Industrial parks draw investors

WUXI has played what could be one of its strongest cards, in its bid to expand and upgrade its industrial development, in its quest for a new role in the Yangtze River delta boom. Under the city's blueprint for becoming a modern and hi-tech industrial base, industrial parks have been planned and built to accommodate domestic and foreign manufacturers.

The most notable ones are Wuxi National New and Hi-Tech Industrial Development Zone (the National Park), of 5.45 square kilometres, and Wuxi Singapore Industrial Park (the Singapore Park), measuring 10 sq km.

The former is a Beijing-approved, state-level project and the latter, the first Singapore-invested industrial park in Wuxi, involves an investment of US$155 million.

It is 70 per cent owned by a Singapore consortium, led by Singapore Technologies Industrial Corp, the rest being taken up by Wuxi city government.

City deputy mayor Wu Xinxiong said: 'Industrial parks are vital to the city's modernisation. Our target is to have industrial parks similar to Singapore's Jurong town and Taiwan's Hsinchu park.' The aim of an industrial park is to provide industry with a location equipped with the necessary facilities and infrastructure under one roof, and with minimal inconvenience to industrialists.

This is important in China where application procedures and recruitment can be burdensome and where city infrastructure such as electricity and waste management lags behind economic growth.


Wuxi's neighbouring cities such as Suzhou, Changzhou and Nanjing are also keen to build industrial parks.

Experience in other Asian countries such as Singapore, Taiwan and Hong Kong, has shown that industrial parks are magnets for foreign investment.

Wuxi International Management Services (WIMS) senior marketing executive Regina Chia Mui Huang said: 'The park is a one-stop service. The objective is to have investors bring with them what they are good at, in producing their own goods.

'The park operator takes care of the electricity, logistics, manpower and business licences for them.' WIMS, which runs the Singapore Park, has experience in building similar parks in Batam and Bintan in Indonesia.


Investors have shown enthusiasm for the parks, with 115 enterprises having moved in to the National Park, representing about five billion yuan (about HK$4.5 billion) of investment or a quarter of the total investment planned. Of the 115 tenants, 62 are foreign enterprises including the likes of Bayers and Bosch of Germany, and Sharp, Toshiba and Sumitomo of Japan.

The 18 tenants of the Singapore Park, are foreign enterprises including Sumitomo Electric and ALPS Electric of Japan, and Seagate Technology of the United States.


Apart from the National Park, a tourist resort in Mashan, along Lake Tai, and an industrial zone for environmentally friendly products in Yixing also have Beijing's blessing.

Adding to the variety of the industrial parks at Wuxi is a self-initiated way of grouping, by which investors cluster together according to nationality.

Industrial estates operated by the Germans, the Japanese and the Koreans sprawl into the suburbs, taking advantage of their combined strength.


Theme parks for tourism also constitute a big part of Wuxi.

Despite the city's economic potential, the availability of investment to fill the industrial parks on offer has become a cause for concern.

This has been underscored by the Singapore Government's investment in Suzhou to build a high-profile, 70 sq km Singapore Suzhou Township, including industrial parks and all the necessary infrastructure of a modern city. The Singapore park in Wuxi, however, is also the investment of a Singapore consortium.


Mr Wu brushed aside the worries, saying: 'We have 15,000 industrial enterprises and our proximity to Shanghai will attract many foreign companies to set up industrial bases here.

'Also, each industrial park has its own niche and targets different tenants.' Perhaps. The Singapore Park and the National Park, for instance, have their own operational mechanisms.

The Singapore Park charges its tenants a management fee besides land and factory leases, while tenants at the National Park pay leasing expenses and sundries.

Singapore Park general manager Chew Song Kim said: 'While the local park doesn't charge you a management fee, the fees instead are collected from the lowest ranking people. That's the practice here.' Ms Chia said: 'There are no hidden costs in the Singapore Park.' The Singapore Park charges a management fee of 15 US cents per square metre a month, on top of leasing rates comprises of covering both land and factory premises.

The price tag for a 50-year land lease is within the $48 to $56 band per sq metre for Phase One and $62 per sq metre for Phase Two. Factory rental for Phase One is within the $4.5 to $5.5 band per sq metre a month.

At the National Park, the land lease is lower, at $40 per sq metre and factory rental is 20 yuan per sq metre a month.

The National Park deputy director, Yang Lingen, said: 'The aims of the two parks differ. We charge tenants less because we aim to boost industries.

'The Singapore Park, however, aims for both industrial development and profit-making.' Ms Chia said the leasing rates for parks in Pudong amounted to between $80 and $120 a sq metre, and factory rentals, between $6 and $8 a sq metre a month.

Though there is competition between the two industrial parks, they are both part of Wuxi's plan to form a new town, covering 82.3 sq km.

The planned enlarged park is an apparent attempt by Wuxi to equip itself for the expected competition from the 70 sq km Singapore Suzhou Township.

Yet, Ms Chia said the Singapore Park was not competing with Suzhou's.

'Suzhou's aim is to develop into a township. Ours is to focus on hi-tech things such as computers and electronics. We have our own special focus,' she said.