Suzhou Industrial Park ex-CEO probed for corruption

From ‘Ex-CEO of Suzhou Park in graft probe’, 21 Sept 2014, article by Kor Kian Beng, Sunday Times

Suzhou Industrial Park’s former chief executive officer Bai Guizhi, a Chinese national, has been investigated for graft, in the most serious scandal to hit the first bilateral project between China and Singapore.

….SIP’s administrative committee, an arm of the Suzhou city government overseeing the project, is believed to be responsible for Mr Bai’s appointment and that of other key posts in the industrial park.

CSSD chief executives were Singaporeans from 1994 to 2000, when a Singapore consortium held a majority 65 per cent stake in SIP – which was set up with the backing of Singapore’s former prime minister Lee Kuan Yew and the late Chinese strongman Deng Xiaoping. The key goal of the 288 sq km industrial park was to replicate Singapore’s industrialisation expertise and to transfer the Republic’s “software” and way of doing things to Suzhou and other cities.

From Jan 1, 2001, Chinese nationals were appointed as CEOs after a loss-making streak in SIP saw Singapore shrinking its stake to 35 per cent and its share of the park to just 8 sq km, instead of the 70 sq km planned. Things have picked up for SIP. It has become one of China’s most successful industrial parks, and garnered international awards.

A Singapore consortium now holds a 28 per cent stake in the CSSD.

To mark 20 years of the ‘special and long-standing friendship‘ between Singapore and Suzhou, the city’s mayor planted 5 Osmanthus flowers (the official flower of Suzhou) at the Gardens by the Bay. Things, however, haven’t been all rosy since its inception in 1994, this sprawling lovechild of LKY and Deng Xiaoping. The latest graft incident would be what our esteemed elder statesman would refer to another of the Chinese government’s ‘municipal shenanigans’. Despite all the ‘teething problems’ which LKY had with the Chinese authorities, Suzhou has been flourishing since, even winning the ironically titled Lee Kuan Yew World City prize recently, despite us having a physical presence of just 8 sq km.

Here are some interesting tidbits about our maiden ‘bilateral’ project:

1. Singapore’s social order was an inspiration for Deng Xiaoping, who in 1978 called us a ‘capitalist version of the COMMUNIST dream’, before the SIP program began. Yet any mention of communism in our media today gets slammed and banned by the government, as what happened to a recent documentary by Tan Pin Pin.

2. The SIP’s estimated cost was $30 billion. For 4 years since it was set up, it was making losses of up to US $24 million annually. Our flagship ‘government to government’ cooperative wasn’t exactly off to a flying start.

3. Lee Hsien Loong disclosed in 1998 that 10 of the 24 companies of the Singapore consortium were government-linked companies and statutory boards. $115 milion was pumped in.

4. In 1998, city vice mayor Wang Jinhua told a group of German investors to pump their money directly into rival and precursor industrial park SND (Suzhou New District), which was run by local authorities, without involving Singapore. LKY complained to President Jiang Zemin about it, despite the situation in China being a case of ‘The mountains are high and the emperor is far away’.

5. The founding CEO of the Suzhou project was former MP Chan Soo Sen. He went on to become Independent Director of a company that calls itself MIDAS Holdings.

6. 2001 was the year Singapore ceded management duties over to the Chinese government. The NY times called it a ‘face-saving’ exercise. LKY blamed the Chinese government for promoting SND instead. Other political observers surmised we had no bloody idea what we were getting into. I believe there’s another Chinese saying for ‘small fry in a big pond’. LKY expected ‘special treatment’ for his baby, but wasn’t prepared for the reality that is, well, competition, underhanded as it may be.

7. The Economist referred to the SIP as an attempt to ‘clone’ Singapore in a Chinese city. Other extensions of our ‘software replication’ would sprout up in Tianjin and Vietnam. In May rioters set fire to 3 factories in the Vietnam-Singapore Industrial Park complex. Seems like the ‘software’ was not flameproof.

8. In 2009, despite his disappointment with Chinese business practices, LKY maintained that SIP was the ‘right decision’. Not sure if it was ‘right’ for bilateral relations,  or ‘right’ for Singaporeans in general, especially since to the layman, the Suzhou incident appears to be a case of the Chinese ‘borrowing’ our ideas and hijacking the Singapore brand, then running off with it, applying our ‘software’ to copycat cities to the tune of billions of dollars; i.e it turned out ‘right’ for the Chinese. Then every 10 years, they come down and plant token flowers in our $1 billion garden. Which is NICE, rather than just ripping us off like this thing they did with Apple without giving credit where credit’s due.

Success or flop, there are take-home lessons from our experience with SIP, yet our government continues to woo China like an infatuated puppy, still stuck in its Sinophilia, insisting that the SIP was a resounding masterstroke of the genius that is LKY despite the apparent ‘glitches’ in the software. A Guangzhou Knowledge City is in the pipeline as we speak, lauded as one ‘driven by the private sector’ unlike the previous projects, which is in fact a 50:50 venture involving Temasek Holdings-owned Singbridge International. The man in charge? Wong Kan Seng, who had always believed that there was ‘money to be made‘ in China. Isn’t that the guy who…never mind.

If the SIP and similar ventures were products you could pick up off the shelf, you can be certain that it’ll say ‘Made in China’ on the labels, and next time when a foreigner asks you if Singapore is ‘somewhere in China’, he wouldn’t be totally off the mark. Maybe it’s time for some software updates and bug fixes, before we go around pointing to SIP and claiming credit like an excited kid telling his parents that this entire city would never have existed if he hadn’t built a Lego model to inspire it from the beginning.

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2 Responses

  1. […] To mark 20 years of the ‘special and long-standing friendship‘ between Singapore and Suzhou, the city’s mayor planted 5 Osmanthus flowers (the official flower of Suzhou) at the Gardens by the Bay. Things, however, haven’t been all rosy since its inception in 1994, this sprawling lovechild of LKY and Deng Xiaoping. Despite all the ‘teething problems’ which LKY had with the Chinese authorities, Suzhou has been flourishing since, even winning the ironically titled Lee Kuan Yew World City prize recently, despite us having a physical presence of just 8 sq km. Here are some interesting tidbits about our maiden ‘bilateral’ project: 1. Singapore’s social order was an inspiration for Deng Xiaoping, who in 1978 called us a ‘capitalist version of the COMMUNIST dream’, before the SIP program began. Yet any mention of communism in our media today gets slammed and banned by the government, as what happened to a recent documentary by Tan Pin Pin. 2. The SIP’s estimated cost was $30 billion. For 4 years since it was set up, it was making losses of up to US $24 million annually. Our flagship ‘government to government’ cooperative wasn’t exactly off to a flying start. 3. Lee Hsien Loong disclosed in 1998 that 10 of the 24 companies of the Singapore consortium were government-linked companies and statutory boards. $115 milion was pumped in. 4. In 1998, city vice mayor Wang Jinhua told a group of German investors to pump their money directly into rival and precursor industrial park SND (Suzhou New District), which was run by local authorities, without involving Singapore. LKY complained to President Jiang Zemin about it, despite the situation in China being a case of ‘The mountains are high and the emperor is far away’. 5. The founding CEO of the Suzhou project was former MP Chan Soo Sen. He went on to become Independent Director of a company that calls itself MIDAS Holdings. 6. 2001 was the year Singapore ceded management duties over to the Chinese government. The NY times called it a ‘face-saving’ exercise. LKY blamed the Chinese government for promoting SND instead. Other political observers surmised we had no bloody idea what we were getting into. I believe there’s another Chinese saying for ‘small fry in a big pond’. LKY expected ‘special treatment’ for his baby, but wasn’t prepared for the reality that is, well, competition, underhanded as it may be. 7. The Economist referred to the SIP as an attempt to ‘clone’ Singapore in a Chinese city. Other extensions of our ‘software replication’ would sprout up in Tianjin and Vietnam. In May rioters set fire to 3 factories in the Vietnam-Singapore Industrial Park complex. Seems like the ‘software’ was not flameproof. 8. In 2009, despite his disappointment with Chinese business practices, LKY maintained that SIP was the ‘right decision’. Not sure if it was ‘right’ for bilateral relations, or ‘right’ for Singaporeans in general, especially since to the layman, the Suzhou incident appears to be a case of the Chinese ‘borrowing’ our ideas and hijacking the Singapore brand, then running off with it, applying our ‘software’ to copycat cities to the tune of billions of dollars; i.e it turned out ‘right’ for the Chinese. Then every 10 years, they come down and plant token flowers in our $1 billion garden.  […]

  2. […] to the article “Suzhou Industrial Park ex-CEO probed for corruption” (Sunday Times, Sep 21, 2014) – “Suzhou Industrial Park’s former chief executive officer […]

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