With typical hubris and arrogance, LIE KY tried to teach China how to build residential-industrial towns, but got a few lessons instead, losing billions
Photo Gallery: The China-Suzhou Industrial Park
April 11, 2009 by admin
The China-Suzhou Industrial Park (SIP) was set up in 1994 at the outskirts of the Suzhou City in Jiangsu province with the help of Singapore funds and expertise. Singapore owned a 65% stake in the park.
Even as the park was being constructed, the Suzhou City government set up Suzhou New District Industrial Park (SND) right next to SIP. It was the exact replica of the Singapore model.
As the Suzhou City government had a majority stake in SND, it largely ignored the SIP and concentrated on promoting the SND instead.
After incurring losses of some US$90 million over 5 years, 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
One year after Singapore lowered its stake, the park made its first profit of $3.8 million.
A 3 room unit here now cost more than RMB$1 million.jpgmillion.jpg" src="https://ec.yimg.com/ec?url=http%3A%2F%2Fwayangparty.com%2Fwp-content%2Fgallery%2Fsuzhou%2FA%25203%2520room%2520unit%2520here%2520now%2520cost%2520more%2520than%2520RMB%241%2520million.jpg&t=1490902330&sig=e5ZBIFv6aoBlfIFQdD36.g--~C">
The Suzhou Industrial Park (SIP) is located about 20km from the city. The place where it was built was previously farmlands and it is now transformed to a “mini Singapore”.
When it first opened for business, few Singaporeans and even the Chinese themselves want to be posted here. There were limited housing and amenities were far and few.
Now the surrounding has been transformed into a sprawling satellite town with posh condominiums, restaurants, shopping districts, parks and even elite schools.
The streets are squeaky clean just like Singapore and the roads are lined with trees and shrubs. Homegrown brands such as Breadtalk, Subway and Bee Cheng Hiang are ubiquitous here.
The Chinese learnt the ropes very quickly. Whereas the park was run chiefly by Singaporeans, Hong Kongers and Taiwanese, it is now managed by Chinese managers from Suzhou itself and the neighboring cities of Shanghai, Wuxi and Hangzhou.
The monthly salary of a mid-level Chinese executive ranged from RMB$10,000 to RMB$25,000, more than enough for one to live relatively comfortably in Suzhou where the cost of living is much lower than Singapore.
Early MNCs set up their factories at SIP because they trust the brand name of Singapore. However, the Chinese soon wooed them over to their SND with offers of better perks and incentives.
Both SND and later on the SIP are resounding successes for the Chinese, but not for Singapore which has lost quite substantially from its initial investment.
Singapore businesses find it harder to establish a foothold in China compared to the Hong Kongers and Taiwanese because we are too rigid in playing by the rules.
In China, “guan xi” or relations is more important than going through proper channels. Many business deals are closed over a drink in a KTV lounge.
The Suzhou Industrial Park was a good project for Singapore to tap on the growing market and cheap labor of a China which is rapidly modernizing. Unfortunately, we went in too hastily when we have little insight into their culture and thinking.
On hindsight, Singapore should have set up a pilot project on a smaller scale first to study its feasibility before pumping in so much money to impart our expertise and experience to the Chinese.
RH: MY ACQUAINTANCE, MR DAVID DUCLOS, A FORMER POLICE INSPECTOR, AND HIS LAWYER FRIEND, EYEWITNESSED LEE KUAN YEW RIGGING THE 1997 CHENG SAN GRC ELECTION. READ MORE AT MY BLOG ENTITLED "I CAME, I SAW, I SOLVED IT" :
[ALSO AT THE ABOVE BLOG, LIE KUAN YEW's LIES, CORRUPTION, WRONGFUL JAILING, TORTURE AND BEATING TO DEATH OF INNOCENT POLITICAL PRISONERS LIKE MR CHAN HOCK HUA]
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