China "shenanigans" over city plan miffs Lee

Related: The trouble with Singapore's clone: Economist
 
THE mayor of the scenic Chinese city of Suzhou, Mr Chen Deming, is not easily intimidated, even when Singapore's irascible Mr Lee Kuan Yew rolls up his sleeves for a diplomatic brawl.

Mr Chen immediately grins when he is asked for his response to Mr Lee's extraordinary attack on mainland authorities over Singapore's fading dream of building a $US20 billion ($30.4 billion) clone of the Lion City on a 70-square-kilometre site outside Suzhou.

"The only thing I can say is that I will pay very close attention to the reasonable parts of his comments," he said in Beijing during a break in the annual session of China's parliament, which ended on Thursday.

Mr Chen insisted that his city government had behaved honourably in its dealings with Singapore over the controversial Suzhou Industrial Park (SIP), which has dented Singaporean illusions that overseas Chinese compatriots with shared "Asian values" would fare better in mainland joint ventures than other hapless foreigners.

"We have followed every step according to the contract," he said.

That is not how a frustrated Mr Lee saw it when he visited the SIP site in December and lectured local officials over their "bureaucratic shenanigans" in allowing a rival industrial park, the Suzhou New Development, to compete successfully for foreign investment.

"This matter has to be clarified because our credibility is at stake and the credibility of the Chinese Government as well in endorsing the SIP at the very highest level," Mr Lee told the local government.

Singapore's elder statesman later took his complaints to the Chinese President, Mr Jiang Zemin, and was reassured that the SIP - a 65 per cent Singapore-owned joint venture - had the full backing of the central government, but by then his faith had been seriously damaged.

In comments that echoed the exasperation of countless earlier foreign investors in China, Mr Lee said after returning to Singapore that he had discovered that signing a contract on the mainland was the beginning of negotiations, not the end.

"You have to be flexible," he said in an interview with a Taiwanese newspaper. "We are not going to change them and they are not going to change us. But, if we want to do business in China, this is something we have to remember: it's different from doing business in other countries because they are clever people - in fact, too clever."

Mr Lee's irritation marks another phase in a complex political relationship between the predominantly Chinese Singapore he was instrumental in founding and the vast mainland that he has at times feared as a reservoir of revolution - and more lately lauded as a rising superpower.

For their part, mainland leaders have also had changes of heart over Singapore and Mr Lee.

China's late premier Zhou Enlai once famously and dismissively described the British-educated Mr Lee as a banana: yellow on the outside and white on the inside.

However, in recent years, Mr Lee and other senior Singapore officials have become quasi advisers to the Chinese government as it set about broadening the mainland's economic reforms.

Friction over the SIP could undermine this relationship, particularly as foreign investment into China contracts sharply because of Asia's dramatic economic slump.