The 20th anniversary of the China-Singapore Suzhou Industrial Park (SIP) holds lessons for both countries. For Singapore, the park offered an opportunity to develop an external wing for its economy by overcoming its land and labour constraints. For China, it provided space in which to localise Singapore's successful record of industrialisation. Developed jointly by consortia from the two countries, the SIP has combined their key competitive advantages to distinguish itself as a Chinese industrial park with Singapore characteristics.
This outcome was hobbled when the local government offered a rival park to foreign investors, to the detriment of the SIP, which suffered losses in its initial years. But its fortunes changed when Singapore cut its stake in it, and the Chinese government weighed in with greater support as well. Singapore's experience of dealing with the realities of Chinese power - spread over central, provincial and local governments - stood it in good stead as it refashioned its Suzhou strategy.
For China, the injection of Singapore's developmental DNA into local soil added to the wider phenomenon of urbanisation. This is so widespread in China today that it could obscure images of what Suzhou was like in the 1990s before it was transformed into a modern bustling city. Chinese who take the long view of economic history, since their country's opening up to the world in the 1980s, would not ignore the role played by the SIP in a modernisation process that has caught the global imagination.
Tianjin Eco-City, another bilateral project, shows that the SIP was not a one-off initiative but a continuing part of Singapore's long-term investment in the emergence of a China that could wed its vast geographical and demographic resources to the demands of being an economic great power. Iconic successes such as Suzhou add to China's credentials as it wins appreciation for its developmental model in the Third World. This is the true legacy of projects like the SIP.
Singapore, too, has gained by becoming the largest and busiest yuan centre outside China as companies in both parks take yuan loans from banks in Singapore. A third state-to-state project has been mooted, expected to be located in one of three western cities: Chongqing, Chengdu or Xi'an. Wherever its location and whatever the degree of private-sector involvement, the initiative reaffirms the logic of economic cooperation that has drawn the two countries closer. The launch of direct currency trading, set to reduce the cost of doing business, reveals the unfolding possibilities of that cooperation. Suzhou helped to pave the way to this level of economic trust.