September 14, 1996

Building the new paradise in China.

ERIC ELLIS, Suzhou

IT IS DIFFICULT to imagine anything other than disgruntled peasants rising up from the sodden paddy fields outside Suzhou.

Yet in just 15 years' time, and possibly as early as 2003, China expects a gleaming metropolis the size of Singapore to be planted on the outskirts of this ancient city, three hours up the Yangtze from brassy Shanghai but a million miles away in attitude.

This is the project in which Singapore's strongman and self-styled social engineer, Lee Kuan Yew, has invested so much of his personal prestige and much-touted vision. The largest project of its kind in the world, China hopes to create a sterile hi-tech investment hotspot where people don't complain, crime is absent, life is near perfect. In short, another Singapore.

But there is much to be done, not least build the roads and install the electricity, water and other basic services that much of China lacks. But the Chinese and Singaporean governments expect the new dollars US40 billion city will have a population of up to a million, serviced by a monorail, golf courses, marinas and 'community support centres' - Britons know them as shops. They hope there will be lots of wealthy people working for top US companies, most of which, it is expected, will be Chinese or at least Asian.

The new Suzhou is social engineering on an awesome scale and typical of the broad vistas loved by Chinese planners today. At the moment it is just an idea, promoted by officials based in an on-site prefab 'hotel' who parrot their spiel to anyone who will listen.

Suzhou occupies a special place in Chinese hearts. Dubbed the 'Venice of the East' for its criss-crossing canals, its former glory inspired the Chinese proverb that 'in Heaven there is Paradise, on earth there is Suzhou'.

However, decades of bad communist planning have tarnished that grandeur. The city was given a going-over by Red Guards during the Cultural Revolution and spiritless socialist architecture pollutes the cityscape. Its main industry today is sericulture - silk production. But the new Suzhou's success needs more than silkworms to compare with the Singapore capital.

Most Singaporeans are of Chinese descent. Many of them are of Fujian descent, the coastal province that fronts Taiwan and which has provided many of the world's expatriate Chinese, the hua chiao.

Singaporeans have been criticised by their leaders, particularly Mr Lee, for not being more closely involved in China's economic transformation sooner. It is this reluctance, and the government's urging to get involved, that in part inspired Singaporean sponsorship of the first official contact between Taiwan and China last year.

It also explains something of Singapore's enthusiasm for investment in India, in the hope that opportunities missed in China will not be repeated with another giant in the throes of change.

Singaporeans have begun dribbling into China but the focus of their interest, as with many hua chiao, has been their ancestral towns and villages. Thus Xiamen, the former Amoy and Fujian's second city, has witnessed an influx of Singaporean business.

The city is now blanketed with adverts for Tiger Beer. The first international hotel and the first McDonald's there are Singaporean- backed. Singapore Airlines plans to fly there. Two of Singapore's largest banks are expanding there. The Overseas-Chinese Banking Corporation is building a modern HQ in the would-be financial district, and the Overseas Union Bank is following.

For many Singaporeans, to invest in Suzhou, where there is no significant ethnic connection, or even Shanghai, would require a break with tradition, a break with the sentimentality of being hua chiao.

'Not an issue, ' says Singaporean businessman Wee Eng Seow, who was looking over Suzhou the day the Evening Standard was there.

'We Singaporeans will be hard-headed about this project. There is no place for our heart when it comes to business.'

Mr Wee is perhaps a case in point. He took his waterproofing business to Wuhan, further up the Yangtze, two years ago and claims to have done well.

The Singapore gov- ernment has been kind to him.

A big client of his firm is the government's public housing agency, which is involved in the planning of Suzhou.

He hopes to take that guanxi (connection) with him to Suzhou and is in no doubt the project will be a success.

'Take a look at Shenzhen (the special economic zone bordering Hong Kong).

'Ten years ago it was paddy fields. Now it's a city of two million people, ' he says.

Suzhou may well succeed for no other reason than the Singapore government has decreed that it must. It is looking for dividends for its controversial 'speak Mandarin' policy.

As one Western diplomat in Shanghai says: 'Singapore's credibility is on the line. Lee has his son heading the organising committee. This is all about the prestige of a nation, of two nations.'