Chapter 5: Suzhou Industrial Park - Singapore's Boldest Project in China
This is probably my favorite chapter in the whole book. Lye Liang Fook writes about the Suzhou Industrial Park (SIP), and it reads almost like a startup saga. Two countries decided to build an entire industrial township together. They clashed on how to do it. Things got rough. Then it actually worked.
It Started with Deng Xiaoping Being Shocked
The origins go back to 1978 when Deng Xiaoping visited Singapore. He had passed through once before in 1920, on his way to France. Back then it was a British colony. When Deng came back 58 years later, he couldn’t believe what he saw.
He told Lee Kuan Yew: “If I had only Shanghai, I too might be able to change Shanghai as quickly. But I have the whole of China!” After Deng left, Lee told colleagues that Deng’s staff were going to get a “shellacking” because Deng had seen a Singapore his briefing papers hadn’t prepared him for.
After that visit, China’s People’s Daily stopped calling Singapore “running dogs of the American imperialists” and started describing it as “a garden city worth studying.” Quite a turnaround.
Then in 1992, Deng did his famous Southern Tour speech, telling China to learn from Singapore’s social order and governance. That created “Singapore fever.” Over 400 Chinese delegations came to Singapore that year alone.
How the Park Was Born
The mayor of Suzhou pitched Lee Kuan Yew in September 1992: would Singapore invest in helping Suzhou industrialize? Singapore wasn’t immediately sold. They needed Beijing’s backing or the project would be dead on arrival.
Singapore had its own reasons too. Lee Kuan Yew had been pushing businesses to go regional, to build a “second wing” for the economy. Taiwan, Hong Kong, and South Korea already operated beyond their borders. Singapore needed to catch up.
After several rounds of talks, both sides agreed on the SIP in 1994. The plan: 70 square kilometers east of old Suzhou, 10 to 15 years, US$20 billion in investment, 600,000 residents, 300,000 jobs. On paper, just another industrial park. In reality, something very different.
The Software vs. Hardware Problem
Here’s the thing that made SIP unique. Most industrial parks are about hardware: build the roads, put up factories, done. SIP was supposed to transfer Singapore’s “software” too. Not computer programs. The way Singapore runs things: planning, rules, transparency, attitude toward investors, the value systems behind decision-making.
Singapore wanted to teach long-term master planning, one-stop investor service, transparent regulations, environmental protection. In 1994, these ideas were standard in Singapore but alien in Suzhou.
The clash came fast. China’s development zones used “rolling development”: need land for an investor? Just build wherever there’s demand. Fast and ad hoc. Singapore’s approach was the opposite: draw up a master plan, zone every piece of land, then develop according to that plan.
The friction got real when the local administration (SIPAC) took over two prime plots next to scenic Jinji Lake that weren’t zoned for government use. SIPAC’s argument: the land rights hadn’t been formally transferred to the Singapore-led joint venture yet, so no permission needed. From Singapore’s view, this completely undercut the master plan.
They couldn’t resolve it for years. It took until 1999, packaged together with a bunch of other disputes.
Training 3,000 Officials
While the physical development had its bumps, the training side went much better. From 1994 to 1996, Singapore focused on big-picture stuff: economic management, urban planning, labor systems. Then it shifted to practical training: civil service HR, provident funds, taxation, public housing, environmental protection, customs, real estate management.
The goal was clear: train Chinese officials to create a pro-business environment with one-stop service and transparent policies. By the time the book was written, Singapore had trained close to 3,000 officials across over 160 courses. They also helped set up a vocational training institute in 1997 (with Nanyang Polytechnic’s help) to produce skilled workers for SIP companies.
The Numbers Tell the Story
By end of 2014, the park had attracted 5,276 foreign-invested projects, including 92 Fortune 500 companies. Total investments topped US$90.7 billion. GDP contribution hit RMB 200 billion. The park contributed RMB 23 billion in fiscal revenue to Suzhou, about 16% of the city’s total.
Investors came from everywhere: Taiwan and Hong Kong (47%), Europe (12%), Americas (11%), Singapore (10%), Japan (8%), South Korea (6%). Singapore deliberately marketed SIP to western investors early on, giving the park an international reputation that stuck.
The joint venture company, CSSD, had been profitable every year since 2001. Manufacturing was the backbone (80% of foreign investment), focused on electronics, precision equipment, and electrical machinery. But SIP was also pushing into biotech, nanotechnology, and cloud computing, with dedicated hubs like Nanopolis and Biobay.
The Green Part
But here’s what really sets SIP apart from other Chinese industrial parks. The environmental record.
From 1994 to end of 2014, SIP turned down 300 projects worth US$2 billion because they posed environmental risks. They said no to two billion dollars to protect the environment.
The results show. Carbon emissions per RMB 10,000 of GDP were one-third of China’s national average. Chemical oxygen demand was one-eighteenth of the national average. Sulphur dioxide emissions were one-fortieth. These are staggering differences.
Jinji Lake, which used to be a fish farming area, was cleaned up and turned into a scenic zone with parks, islands, and walking paths. It earned China’s highest “5A” tourism rating and gets 50,000 visitors a day. SIP also hosts marathons, sailing regattas, and the 2015 World Table Tennis Championships. It feels like a community, not a factory zone.
More Than Business
Here’s the part most people miss. SIP was never just a commercial project. From day one, it created a framework for government leaders from both countries to work together. They set up a Joint Ministerial Council at the top, a Joint Working Committee in the middle, and project offices at the bottom.
This structure later got upgraded into the Joint Council for Bilateral Cooperation (JCBC), which now oversees all bilateral cooperation between the two countries. Without SIP, the author argues, the Tianjin Eco-city would never have happened.
Then there’s the brand name effect. SIP’s success made “Singapore” a brand in China that means good governance and clean environment. When SIP’s model spread to other Chinese cities, the Chinese side publicly said they were building on the Singapore collaboration model. The Singapore name was what set them apart from competitors.
When Lee Kuan Yew passed away in March 2015, SIPAC’s director called Lee the “initiator of SIP” and said the best way to honor him was to keep following the original vision. Two days later, they held a photo exhibition titled “Lee Kuan Yew and Suzhou Industrial Park.” That tells you how much the Singapore connection means here.
Why This Chapter Matters
Lye Liang Fook makes a convincing case that SIP is the most significant single project in the Singapore-China relationship. It’s not just an industrial park. It’s a training ground, a brand, an institutional framework, and proof that the “Singapore model” can actually be transplanted with enough patience and friction.
The early years were messy. Both sides had legitimate but conflicting approaches. But they stuck with it, worked through the disagreements, and came out with something genuinely impressive.
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