Singapore, China venture looks west

Graphic of Singapore's current and potential future projects in China

How about a China-Singapore modern services demonstration zone in Chongqing? A joint international financial city in Cheng-du? Or a Silk Road Economic Belt free trade zone in Xi'an?

These are among the key initiatives put forward by western Chinese cities vying to be picked as the site of a proposed third government-to-government project between Singapore and China.

They were believed to have been presented at closed-door sessions to Social and Family Development Minister Chan Chun Sing and a Singapore delegation during their Feb 1-3 visit to China.

Both countries have been studying the feasibility of a joint venture in China's western region after Executive Vice-Premier Zhang Gaoli broached the idea in 2013.

But not much has been revealed publicly about the project except for the theme of "modern connectivity and modern services" and for three criteria - that it should suit China's developmental needs, break new ground and be commercially viable.

The Straits Times got a glimpse of the cities' proposals, which tend to converge in areas of financial cooperation, logistics and information technology, reflecting the project's theme.

Also, all three cities have expressed a desire to tap Changi Airport's expertise in developing their aviation sectors.

For example, the Sichuan provincial government's proposal - drafted on behalf of its capital city Chengdu - said the construction of its new airport would be modelled on an upgraded version of Changi Airport.

It will be part of an international aviation hub, which in turn is one of six initiatives proposed in Chengdu.

One is an international financial cooperation pilot zone, which features a China-Singapore international financial city" as a base for Singapore and South-east Asian financial institutions and their regional headquarters.

Sichuan has specified a 167 sq km collaboration area - about one fifth of Singapore's size - which will include the 10 sq km Singapore-Sichuan Hi-Tech Innovation Park.

On its part, Chongqing - a centrally-directed municipality - has set aside a smaller cooperation area of about 20 sq km, with the 10 sq km Longsheng district identified as the core area.

Its proposal identifies three key themes - modern logistics, financial settlement and big data - supported by four key initiatives.

A China-Singapore modern services demonstration zone proposed in the Airport and Cuntan Bonded Zones will develop a new airport city by leaning on Singapore's maintenance, repair and overhaul (MRO) expertise.

The Shaanxi government's proposal for its capital city Xi'an is anchored on the Silk Road Economic Belt (SREB) - an initiative by President Xi Jinping to revive an ancient trading route between China and Europe.

For instance, it has suggested an SREB free trade zone, international financial centre and big data centre.

The third joint venture would mark a return to the government- to-government model after the adoption of a private sector-led, government-backed model in recent years.

The first two government-led projects were the Suzhou Industrial Park and the Tianjin Eco-city that began in 1994 and 2008, respectively.

Mr Chan last week told reporters an official announcement on the project - presumably on its location and format - would be made later this year, which marks 25 years of diplomatic relations.

The Straits Times understands one of Singapore's criteria is that the project should "deliver quick wins within three to five years" and "achieve sustainable growth in 10 to 15 years".

The Ministry of Trade and Industry, which is fronting Singapore on the third project, did not address a question on the reasons for the timeframe.

Asked about the viability of some proposals, it said Singapore companies would be following up with the three cities to explore potential collaborations based on the agreed theme.

"Both Singapore and the Chinese central government will study the cities' proposals and make a joint decision in due course," a spokesman added.

Singapore-Sino expert Sun Jingfeng of the Henan Normal University said the timeframe may be "a tad too optimistic", given the slower-than-expected progress during the initial years of the Suzhou and Tianjin projects.

"Also, Singapore might find it harder to work with local governments in the west than those on the coast, which are more savvy," he told The Straits Times.

Observers say the new joint venture, given its focus on connectivity, may not take the form of a physical development in a specific locality, which means more than one of the shortlisted cities may be involved eventually.

A spokesman for Changi Airports International (CAI), whose chairman Kee Teck Koon was among Singapore honchos on the visit, said it is premature to comment on CAI's likely involvement.

"The recent trip was primarily to understand the various requirements and developmental needs at the various airports," said Ms See Ngee Muoy, spokesman for CAI, a subsidiary of Changi Airport Group.

"There are also many other industry participants, such as in MRO, logistics, conducting their own research and analysis."

Insiders tell The Straits Times Chongqing is deemed the most enthusiastic, with top officials like mayor Huang Qifan presenting the proposals to the Singapore delegation last week.

Some are also impressed that Chengdu has offered the biggest piece of land, which includes prime spots in the city centre.

But Singapore-based analyst Chen Gang of the East Asian Institute believes Xi'an stands the best chance as its many universities can provide a ready pool of talent essential to growing tertiary industries like finance and IT.

Asked whether Singapore's ties with those cities not selected could be affected, Dr Chen said: "I don't think so. Chinese cities are always competing for investments and cooperation projects and are used to being rejected."

A TALE OF THREE CITIES' VISION

Chongqing

One of four municipalities under the direct control of China's central government, Chongqing has 30 million people and a land area of 82,400 sq km.

Its economy grew 12.3 per cent in 2013 to 1,265 billion yuan (S$275 billion) and total trade with Singapore that year reached US$1.66 billion (S$2.3 billion).

Concept: Based on a "One Park, Multi Districts" idea, Chongqing has identified three key themes - logistics, financial settlement and big data - and proposed four key initiatives.

A collaboration area of 20 sq km has been identified, with the Longsheng district of about 10 sq km set aside as the core area.

The initiatives include:

An integrated logistics centre comprising an aviation and port logistics hub;

A China-Singapore modern services demonstration zone where Singapore firms can provide legal and accounting services, among others;

A smart city featuring a special administrative zone for cloud computing and big data sectors.

Chengdu

The capital city of south-western Sichuan province, it has 14 million people and a land area of 12,400 sq km. In 2013, its economy grew by 11.9 per cent to 910.9 billion yuan and total trade with Singapore was US$1.09 billion.

Concept: Aiming to become a pan-Asian global interconnection centre, Chengdu has included six key initiatives spanning logistics, aviation, finance, the Internet, tourism and education.

It is designating a 167 sq km area for the proposed project, which will include the Singapore-Sichuan Hi-Tech Innovation Park, and will set up a working group chaired by Sichuan governor Wei Hong.

The initiatives include:

Building an international airport hub with the construction of a new second airport modelled after an upgraded version of Changi Airport;

Setting up a China-Singapore international financial city that attracts Singapore and South-east Asia financial institutions to set up regional headquarters there;

Establishing an international communication network that includes a Chengdu-Singapore direct communication line and an ASEAN-Western China information superhighway.

Xi'an

Tne capital city of northern Shaanxi province has 8.5 million people and a land area of 9,980 sq km. In 2013, its economy grew by 11.1 per cent to 488.4 billion yuan and total trade with Singapore was about US$1.03 billion.

Concept: Five areas of cooperation have been identified - transport, logistics, finance, technology and the Internet. Some areas such as Xi'an International Trade & Logistics Park and the Xi'an Chanba Ecological Area are designated as possible cooperation areas.

The initiatives include:

Building a Xi'an aerotropolis with Singapore firms invited to help build Xianyang International Airport;

Jointly developing a Silk Road Economic Belt (SREB) free trade zone;

Setting up SREB international financial centre in Xi'an with a regional wealth management centre focused on Eurasia and Western China.

kianbeng@sph.com.sg


This article was first published on February 12, 2015.
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