Nothing wild about the Frontier City
03 December 2007
The China-Singapore Suzhou Industrial Park - frontier city of global economy and high technology. Gordon Wong describes the effect the ‘city’ has had.
China and Singapore: two economic powerhouses, and a match made in heaven? China’s fast growth, dynamic evolution, and increasingly creative and innovative workforce, set alongside Singapore’s cutting edge modern management methods, economic regionalisation and associated programmes that have made it the economic miracle that others across the globe observe with envy, would appear to be the best of both worlds.
On paper, there is a lot to make such a match successful. Both countries have a go-get’em mentality; Singaporeans are somewhat fond of saying “can do” at every opportunity, while China is becoming familiar with approaches from overseas investors to collaborate in technology, design and manufacturing programmes. They have a common –- spoken at least –- language, and already a significant history of technology and workforce transfer.
With this as a backdrop therefore, it was not such a huge surprise to see the birth and implementation (in 1994) of the China-Singapore Suzhou Industrial Park (CS-SIP) project in Suzhou, two hours drive from Shanghai. On the face of it, anyone visiting this impressive industrial park for the first time would find it difficult to argue that it doesn’t contain some of the latest technologies and design and manufacturing practices on the globe; that’s almost a given. What’s most impressive, arguably, is the way that global technologies and techniques have been assimilated so seamlessly into a Chinese landscape, figuratively and literally.
In the cutting-edge plants across the site, Chinese engineers are working side by side with their principals, partners and counterparts from across the globe, learning and advancing in their respective niche areas. It is home to many globally-recognised electronics OEMs, parts suppliers and EMSs, including Flextronics, Philips, Du Pont, Fairchild Semiconductor, Gec Alsthon, Sony, Sharp, Yokogawa, Siemens, Mitsubishi, and National Semiconductor, and as such is the most significant bilateral collaboration between Singapore and China to date.
With the strong support from both governments, and accommodating more than 600,000 people, CS-SIP has made significant progress over the years. Although it accounts for only 3% and 4% of Suzhou's land and population respectively, CS-SIP makes up 20% of Suzhou's foreign direct investment and total import/export, and 15% of Suzhou's GDP and financial revenue.
Today, the CS-SIP is a recognised as a world class model for international cooperation, and having overcome some initial teething problems, the statistics generated since its inception are compelling. The CS-SIP is home to more than 50 of the Fortune 500 companies and the average investment of US$31 million per project (US$1.48 billion per km2) is the highest in China. There are 55 projects with an investment of over a hundred million dollars each and amongst them 6 projects are over US$1 billion each.
Preferential Terms
So, who can and should invest in the China-Singapore Suzhou Industrial Park? While the CS-SIP was originally awarded the same status as China’s five Special Economic Zones (SEZs) and Pudong in Shanghai, the status of these SEZs has evolved somewhat over the years. That said, investors in the Park do enjoy special investment terms such as corporate income tax rate of 15% instead of the national average of 33%, exemption of local income tax of 3%, and rebates. Further, those with an operation period of more than 10 years can enjoy two years ' exemption and three years' half reduction of corporate income tax from the first profit-making year. The CS-SIP also provides preferential support to IC design and manufacture, and software research and development.
Wholly foreign-owned manufacturing enterprises are allowed, domestic sales are permitted, and financial institutions and retail companies are permitted to set up businesses in the Park.
In short, CS-SIP adapted the urban township concept and management experience of Singapore and other countries, taking Chinese conditions into account. It also adapted Singapore's experience in environmental protection, human resource management and other fields. The administrators of the CS-SIP created a master plan based on the principle of easy entry, low rent, good service and comprehensive functions. The park was designed, not only to be an excellent place to invest, but also a great place to live, work and study. Infrastructure and utilities projects were developed to world class standards at a cost of about US$3.63 billion.
Having conceived, developed and successfully implemented such a major project, China has clearly demonstrated its ability to take input and ideas from its economic partners, in this case Singapore, and create a forward-looking platform that benefits the country as well as its overseas investors. The CS-SIP is a true success story, and as such an impressive model for future techno-economic projects.
Can do? Will do.
Contact Details and Archive...
Most Viewed Articles...