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Suzhou Industrial Park developer raises 1.36b yuan in IPO

China-Singapore SIP Development Group is master developer for the Singapore-China collaborative area

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The development of the China-Singapore Suzhou Industrial Park started from the west bank of Jinji Lake (above). Over the years, the lake developed into a vibrant Central Business District that boasts a mixture of development spanning commercial, residential and cultural uses.

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West side of Jinji Lake prior to construction.

Singapore

THE joint-venture company that developed the China-Singapore Suzhou Industrial Park (SIP) has raised 1.36 billion yuan (S$262 million) in an initial public offering (IPO) that took nearly 15 years to bring to fruition.

The China-Singapore SIP Development Group Co (CSSD), formed in August 1994, is the master developer for the 80 square kilometre Singapore-China collaborative area in the SIP, the first such government-to-government project between both countries.

Nearly 150 million shares were issued to much fanfare on the Shanghai Stock Exchange, and share prices leapt nearly 44 per cent within minutes after open to hit 13.92 yuan on Friday.

CSSD deputy chairman Ng Lang called the listing a "very significant milestone".

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"Primarily, it embodies the fulfilment of Singapore's vision from the inception of the SIP that it would be a commercially sustainable model of economic cooperation between China and Singapore," Mr Ng said.

Speaking in Mandarin, Zhao Zhisong, CSSD chairman, said: "The company's branding, financing abilities and development will enter a new phase with this listing, so we don't see getting listed as an ultimate goal. Instead, it's a milestone in our journey towards success." Getting CSSD listed was a challenge issued by then-Senior Minister Lee Kuan Yew when the SIP celebrated its 10th anniversary, Lee Yi Shyan, chairman of Business China, told The Business Times.

This is because a successful listing would mean the company has satisfied three criteria that would increase its international standing - having a track record of success, good corporate governance and a viable business model and plan.

He said these targets were "not easy at all" for a master developer such as CSSD, which has since come a long way in the last 25 years. Mr Lee has been closely involved in the SIP in various capacities in the last 23 years, first when he was with the Economic Development Board of Singapore and later as Minister of State for Trade and Industry from 2012 to 2015, among other roles.

The SIP, which spans 288 sq km, now sees healthy economic growth - its gross domestic product went up by 7.1 per cent year-on-year in 2018 to 257 billion yuan - after initial multimillion dollar losses incurred in the late-1990s and other setbacks. In 2014, it was reported that the former chief executive of CSSD was being probed for graft. When asked if the alleged corruption had an impact on the IPO's delay, Mr Lee said it was unlikely, adding that there were many other reasons. For one, China has been trying to cool its property market with a clampdown on property speculation. This means the authorities needed to distinguish between traditional real estate developers and master developers, which create a township and economic value.

In addition, there is a queue for listings to be approved by China's securities regulator, Mr Lee said. CSSD received its approval on Dec 1.

He said the listing brings international credibility to CSSD, and the company would be able to finance future growth beyond Suzhou and China and into Asean under the Belt and Road Initiative.

Singapore's involvement in the park has also evolved over the years, from infrastructure building to knowledge-industry creation, Mr Lee said, adding that the park's development has been in sync with Singapore's.

The challenges both SIP and Singapore face are now similar, he added. For example, both are looking for ways to upgrade their industry and to attract top tech talent and companies looking to move to other places in China.

"In that sense, we can have a twinning role to help address each other's hinterland," Mr Lee said.

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