Saturday, 13 September 2014

Guangdong signals support for Knowledge City

Sino-S'pore project a boost for province, leader tells PM Lee on visit
By Rachel Chang In Guangzhou, The Straits Times, 12 Sep 2014

THE party secretary of Guangdong province, Mr Hu Chunhua, gave a ringing endorsement of the Sino-Singapore Guangzhou Knowledge City (GKC) yesterday and revealed that the province lobbied Beijing to locate a specialised intellectual property (IP) court in the GKC to give it a boost.

The court, one of three pilot courts that the central government said last week it would be setting up, will add to the IP protection framework that the GKC is working towards.

This is part of its goal of nurturing high-end, knowledge-intensive industries, something Mr Hu described as the main challenge facing Guangdong.

The private sector-led, government-backed project broke ground in 2010.

"Although we have achieved a lot economically, our industries are still in low or mid-end manufacturing. We hope that the GKC can push us to the high end," he told Prime Minister Lee Hsien Loong yesterday in a 30-minute meeting that preceded dinner.

Mr Hu's endorsement came three months after Mr Wan Qingliang was sacked as party secretary of Guangzhou, the provincial capital of Guangdong, for corruption.

Mr Hu, widely seen as one of China's next top leaders, was the first Chinese politician to meet Mr Lee, who is on a week-long visit to southern China.

It is Mr Lee's first visit to Guangdong since 2006.

He will also meet Executive Vice-Premier Zhang Gaoli in Guangxi, and Hong Kong Chief Executive Leung Chun Ying.

During their warm and informal meeting, Mr Lee told Mr Hu that economic transformation is a task with no end and one that Singapore is still grappling with.

"We faced some very difficult problems, training the people, but also getting the companies to transform the way they operate, and getting old companies, some of them which are no longer competitive, replaced by new investments," he said.

Today, Mr Lee will visit the GKC for the first time before taking a train to Shenzhen, the pioneer site of China's economic opening up.

Mr Hu said Guangdong can learn how the Singapore Government plays a major role in bringing about economic transformation, while also letting market forces reign.

Referring to China's current attempt to reform state-owned enterprises, Mr Hu said China "also wants to make full use of the market and make full use of the government, but how to balance the two, that will require wisdom".

They also discussed how social governance is more challenging in the age of social media.

"You have to respond almost instantly, and we can't afford to do that because we're afraid if we say the wrong thing, we won't be able to take it back," said Mr Lee.

"In the old days, our approach was 'don't make too many speeches'. You talk every day, people stop listening... But today, if you're not there, present in the social media space, people forget that you exist."

Chinese officials face great pressure on this front too, said Mr Hu.

Besides having no tradition of interaction with the media, they are also finding that the public has "very high expectations".

"People always want solutions to their problems quickly. But these questions are not so easy to solve," he said.





PM Lee outlines parameters for third govt-to-govt joint venture with China
By Rachel Chang, The Straits Times, 12 Sep 2014

FOR its third government-to-government bilateral venture in China, Singapore wants to conceive of a project that fits in with China's priorities, will be fully supported by the local authorities and is commercially viable, said Prime Minister Lee Hsien Loong.

He sketched these parameters in his first comments on the prospective project, to be located in western China, in an interview with Guangdong newspaper Nanfang Daily.


Noting that Singapore and China's bilateral cooperation is "progressing at all levels and on multiple fronts", he said that both governments had to set the framework for good relations and foster free trade and investments to bring relations to the next level.

Singapore and China are currently exploring where and in what form this third joint venture - coming after the Suzhou Industrial Park, which marks its 20th anniversary this year, and the Tianjin Eco-City - will take.

The Chinese government had asked Singapore to start a new project in its western region and, while talks are still in the early stages, Singapore leaders have made clear their desire that the project breaks new ground in China, like the first two.

In the Nanfang Daily interview, Mr Lee emphasised that Singapore, with its small size and differing strategic context and history, does not presume to be a model for China to learn from.

But Chinese officials have found Singapore an interesting case study, with almost 50,000 visiting for training in the past 20 years, he noted.

"They are interested in our practical mindset, the way we work across multiple agencies, and how we work with the population.

"They tell us that they have found our experiences useful, and shared with us that what they saw here has inspired several experiments in China," he said.

Over time, Singapore has noticed that the focus of Chinese officials has also shifted from economic development to social governance issues like housing, education, social harmony and the rule of law, he added.

Singapore is also eager to learn from China, he said.

"I am particularly impressed by how Chinese at all levels, in and out of government, have a powerful drive to improve, and how China continues to nurture a great thirst for knowledge in dealing with its challenges."

Mr Lee described Guangdong, which he last visited in 2006, as "a gateway to China", a status it has enjoyed for centuries.

Guangzhou and Shenzhen were open, vibrant and rapidly changing, he said, adding: "I am looking forward to seeing the cities for myself and feeling the vibes."

Yesterday, Mr Lee had dinner with Guangdong party secre-tary Hu Chunhua, who is widely seen as one of China's next top leaders.

Guangdong has deep economic and cultural links with Singapore.

Last year, it accounted for nearly a quarter of Singapore's total $115.2 billion in trade with China.

Singapore has a major bilateral project sited in Guangzhou, the private sector-led, government- backed Guangzhou Knowledge City (GKC).

One of the areas it is working on, Mr Lee noted, is the development of an intellectual property (IP) protection framework.

The GKC is likely to host one of the first specialised IP courts to be set up in China.

Two others, the Chinese government said last week, will be established in Beijing and Shanghai.





S'pore 'welcomes China's effort to systematically develop ties with ASEAN'
By Rachel Chang, The Straits Times, 12 Sep 2014

SINGAPORE welcomes China's efforts to systematically develop its relationship with ASEAN countries at multiple levels, said Prime Minister Lee Hsien Loong.

This includes Chinese President Xi Jinping's proposal of a "21st-Century Maritime Silk Road", which would link several ASEAN countries and China through the South China Sea.

Asked about the proposal in an interview with the Nanfang Daily, Mr Lee said "this strategic concept of improving connectivity and creating an economy belt will benefit our region".

He made clear that ASEAN "hopes to be friends with and work with all countries".

"Hence, as ASEAN enhances its ties with China, it is also increasing cooperation with other countries and regions, such as the United States, the European Union and Japan," he said.

"This is how ASEAN can play a useful role, in fostering regional cooperation and economic integration in our region and beyond."

In the interview conducted before his week-long trip to southern China starting yesterday, he was asked about talk that the creation of the Shanghai Free Trade Zone could affect Singapore's position as the region's financial hub.

The zone was established last year to pilot financial reforms such as unrestricted foreign currency exchange and simplified procedures for foreigners setting up companies in China.

Dismissing such a view, Mr Lee said Singapore sees the liberalisation and development of China's financial industry as an opportunity, not a threat. "Financial institutions in Singapore do a lot of business with other leading financial centres like New York and London," he said.

"So as China's financial sector matures and opens up, it will create more opportunities to deepen ties with Singapore. It will be mutually beneficial and will offer new opportunities to our financial institutions and beyond."





PM Lee shares social media lessons with China officials
By Joy Fang, TODAY, 12 Sep 2014

Unlike in the past, when ministers were more circumspect in their speeches to the public, government officials now have to be ready to address issues every other day and through informal ways, said Prime Minister Lee Hsien Loong yesterday.

Mr Lee made these remarks during a candid conversation with Guangdong Party Secretary Hu Chunhua, when he visited him at the Guangdong Government House as part of his official visit to China.

“In the old days, our approach was don’t make too many speeches. Once in a long time, think carefully, prepare well, say something important, people will listen to you,” he said.

Today, one has to engage the public via social media fairly often, “or people will forget you exist”.

“I have to post nearly every day, sometimes serious events, sometimes just photographs, sometimes just a friendly message, just to let people know that you’re still there and there’s something interesting to watch,” Mr Lee said.

The rise of social media has changed the way societies interact with the state and while this is challenging, the Government has to adapt.

“The Government finds it not so easy as you have to respond in an almost instantaneous way and we can’t afford to do that because we’re afraid if we say the wrong thing, we won’t be able to take it back,” Mr Lee said, with a laugh.

Mr Hu, a member of the 18th Politburo of the Communist Party of China and a protege of former President Hu Jintao, who is considered a rising star in Chinese politics, agreed. Chinese officials, too, are facing added pressure.

In the past, officials did not have much experience interacting with the public, he noted.

Hu added that the public now has very high expectations and wants questions answered quickly, but some questions cannot be answered immediately as the Government would need time to analyse the issues to resolve them. “So it will be a long way for us to adapt to this manner of greeting,” he said in Mandarin.

During their 20-minute meeting — for which reporters were present throughout — Mr Lee and Mr Hu also spoke about the economy, with Mr Lee commenting that despite economic restructuring not being an easy task, it has to be done consistently. Singapore, for one, had been too anxious with regard to its restructuring exercise 30 years ago. “We raised wages and the companies adjusted to it, but we did it too drastically and we faced a severe economic downturn,” he said.

Even now, the Government is still grappling with how to upgrade the Republic’s economy, especially when it comes to educating the public and making sure that old companies that are no longer competitive survive the restructuring,

The two exchanged warm words about Singapore’s bilateral relations with Guangdong, particularly the Sino-Singapore Guangzhou Knowledge City (SSGKC), a joint venture company established by Singbridge — a unit of Temasek Holdings — and the Guangzhou Development District. The SSGKC aims to become a vibrant and sustainable hub that is attractive to skilled manpower and knowledge-based industries. Industries to be developed in the park include biotechnology and pharmaceuticals, information and communications technology and clean technology.

Since its groundbreaking ceremony in 2010, 70 Memoranda of Understanding on investment projects have been signed with international companies. Among them is ST Kinetics, which, together with its partners, plans to drive the development of the electric vehicles industry in SSGKC by establishing a headquarters for their electric vehicles cluster, as well as a research and development (R&D) and testing centre. Companies such as ABB (China), Philips (China) Investment, Ralos New Energies AG and Schweizer Energy plan to conduct testing, product R&D and develop solutions relating to renewable energy and green buildings there.

Mr Hu said the project is progressing smoothly. He hopes it will serve as a role model for high-end industries to carry out development there. “Despite our achievements over the past few years, we realise that most of our industries in Guangdong are still the middle and low-end industries,” he said.

Earlier in the day, Mr Lee paid a visit to the Guangdong Provincial Museum, where he viewed exhibits which displayed the province’s rich historical culture. During his visit, Mr Lee will stop at Shenzhen, Guilin, Nanning and Hong Kong. In Nanning, he will deliver a keynote address at the joint opening ceremony of the China-ASEAN EXPO and China-ASEAN Business and Investment Summit. His trip ends on Sept 18.







PM: S'pore-Guangzhou venture raises bar for govt-to-govt projects
By Rachel Chang In Guangzhou, The Straits Times, 13 Sep 2014

THE successful progress of the private sector-led Guangzhou Knowledge City (GKC) has raised the bar for future government- to-government projects, Prime Minister Lee Hsien Loong said.

Mr Lee, who visited the 123 sq km site for the first time yesterday, told reporters that the way both governments took a backseat - "supporting the project with training, with advice, with guidance" - has worked and that he is happy with the results.

Since both governments have limited resources, and the private sector has the resources and interest to do more, this is a good approach forward for Singapore.

But in a lunch meeting following the visit, the drawbacks of such an approach were conveyed to Mr Lee by Guangzhou Mayor Chen Jianhua, who asked that the GKC be put on the Sino-Singapore national bilateral agenda.

As a private sector-led project, the GKC is not on the permanent agenda of the Joint Council for Bilateral Cooperation, the highest platform for Sino-Singapore bilateral exchange.

This is unlike the Suzhou Industrial Park and the Tianjin Eco-City, Singapore's two government-to-government joint ventures with China, where investors can now raise yuan funding directly from Singapore.

This, Mr Chen said, cuts their financing costs to less than half those of GKC investors and puts the GKC at a "different starting point". Companies raising capital in the mainland typically face interest rates of 7 to 8 per cent. This falls to 2 to 3 per cent if they can borrow capital offshore.

Mr Chen said this was not a big issue in the past as investments in the GKC, which broke ground in 2010, involved only about 20 billion yuan (S$4 billion). But from now on, as the project gains momentum, the investments under discussion reach up to hundreds of billions of yuan, he said.

"So, the capital costs will be a deciding factor for the results and prospects of this project, and also the development speed," he said.

Officials said that the recent announcement of a third government-to-government project in China's western region also intensified the issue for Guangdong provincial authorities, which thought that the GKC's private sector-led model was now the norm for Sino-Singapore projects.

The idea was proposed by Chinese Vice-Premier Zhang Gaoli last year. Singapore officials are now exploring several cities as the site and also in what form the project will take. Singapore's criteria are that it must be ground- breaking, commercially viable and supported by local authorities.

Mr Lee told Mr Chen that "as far as the (GKC) model is concerned, we should maintain it as a model that's led by the private sector and supported by two governments". He said he understood from the Chinese central government that the financial liberalisation in the two flagship projects was not a "special privilege" but a "pilot arrangement". "When the pilot is expanded, GKC should be at the head of the line."

GKC chief executive Chin Phei Chen told The Straits Times later that "while the project is private sector-led, government support to create the conditions for attracting investment and knowledge-intensive industries is critical for its success". The GKC is a 50-50 joint venture between Temasek-owned Singbridge International and the Guangzhou Development District Administrative Committee. Singbridge chairman and former deputy prime minister Wong Kan Seng is also on the trip.


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