Introduction
China-Singapore Suzhou Industrial Park (SIP) is a high-profile bilateral cooperative project between the governments of China and Singapore. On 26 February 1994, Chinese Vice-Premier Mr Li Lanqing and Singapore Senior Minister Mr Lee Kuan Yew signed the Agreement on the Joint Development of Suzhou Industrial Park in Beijing.
Suzhou is about 80 km to Shanghai Hongqiao Airport, 120 km to Shanghai Pudong Airport and 200 km to Nanjing Airport. The Hu-Ning (Shanghai to Nanjing) expressway connects Suzhou to Shanghai.
Shanhai Port is an important port for SIP. About 70% of goods produced in SIP are imported or exported via Shanghai Port. One of the biggest container ports along the Yangtze River and 90 km from SIP, Zhangjiagang Port is another important port for SIP. Enterprises in SIP also use Changsu Port, an investment by Singapore's PSA Group.
The core district of SIP has an area of 70 km 2 and is co-developed by the two governments. The master plan leverages on the advanced urban development experience of Singapore and other countries in the world.
To boost its export business, China-Singapore Suzhou Industrial Park Export Processing Zone (SIPEPZ) was established on 27 April 2000. It is one of 15 experimental export-processing zones that enjoy the convenience and privileges of "operating within the borders yet without customs declaration".
SIPEPZ covers an area of 2.9 km 2 and is to be developed in three phases. Development of the first phase of 41 ha has been completed and 15,000 m 2 of ready-built factory space has been occupied ever since it was ready in April 2001. SIPEPZ is among the best-performing export processing zones. Despite the negative effects of Sars in the first half of 2003, the value of import & export products reached USD 222 million, nearly four times the value in same period in 2002.
Investment Climate
Infrastructure and utilities projects have been developed to world-class standards. China-Singapore Suzhou Industrial Park Development Co. Ltd., or CSSD, a joint venture between a Chinese consortium and a Singaporean consortium, is the organization that takes charge of the development of the overall township.
Infrastructure development, costing about RMB 30 billion (USD 3.63 billion) by June 2004, had laid superior conditions for investment.
Besides superior infrastructure, another advantage of SIP is the management style infused by the Singapore partners. Under the master plan, SIP is free to adapt or adopt the urban township concept and management experience of Singapore and other countries, taking into account current Chinese conditions. It is the only project in China that involves comprehensive "software" transfer, ranging from master planning, investment promotion, as well as public administrative policy, for the creation of a pro-business environment.
SIP has adapted Singapore's experience in urban construction, environmental protection, human resource management and other fields. For example, SIP adopted Singapore's Central Provident Fund concept requiring both employers
and employees to set aside a percentage of monthly salary for workers' retirement, and then adapted it to suit local conditions.
The name of Singapore itself has become the most valuable asset for
SIP. In the past 30 years, Singapore has built a relationship based on trust
with MNCs through long-time cooperation. The country, though small, is host to the regional headquarters of many MNCs. When these MNCs then moved their
production bases to China, SIP was a natural option.
Today, SIP has one of the highest values of foreign investments among industrial parks in China. By the end of March 2004, 1,400 foreign invested projects had been approved, with total contracted FDI of USD 16.1 billion, and accumulated FDI reaching USD 6.93 billion. 52 Fortune 500 companies had introduced more than 70 projects into the Park. The number of projects with investment above USD 100 million was 45 and the number of projects with investment above USD 1 billion was 10. Semiconductor, optic-electronic technologies and mechanical-electronic technologies have formed a relatively complete production chain, and become the cornerstone of SIP.
SIP is not only attractive to foreign investors, it is also gaining the confidence of Chinese entrepreneurs. One of the latest companies to set up in SIP is China's No. 2 PC company, Founder Group. In early 2004, it decided to establish its largest production plant here, with the aim to produce 6 million units of PC a year. It will be the biggest production base for IT products in Asia with an annual output value of more than RMB 25 billion (USD 3.02 billion).
With a population of 5.8 million, Suzhou offers a rich pool of talent. It produces about 20,000 graduates annually from universities, polytechnics, and vocational training schools.
Suzhou also has a one-millionstrong, generally well-educated and diligent industrial workforce. Nonetheless, to better meet investors' needs for senior skilled workers, SIP has set up its own training center - Institute of Vocational Technology (IVT). The Institute fully adopts Singapore's Nanyang Polytechnic's experience in vocational training and software management. Its graduates, trained in the areas of industrial electronics, modern communications, mechatronics and precision engineering, have even been headhunted and recruited by SIP investors prior to graduation.
Besides positioning itself as a production powerhouse, the administration of SIP has developed good living conditions in order to attract talent. They have created a social environment, for employees in the SIP to enjoy working in the Park and so that family members can spend time together. The Park is one of the youngest and most vigorous development zones in China. When fully developed, it will accommodate 600,000 people and provide 360,000 job opportunities.
To further reduce investment costs, SIP has adopted an independent financial administration system and is actively promoting a "zero fee" policy: More than 100 fees and charges have been removed (only eight charges for mandatory fees stipulated by State, Provincial and Municipal governments are kept).
