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Suzhou failure project
#1
Anyone heard about the story before? We build an expensive model for the Chinese to learn.

New York Times:
Quote:SINGAPORE— It seemed like a fine idea when Singapore agreed with China in 1994 to build a giant $30 billion industrial park in the eastern Chinese city of Suzhou to serve as a model for attracting foreign investment to the world's most populous nation.

Five years later, the venture is heavily in debt — undermined by local officials who set up a rival park close by, forcing Singapore to cut its interests in the original project, Singapore officials say.

Singapore's senior minister, Lee Kuan Yew — who played a leading role in the effort to replicate the island-state's capitalist-style efficiency in the industrial heartland of China — conceded this week that the project had not turned out as planned and had made him more cautious about investments in China.

He pointed to the difficulties that arose in signing agreements with the central government that were then implemented by local officials who "have their own imperatives."

The China-Singapore Suzhou Industrial Park, which was intended eventually to become a self-contained manufacturing, urban and high-technology center covering 70 square kilometers (27 square miles), was a joint project with the Chinese central government in Beijing. But it ran into trouble when local officials began a rival operation, the Suzhou New District industrial park.

Mr. Lee said the city government was "using us to get investors in, and when investors came in, they said: 'You come to my park, it's cheaper."'

The Singaporean chief executive officer of the China-Singapore park said recently that the park had lost an average of $23.5 million a year since 1994 and that its loss would reach $90 million by the end of 2000

The project was supposed to transfer Singapore's management skills to Chinese bureaucrats and to teach China how to build and run "business-friendly" commercial parks.

But it ended up straining the close relations between Singapore and China and bringing home to Singaporeans the often unpredictable, and sometimes underhand, business culture of the Communist mainland.

In June, after it failed to persuade Suzhou officials to throw their weight behind the Singapore-built park, Singapore signed a memorandum of understanding with the government in Beijing under which the majority stake and management control over the park would be transferred from the Singaporean to the Chinese side Jan. 1, 2001.

As a result of this face-saving exercise, Singapore's share in the venture will be reduced to 35 percent from 65 percent, with Beijing becoming the dominant partner.

Singapore says it tried the get authorities in Suzhou to suspend marketing of their industrial park for five years, making the Singapore-built park the only focus of development for the city for that period. But the officials refused.

Suzhou officials are putting a rosy gloss on the affair, which has reportedly embarrassed the central government. Indeed, the Chinese side reports that the project is profitable, despite the Singaporean claims of losses.

The official China Daily on Tuesday quoted Chen Ming, the Chinese deputy director of the park's administrative committee, as saying it was expected to earn a profit of 600 million yuan ($72 million) in 1999, rising to 800 million yuan in 2000. The paper said the park had attracted foreign-investment commitments totaling $6.4 billion by August.

"The success should be credited to the smooth cooperation between the Chinese and Singaporean partners," the China Daily quoted Xie Jiabin, director of the administrative committee, as saying.

But Mr. Lee, on a visit to the park a couple of days earlier, told local officials that he would invite President Jiang Zemin of China to visit it by the end of 2000 so that he could officially hand over the completed first eight square kilometers of the venture to the Chinese leader.

"Both sides will have to work hard to make it a real success, not a window-dressing exercise," Mr. Lee said. "Now, the initiative, the impetus, must come from you."

He said it was still possible to make the park a success under the new arrangements reached in June, adding that such success would be evident when investors said the Chinese side was running the park better than the Singaporean team.

"They are the ones who will decide if foreign investments will continue to come into the SIP," Mr. Lee said. He added that it was essential that the Chinese side find the best managers to run the park after Singapore transferred the majority stake and management control at the start of 2001.
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#2
Diao, government should have invest money into me
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#3
We always make the wrong investment.
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