Singapore reduces stake in Suzhou project.
Officials from the two sides inked a memorandum of understanding here in which a Singapore-led consortium will cut its stake in the joint company developing the park from 65% to 35% from Jan. 1, 2001, while the Chinese side will up its share correspondingly.
"On that day, majority ownership and management control of the joint venture company...will be transferred from Singapore to China," said Khaw Boon Wan, permanent secretary of Singapore's Trade and Industry Ministry, which led the signing for the Singapore side.
He also said Singapore will only complete the first eight square kilometers of the 70 sq km project, leaving the Chinese to develop the rest on their own.
The signing of the memorandum of understanding follows a statement by Senior Minister Lee Kuan Yew earlier this month that Singapore might withdraw from the project as it is unhappy with the fierce competition posed by nearby Suzhou New District Industrial Park, developed by the Suzhou municipal authorities.
Both sides had been negotiating for about a year to try to resolve their conflict over the rival park.
Khaw took pains to stress that Singapore will continue to provide software transfer facilities and train Chinese officials involved in the Suzhou project for as long as China requires those services.
"Let me reaffirm my ministry's strong desire to promote economic cooperation with China," he said.
Liang Baohua, Communist Party secretary in Suzhou, said, "Both sides will continue the friendly cooperation."
The park is the biggest project between Singapore and China. The idea for the park sprouted in 1992 from remarks by China's then paramount leader, Deng Xiaoping, that China should learn from Singapore's successful experience in economic development.
In February 1994, Chinese Vice Premier Li Lanqing and Singapore's Lee signed an agreement for the development of the park.
A joint venture company, China-Singapore Suzhou Industrial Park Development Co., was formed to develop the park. The Singapore consortium, Singapore Suzhou Township Development, owns 65%, while the Chinese side, a group of 11 state- owned companies, accounts for the remainder.
Two Japanese companies, Mitsui and Co. and Mitsubishi Corp. are among the 24 entities that make up the Singapore-led consortium.
So far, only 11 sq. km of the Suzhou Industrial Park have been developed, attracting 133 companies, including 12 Japanese, with a total investment of 3.8 billion dollars, its developers said.
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|Publication:||Asian Economic News|
|Date:||Jul 5, 1999|
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