A charming reporter for the Singapore Straits Times recently called me up to interview me about my perceptions of the Suzhou Industrial Park on its 15th anniversary. The article should be coming out next week. Apparently, it will be a full two-page spread. The Singaporeans clearly take their largest investment in China very seriously.

The reporter was curious about how SIP has changed over the years, and especially how it is faring during the economic downturn. I organized my thinking around three main trends: administrative, economic, and business.

Salient points I made about administrative revolved around the warm welcome SIP administrators – Chinese and Singaporean – gave to investments just after SARS; how the couple years until the economic meltdown they’d become very picky about who they would take into the Park and who they would help in times of trouble; and how much more pliant and accessible they’ve become since the downturn. I postulated that instead of deterring SIP’s (and Suzhou’s) plans to become a high-tech hub that the downturn would actually accelerate their efforts. Already, companies that had been purely manufacturing in SIP are considering or are actually implenting transition plans to perform R&D in the area.

The economics of SIP – and of Suzhou, at large – has been criticized in Beijing think tanks. The “Suzhou model” of attracting export-driven (albeit cleaner and more sophisticated than Dongguan, for instance) has resulted in a donut-effect: the Chinese transplants that have come to take the engineering and middle-management positions have raised the cost of living in the area without the foreign companies investments really benefitting the pocketbooks of the average Suzhounese. One Suzhou lawyer I talked with said part of that was just the Suzhounese Way: historically the Land of Fish and Rice has always been pretty well off. Suzhounese have always managed a lifestyle that they found comfortable, without the manic need work harder and longer hours. Still, it is a fact that Suzhou has reaped huge benefits the last ten years, and has grown out of all proportion to everyone’s expectations. However, with factories pulling back on production, thousands of operators have returned to their hometowns and recent university graduates are finding it tough to land a job. Salaries are substantially depressed from even a year ago, and rental prices have dropped precipitously.

Though local businesses are still coming and going apace, businesses that relied on expat salaries have taken a hit. I’d estimate Suzhou has seen 30% to 50% of its expat population evacuated back to their home countries. Landlords clearly don’t like the trend, and neither do restaurant and bar owners who depend on foreign tastes. The South Korean population, I understand from teachers at international schools, have taken the biggest hit. Of the Westerners, perhaps the Americans.

One of the more interesting impressions I drew from the interview was that the Singaporeans are still smarting over the supposed slight of nearly ten years ago, when the Singaporean investors accused the local Suzhou  government of directing potential investment projects to the Suzhou New District, a large economic development zone on the west side of the city.

“Get over it,” I wanted to say to the journalist’s readers, “This is China!”