China-Singapore (Suzhou) Industrial Park: Lessons for Joint Economic Zone
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Box 5.1 (continued)
2003: SIP Subadministration of Customs provides all-day services—24 hours a day, seven days a week. 2004: SIP Bonded Logistics Center (Type B) with a total planned area of three square kilometers was founded. The Type B Bonded Logistics Center has the functions of a “free trade port.” All imported goods entering the logistics park enjoy “bonded” status. Goods entering the logistics park from within China can be regarded as an export and enjoy a tax rebate. 2007: With the operation of a new land-air transfer mode, the virtual airport finally realized the two-way direct transportation. This made SIP a unique virtual port in China combining ocean, air, and land shipment, and allowed SIP to handle customs declaration, inspection, and clearance of exports and imports directly. 2008 (January): The SIP IFTZ (China’s first) was in operation by integrating the existing two EPZs, the Customs Bonded Logistic Center and Weiting Customs Checkpoint. Within the planned area of 5.28 square kilometers, the IFTZ has the functions of bonded logistics, bonded processing, international trade, and port operation. Incoming foreign goods are under duty bond, incoming domestic goods enjoy export duty refund, and all transactions of goods within the area are exempted from VAT levies. Customs set up a dedicated office in the zone. Source: Authors.
Partnership Structure and Governance • Ensuring active political commitment at the highest level: One key to success was the strong resolution of both Chinese and Singaporean governments to make SIP a win-win success. Top-level political commitment is demonstrated by the profile of the board of the project’s joint steering committee, which is cochaired by the Chinese vice premier and the Singapore deputy prime minister and includes ministerial chiefs of both countries. Singapore also has put senior ministers in charge of different aspects of the knowledge exchange program. This political commitment helped to overcome many of the problems faced in the early days of the partnership, ensuring that both parties had an active interest in finding ways to make things work.