Suzhou Industrial Park
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The China-Singapore Suzhou Industrial Park (中国——新加坡苏州工业园区, SIP) is an industrial park built in Suzhou, China with significant Singaporean input. In the late 1990s, the heavy losses incurred by the park caused a minor scandal in Singapore.[1]
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[edit] Background
As China's modernization drive gained momentum in the late 1980s, many Chinese delegations visited Singapore, a southeast Asian nation that achieved economic miracle within 30 years of independence. The Chinese visitors were eager to learn modern management methods, while Singapore was also planning Economic Regionalization, which focused on overseas investment.
In 1992, the idea of developing a modern industrial township with Singapore experience was broached. During his tour of southern China that year, China's late paramount leader Deng Xiaoping said: "Singapore enjoys good social order and is well managed. We should tap on their experience, and learn how to manage better than them."
After rounds of discussions and site surveys, both governments decided to join hands in developing a modern industrial park in the east of Suzhou. The China-Singapore Suzhou Industrial Park (CS-SIP) was thus born on Feb. 26, 1994 when Chinese Vice Premier Li Lanqing and Singapore Senior Minister Lee Kuan Yew signed the Agreement on the Joint Development of Suzhou Industrial Park in Beijing.
[edit] Controversy
The park was built near-simultaneously with the competing Suzhou New District (SND) industrial park. As the Suzhou city government had only a minority (35%) stake in the SIP, while they had a major stake in SND, the city government largely ignored the SIP and concentrated on promoting the SND instead.
After incurring losses of some US$90 million over 5 years[2], the Singapore consortium lowered its stake to 35 percent, raising the Chinese consortium's stake to 65 percent from 35 percent and reducing the Singaporean share from a planned 70 sq.km. to just 8 sq.km[1]. The Chinese side appointed Wang Jinhua, vice-mayor of Suzhou and the former manager of the New District, as the new chief executive. One year after Singapore lowered its stake, the park made its first profit of $3.8 million[3].
[edit] References
- ^ a b "Suzhou project: wounded pride". Ben Dolven, Far Eastern Economic Review, July 8, 1999.
- ^ "Losses in Singapore Suzhou project to hit US$90 million", Agence France-Presse, September 15, 1999
- ^ "The new frontier". Ben Dolven, Far Eastern Economic Review, December 6, 2001.
