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cooperation of the respective national costs (in terms of land rents and labour
governments. wages) but Singapore-standard industrial
By 2005, it could be argued that the infrastructure and administration. Also, this
Singapore government’s regionalization project had the strong support of two national
strategy had generally turned out to be rela- governments, which gave investors a sense of
tively successful for most of the parties con- long-term stability.
cerned, despite a few setbacks which will be However, conflicts between the two gov-
discussed in the next section. The main ernments began to emerge soon after 1997.
beneficiaries have been the transnational cor- This was in part due to the onset of the Asian
porations, who have been able to ‘disaggre- Financial Crisis. Even though the Crisis did
gate’their operations much more conveniently not affect China, it had the impact of signifi-
and effectively, thanks to the cooperation cantly reducing FDI in the whole region as
between Singapore and the host govern- global consumer demand meant that transna-
ments. The local host governments too have tional corporations were more cautious about
been fairly satisfied, as the parks have investing in new factories around the world
been able to generate employment and other (see Haggard and Low, 2002). With this decline
developmental effects. Although the in the supply of FDI, the inter-governmental
Singapore government has reported that competition in the whole Asia-Pacific region
these regional industrial parks have not made intensified. Indeed, in some cases, even sub-
any financial profits, the strategy is still national governments competed against
considered crucial to Singapore’s own national governments. This was the case in
domestic industrial restructuring process as, the Suzhou Industrial Park, as it saw direct
since the late 1990s, Singaporean small and competition for FDI from the neighbouring
medium enterprises have also been shifting Suzhou New District, an industrial estate
lower value added operations to these parks administered by the Suzhou Municipal
(see Chia, 2000). Authority. The Suzhou New District mod-
elled itself on the Singapore-developed
Suzhou Industrial Park. It claimed to offer
Singapore-standard industrial infrastructure
Conflict
and administration as it had learnt by
As mentioned in the previous section, the ‘observing’. More significantly, it could offer
regional industrial parks were generally suc- even lower land rents than the Singapore-
cessful in achieving the original target, which developed Suzhou Industrial Park (see
was inter-state cooperation to jointly attract Pereira, 2003).
FDI. However, there was one case where The competition for FDI by the Suzhou
there was obvious inter-government conflict: New District strained the Singapore–China
the Suzhou Industrial Park project, which inter-governmental cooperation. Between
was a collaborative project between the 1998 and 1999, the Singapore government
Singapore and China governments. This asked the Chinese government to discipline
project was located 60 kilometres west of the Suzhou Municipal Authority, proposing
Shanghai, just outside Suzhou city. From the that any new FDI would go to the locally run
Singapore government’s perspective, it was Suzhou New District only after the other
the largest of its regional industrial parks, in project was ‘fully filled’. Much to the frustra-
terms of geographical size as well as finan- tion of the Singapore government, the
cial outlay (see Pereira, 2003). Between 1994 central China government in Beijing chose
and 1997, the Suzhou Industrial Park was not to take any action to ‘discipline’ the sub-
one of the fastest growing FDI zones in the national government. The Suzhou Municipal
whole of Asia, as multinational and transna- Authority remained defiant: it claimed that
tional corporations saw that it had China-level there should be ‘free and fair’ competition