Wednesday 29 October 2014

Singapore, China mark 20 years of ties in Suzhou

Success of joint industrial park 'testament to positive collaborations'
By Esther Teo China Correspondent In Suzhou, The Straits Times, 27 Oct 2014

THERE is a "special significance" to holding high-level meetings between Singapore and China this year at Suzhou city because the success of the Suzhou Industrial Park (SIP) is testament to the positive collaborations between the two sides over the years, Vice-Premier Zhang Gaoli said.

The SIP, the first government- to-government project set up in 1994, and Tianjin Eco-City, a government-led project that was launched in 2008, both showcase the pioneering spirit and innovation that have marked Sino-Singapore bilateral ties and injected vitality into them, he added.

Mr Zhang was speaking at a welcome dinner in Suzhou last night, ahead of today's meeting of the 11th Joint Council for Bilateral Cooperation (JCBC), the highest- level mechanism for bilateral cooperation. He co-chairs the JCBC with Singapore Deputy Prime Minister Teo Chee Hean.

"It is of special significance to us to hold the JCBC in Suzhou. It is the best commemorative event for the 20th anniversary of the SIP," Mr Zhang said at the dinner attended by both Chinese and Singapore officials and businessmen.

While the SIP occupies just 3.3 per cent of Suzhou's land and holds 7.2 per cent of its population, it generates 15 per cent of the city's economic growth and 20 per cent of the city's trade, he pointed out.

The park was designed to allow Singapore to share its industrialisation experiences with China.

DPM Teo noted the SIP's "solid international reputation as a modern industrial park" that has been replicated across China, for instance, in the western Xinjiang region and eastern Anhui province.

He also touched on the "close and substantive" relationship between the two states, which has seen Singapore become China's largest foreign investor and China turn into Singapore's largest trading partner.

"This is a reflection of Singapore's confidence in China's continued growth and future prospects. Our wide-ranging cooperation has evolved with China's developmental needs," Mr Teo said in his toast at the dinner.

Both leaders later attended a cultural performance at the Suzhou Cultural and Arts Centre to mark the SIP's 20th anniversary.

At their meeting earlier in the day, Mr Zhang touched on a proposed third government-to-government project that is expected to be located in one of three western cities: Chongqing, Chengdu or Xi'an.

Elaborating publicly for the first time on the project that he suggested to Singapore in October last year, he said that such a project in western China would be closely connected with the country's push to develop a "21st-century Maritime Silk Route" - a major strategy that Beijing is already working on.

Proposed by President Xi Jinping last year, it is intended to revive a trade route running from China through South-east Asia and the Indian Ocean to Europe.

"In whichever area Singapore chooses, whether it is modern connectivity or modern services, this will be a new platform of cooperation for our two countries," Mr Zhang added.

Apart from the JCBC meeting, Mr Teo is scheduled to co-chair the meetings of the 16th China-Singapore SIP Joint Steering Council and the Seventh Sino-Singapore Tianjin Eco-City Joint Steering Council today. He leaves for Beijing tomorrow.

Joint panel meets to firm up plans for third S'pore-China project
By Esther Teo, China Correspondent In Suzhou, The Straits Times, 28 Oct 2014

A JOINT ministerial committee has met over the weekend to firm up the "terms of reference" of a proposed third government-led project between Singapore and China, said Deputy Prime Minister Teo Chee Hean yesterday.

With a focus on modern services and modern connectivity, it is expected to be located in one of three western Chinese cites: Chongqing, Chengdu or Xi'an.

"We aim to see whether we can reach a conclusion on the concept, location and some of the programmes by some time next year. That will be a good timeframe that both sides feel will be good to work towards," Mr Teo told reporters after the Joint Council for Bilateral Cooperation (JCBC) meeting in Suzhou, eastern Jiangsu province, yesterday.

The JCBC is the highest-level annual bilateral meeting between Singapore and China.

Singapore's point man for the project is Minister for Social and Family Development Chan Chun Sing, who co-chairs the committee for it with Chinese Commerce Minister Gao Hucheng.

Mr Chan said joint exploratory studies and site visits to understand the strengths and weaknesses of the various cities can be expected in the coming year.

"It's not just about the development of an industrial park, because the Chinese are very capable of doing that. We want to develop the enablers for financial and economic activity to take off in the western region," he added.

Yesterday, Education Minister Heng Swee Keat, who co-chairs the Singapore-Jiangsu Cooperation Council, and National Development Minister Khaw Boon Wan also gave updates on the two flagship bilateral projects under their charge.

Mr Khaw said the Tianjin Eco-City should be entering its "rapid growth stage" while Mr Heng said the next phase of the Suzhou Industrial Park's development will be towards an innovation- and service-oriented economy, particularly in the areas of talent development and research and development.

On this front, the National University of Singapore (NUS) Lee Kuan Yew School of Public Policy inked an agreement yesterday to open its first overseas education centre in Suzhou, said Mr Heng.

It will offer executive education and postgraduate degree courses aimed at equipping Chinese officials with the knowledge and skills required for China's developmental needs, NUS said in a statement yesterday.

S'pore, China looking at new areas of cooperation: DPM Teo
By Esther Teo China Correspondent In Beijing, The Straits Times, 25 Oct 2014

SINGAPORE and China are seeking fresh areas of cooperation such as social governance and human resource development as they define new needs in their forward-looking relationship, said Deputy Prime Minister Teo Chee Hean.

And high-level bilateral meetings such as the annual Joint Council for Bilateral Cooperation (JCBC) provide the platforms for exploring new ways to deepen bilateral cooperation, he added.

"One of the good things about Sino-Singapore relations is that through the JCBC and other platforms, we have always been able to be forward-looking and to define these new needs," Mr Teo said in an interview with the official Xinhua news agency, published yesterday, on bilateral cooperation since diplomatic ties were set up in 1990.

His comments come just days before the 11th JCBC - the highest-level bilateral mechanism - kicks off in eastern Suzhou city on Monday. The annual meeting is co-chaired by Mr Teo and Chinese Vice-Premier Zhang Gaoli.

"Apart from finding new and innovative ideas in existing areas, particularly economy and finance, I believe we will be able to develop cooperation in new areas such as social governance, developing the financial services sector and human resource development," said Mr Teo.

On furthering economic and financial cooperation, he cited the growing offshore yuan clearing facility in Singapore that now averages three trillion yuan (S$625 billion) a month. It is also the largest yuan centre outside Hong Kong.

"We believe that enhancing both the efficiency and the liquidity of renminbi trading internationally is useful not just to China but for the region and the world," added Mr Teo. "Singapore, being a well-regulated and very sophisticated financial centre, we hope we are able to help play a role in this area."

He also noted that various recent initiatives like cross-border yuan transactions in the Suzhou Industrial Park and Tianjin Eco- city bilateral projects have gained traction. Loans worth about one billion yuan, for instance, have been made by banks in Singapore to firms in both parks.

China is pushing through a series of tough economic and financial reforms that include internationalising the yuan, also known as the renminbi, and liberalising its interest rates.

The JCBC meeting will also be closely watched for further details of a third government-to-government project proposed by China. It is expected to be located in one of three western cities: Chongqing, Chengdu or Xi'an.

But on that front, Mr Teo said that it is too early to talk about the sites for the third project as talks are ongoing. He added that this project would differ from the Suzhou and Tianjin projects, which are developments in a particular city or locality.

The two sides are exploring the areas of modern connectivity and modern services for this project and "when you talk about the western region, we are talking about connectivity within the region... and outside the region".

"So, it needs to look a bit wider than a specific locality. I think that's one of the differences between the western region project and the other government-to-government projects that we have done," he said.

Mr Teo also touched on the "good and positive" relationship between China and Asean, and how Singapore will strive to contribute to these ties in its role as coordinator of the China-Asean Dialogue from July next year.


Park with 'S'pore DNA' a model for urbanisation push
By Kor Kian Beng China Bureau Chief In Suzhou, The Straits Times, 25 Oct 2014

THE anniversary posters are lining the streets and commemorative activities are set to be rolled out to mark the 20th year of the Sino-Singapore Suzhou Industrial Park (SIP) later this month.

But the celebratory mood has been dampened by recent news that two Chinese officials of the flagship bilateral project's joint venture firm might have engaged in corrupt activities.

Graft investigations were launched last month against Mr Du Jianhua and Mr Bai Guizhi, former chairman and former chief executive of China-Singapore Suzhou Industrial Park Development Group (CSSD), respectively.

The probes have sparked worry among some people, including Mr Ray Kung, CEO of GCoreLab. The Singapore firm set up shop in the SIP recently to produce electric buses, and Mr Kung fears the probes might slow his firm's growth, particularly with the loss of Mr Du, who was "one of the potential lobby officials for electric vehicles".

For now, observers believe the probes should have little impact on the SIP and the CSSD, pointing out that Mr Bai was with the company for only three months and Mr Du was not involved in its daily running in his chairman role.

Still, the two cases show the selection of officials for top jobs can be improved - a point that Mr Yang Zhiping, head of the SIP Administrative Committee, made in a recent interview.

Anti-graft work will be one of several challenges the SIP has to tackle as it celebrates its success in commemorative activities attended by Singapore Deputy Prime Minister Teo Chee Hean and Chinese Vice-Premier Zhang Gaoli. They will also chair meetings of the Joint Council for Bilateral Cooperation and Joint Steering Councils for SIP and Tianjin Eco-city on Monday.

What else does the SIP need to do to maintain its edge and relevance to China and Singapore amid changing economic needs?

Chequered past

THE SIP was launched in 1994 as the first government-to-government project for Singapore to share industrialisation expertise with China.

A 288 sq km area, about a third of Singapore's size, was designated in eastern Suzhou, of which 80 sq km belonged to the China-Singapore cooperation zone. Singapore held a 65 per cent stake in the CSSD, and China the rest.

Mr Khor Poh Hwa, CSSD's deputy CEO overseeing infrastructure from 1996 to 1997, said "we had to introduce our Singapore way of open tender, transparent tender evaluation and approval system and adapt them for SIP".

But the SIP struggled to attract investments and had losses of US$77 million in its first seven years. A key reason was a rival park - Suzhou New District - that the local government was pushing to foreign investors.

Several factors led to the SIP's turnaround from 2001 and it has not looked back since. One was Singapore cutting its stake to 35 per cent to incentivise the local government to support the SIP. Its stake now is 28 per cent. Another was greater support by the Chinese government from 2001.

Tackling new challenges

PROFESSOR Ren Hao, dean of Tongji University's Development Research Institute, said many industrial parks are emulating the SIP in building good infrastructure and better meeting the needs of enterprises and residents.

He cited several challenges for the SIP to become the "2.0 version of industrial parks". One area is building up public institutions to deliver quality services to enterprises and residents.

"The SIP needs to create better synergy between industries for them to work together and not individually," he added, citing the need to create eco-systems for companies with upstream and downstream vendor supply.

The challenge, it seems, lies in striking a good balance.

Space constraints and rising labour costs have prompted the SIP to move labour-intensive industries out and attract high-tech industries such as bio-medicineand service industries like logistics, said Mr Yang.

But Mr Jin Zhifeng, 42, chairman of SJEC Corp that makes lifts and escalators and moved into the SIP in 1998, said there should be an eco-system of large firms and small vendors. Otherwise, transport costs could rise if small firms cannot enter or have to move out.

Some cited the need to further streamline the SIP's bureaucracy.

Ms Rong Zi, 65, who has three clinics in the SIP, notes how she has to submit 87 different forms to get a foreign doctor permit. "This surely can be improved."

Keeping the Singapore DNA

AS IT changes to cope with new challenges, many say the most crucial factor for the SIP is to maintain its Singapore DNA, including traits like administrative efficiency, good infrastructure and a focus on talent - all the key factors that helped the SIP succeed in attracting and keeping firms.

Mr Mathia Nalappan, vice-president for global business at Singapore IT firm NCS, praised the SIP for its talent-recruitment drives in universities across China. Taking part in these drives helped NCS grow its SIP staff from 20 in 1998 to over 900, he added.

Mr Tan Tze Shang, regional general manager for Greater China at The Ascott Limited, which has three properties in SIP, believes the park owes its success largely to "an efficient and capable" management that provides good quality service.

Assistant CEO Yew Sung Pei of International Enterprise (IE) Singapore said the SIP has to maintain its "mature and sophisticated operating environment", useful in test-bedding new technologies and innovative ideas and in piloting China's reform policies.

Overall, there is optimism over the SIP's continued relevance to China and Singapore.

Prof Ren said the SIP is a useful model as China builds industrial parks in countries like India.

The SIP's usefulness has also risen in China's new urbanisation push that focuses more on meeting the needs of the people and enterprises instead of blindly building new cities in the hope that people would come, said CSSD chairman Zhao Zhisong. "The SIP is a good example of the new-type urbanisation model - with our emphasis on urban planning and meeting the people's needs."

By Kor Kian Beng, The Straits Times, 25 Oct 2014
- Origins: The park began in 1994 as a bilateral project for Singapore to share industrialisation experiences with China and was backed by former Singapore prime minister Lee Kuan Yew and late Chinese strongman Deng Xiaoping.
Suzhou was picked for its proximity to the Shanghai financial hub and its educated, skilled talent pool. A 288 sq km area, about a third of Singapore's area, was designated for the Suzhou Industrial Park (SIP).
- Success: The SIP is ranked the second-best industrial park in China and regularly tops developmental indexes.
Its gross domestic product last year was 190 billion yuan (S$40 billion), up from one billion yuan in 1994. With 3.4 per cent of Suzhou's land area and 5.2 per cent of its population, it contributes 15 per cent to the city's economy.
- Challenges: Due to land constraints and rising costs of doing business, it has needed to move up the value chain.
Low-end, labour-intensive industries like electrical manufacturing are being replaced by high-tech and service industries like nanotechnology and finance. Better vetting of officials for top jobs is a new challenge after two officials were placed under anti-corruption investigations.

Replicating the SIP model in China
By Kor Kian Beng China Bureau Chief In Chuzhou (Anhui), The Straits Times, 25 Oct 2014

"BUILD as we plan" is how it is done in most of China's industrial parks and what Anhui official Wu Bin did too when he headed the Langya Economic Development Zone in Chuzhou city.

But the lack of urban planning led to wastage of public resources, such as a newly built, 30 million yuan (S$6.2 million) road junction that had to be removed to make way for a multi-billion yuan automotive plant.

Now, after working in the Suzhou-Chuzhou Modern Industrial Park (SCP) since 2012, Mr Wu sees the importance of urban planning through his role as the project's deputy head overseeing infrastructure development.

The SCP - a joint project of the SinoSingapore Suzhou Industrial Park's (SIP) venture firm and the Chuzhou government - has spent 30 million yuan on 22 urban planning studies on areas such as roads, electricity generation and recreation zones, he said.

"I now have a new understanding of how things should be done," said the Chuzhou native.

Mr Wu's change shows how the SIP is fulfilling its long-term goal of sharing Singapore's industrialisation expertise and "software" across China.

SIP's joint venture firm, China-Singapore Suzhou Industrial Park Development Group (CSSD), began doing so with two projects in Jiangsu province: Suqian-Suzhou Industrial Park in 2007 and Suzhou-Nantong Science and Technology Park in 2009.

The SCP, which broke ground in April 2012, is the CSSD's first venture outside Jiangsu, and key traits of the SIP could be seen in the 36 sq km park when The Straits Times visited recently.

For instance, it is near Chuzhou city's old district, just like how the SIP is next to Suzhou city's old town.

Mr Tang Yanzhe, president of the CSSD subsidiary that holds a 56 per cent stake in the SCP, said proximity is important in ensuring a readily available pool of workers and residents.

This makes it appealing to enterprises setting up factories or property projects.

So far, the SCP, which has attracted 38 firms investing 1.7 billion yuan, has received rave reviews. Many investors cite its Singapore link and the SIP reputation as reasons for moving there.

Mr Yang Bin, factory director for Chuzhou Jinfu Credit and Technology, which makes optical display films among other things, said it did not look further than the SCP as it had been operating in the SIP since 2003 and was happy with the "Singapore-style" pro-business treatment there.

The SCP's geographical advantage is a key factor. It is linked by high-speed rail to Beijing, four hours away, and Shanghai, 90 minutes away.

The CSSD plans to explore more opportunities like the SCP, said Mr Tang. "Also, we have the expertise to meet a need in the market," he added.

Other key joint projects
By Rachel Chang, The Straits Times, 25 Oct 2014


Goal: The second Sino-Singapore government-to-government project aims to develop an environment friendly city as a model of sustainable development. Begun in 2008, an 8 sq km start-up area of the 30 sq km zone was completed in 2013.

Current status: 15,000 residents and around 1,300 firms have moved in.

Key challenges: Development was hampered by delays in the building of transport links. Construction of two semi-express rail lines linking it to the rest Tianjin will begin at year-end.


Goal: The first bilateral project led by the private sector aims to attract knowledge-intensive, high-tech industries. Building of the 123 sq km zone began in 2010, with the start-up area of roughly 8 sq km to be completed in 2017.

Current status: The resettlement of local residents and construction of basic infrastructure, a centrepiece lake and lakeside park have been completed.

Key challenges: The 2008-2009 financial crisis delayed the progress of the GKC as private investment slowed for a few years.


Goal: The private sector-led project aims to provide Singaporeans with secure food supplies and apply Singapore food-hygiene standards to Chinese manufacturers. Building of the 1,450 sq km food zone began in 2012.

Current status: Some 10 Chinese firms have invested 11 billion yuan (S$2.3 billion).

Key challenges: Singapore players have been reluctant to invest as they are concerned about the minus 20 deg C winters and the zone's lack of accessibility.


Goal: A private sector-led project to build up knowledge-intensive industries such as digital media in China's west. The 10 sq km project broke ground in 2012.

Current status: 10 firms, four of which are Singaporean, have invested over 10 billion yuan.

Key challenges: China's west is less developed than its coastal provinces, with fewer transport links, less skilled labour and poorer expatriate amenities.

Legacy of Suzhou experience
Editorial, The Straits Times, 3 Nov 2014

THE 20th anniversary of the China-Singapore Suzhou Industrial Park (SIP) holds lessons for both countries. For Singapore, the park offered an opportunity to develop an external wing for its economy by overcoming its land and labour constraints. For China, it provided space in which to localise Singapore's successful record of industrialisation. Developed jointly by consortia from the two countries, the SIP has combined their key competitive advantages to distinguish itself as a Chinese industrial park with Singapore characteristics.

This outcome was hobbled when the local government offered a rival park to foreign investors, to the detriment of the SIP, which suffered losses in its initial years. But its fortunes changed when Singapore cut its stake in it, and the Chinese government weighed in with greater support as well. Singapore's experience of dealing with the realities of Chinese power - spread over central, provincial and local governments - stood it in good stead as it refashioned its Suzhou strategy.

For China, the injection of Singapore's developmental DNA into local soil added to the wider phenomenon of urbanisation. This is so widespread in China today that it could obscure images of what Suzhou was like in the 1990s before it was transformed into a modern bustling city. Chinese who take the long view of economic history, since their country's opening up to the world in the 1980s, would not ignore the role played by the SIP in a modernisation process that has caught the global imagination.

Tianjin Eco-City, another bilateral project, shows that the SIP was not a one-off initiative but a continuing part of Singapore's long-term investment in the emergence of a China that could wed its vast geographical and demographic resources to the demands of being an economic great power. Iconic successes such as Suzhou add to China's credentials as it wins appreciation for its developmental model in the Third World. This is the true legacy of projects like the SIP.

Singapore, too, has gained by becoming the largest and busiest yuan centre outside China as companies in both parks take yuan loans from banks in Singapore. A third state-to-state project has been mooted, expected to be located in one of three western cities: Chongqing, Chengdu or Xi'an. Wherever its location and whatever the degree of private-sector involvement, the initiative reaffirms the logic of economic cooperation that has drawn the two countries closer. The launch of direct currency trading, set to reduce the cost of doing business, reveals the unfolding possibilities of that cooperation. Suzhou helped to pave the way to this level of economic trust.

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