expanding... Modern amenities are a must as the workers have higher earning capacity and disposable income and are likely skilled instead of general labourers," says Ms Low.

"Dormitories have given way to condominiums catering for singles or families."

Even older parks like the Suzhou and Wuxi parks have added commercial, residential and leisure elements.

Another key difference is that while the older parks are sited far from the downtown areas, the new projects are located within highly built-up areas.

New projects also focus more on service sectors to break away from the dependence on manufacturing. This is especially so after the 2008-2009 global financial crisis which hit the export-driven Chinese economy badly.

Sustainable development is also the new buzzword as three decades of rapid urbanisation have come at a heavy social and environmental cost.

"Sustainable development avoids a situation where gains are privatised, and costs socialised. Perception of this inequality has led to protests across China," says assistant chief executive officer of IE Singapore Yew Sung Pei.