Tianjin zone draws surging investment
By Jiang Ming (China Daily)
Updated: 2004-04-08 08:58

TEDA Administration Committee of Tianjin Economic-Technological Development Area (TEDA) has been endeavoring to establish a respectable image of high-quality service, efficiency, fairness and honesty for a number of years.

Tianjin mayor Dai Xianglong.

Chen Chaoying, a member of the Standing Committee of the Tianjin Municipal People's Congress, praised TEDA Administration Committee for its far-sightedness and efficiency.

The committee has been following its slogan ``investors are bosses'' for 10 years. And it has always worked hard to honor its commitments.

Jim Busby, general manager of CTS (Tianjin) Electronics Co Ltd, wrote a letter to the committee recently expressing his company's appreciation of the administration Committee's sincerity and quality service. The story began with CTS's application to call back some employees who were still on holiday during the critical period of the SARS epidemic.

TEDA Administration Committee then helped CTS lay out a detailed and appropriate plan and established a special team to supervise the whole process. Not only was the employees' safety guaranteed, but also the continuation of the company's production was ensured.

In addition, the committee has held thorough and detailed talks on policy-making and has drafted a series of favorable policies to attract investors and facilitate industrial development.

According to the committee's officials, the policies can be categorized into three groups. The first group aims to promote the attraction of high-tech industries and top quality experts to the area. For example, TEDA includes a scientific and technological development fund and risk fund in its budget.

The second group zeroes in on industrial development, and includes policies to encourage investments in infrastructure and manufacturing industries.

The third group of policies are designed to encourage original projects, for which they offer appropriate awards.

As TEDA's officials have said, all the policies aim to speed up the optimization of industrial structure in the area and foster local companies as well as attracting overseas investment.
TEDA's industrial promotion policy feature three prominent characteristics, according to the committee.

Firstly, the committee makes sure its policies accord with the World Trade Organization's National Treatment rules, which require full support for both domestic and foreign-funded companies.

Secondly, the policies are categoried into various classes according to different industries, which makes the whole system clear and open.

Finally, key industries are given priority in the early granting of favorable policies.

Novozymes (China) Investment Co Ltd, a modern Denmark-funded biotech firm, has invested a total of 1 billion yuan (US$120.9 million) in TEDA over the past 10 years. And it always compliments TEDA on its advantageous geological location, excellent service and rich resources in expertise.

This year, TEDA has reformed some of its policies and made new stipulations on house purchasing and annual salaries. For example, it stipulates that Chinese senior managers or technicians with annual salaries of more than 300,000 yuan (US$36,300) who are in great demand among companies have no salary caps once they receive the committee's approval.

The new reforms are expected to attract more investors and professional experts to work in TEDA.

*** Tianjin magnet for investors

The balance sheet for Tianjin Economic Technological Development Area (TEDA) would be the envy of any business. Its gross domestic product is growing by 30 per cent a year; industrial output value totals up to one trillion US dollars; total exports and imports exceed tens of billions of dollars; total fixed assets surpass billions of dollars.

TEDA is one of the most attractive areas for domestic and Asian investors with its central location, favourable policies and efficient management.

Established in December 1984, TEDA was one of the first State-level development zones. It is committed to attracting global capital and fostering modern Chinese industries, especially high-tech industry.

There are more than 3,600 overseas-funded enterprises in TEDA that have collectively invested more than tens of billions of dollars. Over 8,000 domestic companies have settled in the area, 70 per cent of which are private firms.
For years, most of the area's major economic indexes have topped the list of the 49 State-level development zones in China.
Over the past 20 years, TEDA has developed into North China's processing and manufacturing centre and the base for transferring high-tech achievements.

*** Another boom year

Li Yong , the director of TEDA, said the area's GDP had grown by 26.1 per cent in the first half of last year, totalling 20.9 billion yuan (US$2.5 billion), despite the influence of SARS. Li said four major development trends had emerged.

First, the machinery industry, especially automobile manufacturing, has for the first time replaced the electronic communications industry as the fastest growing.

Second, three foreign-funded companies, namely Sumsung, Toyota and Sanyo, have developed rapidly, collectively accounting for more than 85 per cent of the growth in the area's total output value.

Third, TEDA industries have become more export-oriented, with 41 per cent exporting industrial goods for the first six months of 2003.

Finally, the area has attracted strong investment in fixed assets. Monthly fixed asset investment exceeded one billion yuan (US$120.9 million) on average in April and May despite the SARS outbreak.

In recent years, trade has grown at a faster rate than the world economy itself. The amount of currency in daily circulation across the globe exceeds US$1.5 trillion on average.

China is a virgin market for many transnational companies and their capital, with TEDA acting as one of their economic entry points.

According to some experts, the global economy will continue growing slowly but worldwide market demand is expected to rise.

The International Monetary Fund estimates the global economic growth rate will climb to 3.7 per cent next year from 2.8 per cent this year. The total international trade growth rate will rise from 2.2 per cent to 6.2 per cent.

Meanwhile, the restructuring and shifting of international industries, especially the telecommunications industry, will accelerate in the next few years.

All the above predictions suggest there will be more opportunities for China to attract foreign investment and expand exports.

TEDA will no doubt be one of the beneficiaries.

Since the construction of the Beijing-Hangzhou Grand Canal in the Sui Dynasty (AD 581-618), Tianjin has been a strategic post and a grain trade hub based on its waterway transport links.

TEDA, on the Bohai Sea Bay 60 kilometres east of Tianjin central business district, has a convenient transport network and strong purchasing power, which add to its attractions for investors.

According to the international economics journal FORTUNE(and FORBES), TEDA has the advantage over many other export-oriented and processing areas because of its robust economy, favourable investment environment, radiating transport routes, first-rate infrastructure and rich human resources.

These benefits have attracted a succession of transnational companies to the area.
TEDA's roads and expressways connect with other big Chinese cities, while its railways also link with most major domestic cities as well as Europe.

TEDA is close to Tianjin International Airport, the largest air transportation centre in China. And it also boasts the largest international trade port in North China, Xingang Port.

The port has the biggest container dock in the country and provides navigation services for more than 300 other ports in over 170 countries. Most of the cities in West China also choose to ship goods from Xingang Port.

TEDA has laid out a series of favorable policies to promote industry and encourage the development of major brands.

Many of the world's biggest companies, such as Motorola, Coca-Cola and Toyota have set up in the area. The four sectors of telecommunications, bio-pharmaceuticals, machinery and light industrial & food processing have established a strong presence in TEDA.

In terms of telecommunications, the area produces cellphones and displays that command growing market shares at home and abroad.

According to the Ministry of Information Industry statistics, the TEDA's information technology industry made a profit of 10.46 per cent last year, much higher than the national average of 4.29 per cent.

The industrial capital return rate for the TEDA in the past five years has reached 15 per cent, the highest of foreign-invested areas.

*** Development area looks to future

Tianjin Economic and Technological Development Area (TEDA) has been devoting more time to improving its software to ensure that it will be able to achieve rapid and sustainable development in the future so that it will keep in step with China's robust economic growth and bright prospects.

China has so far formed three economic growth regions, namely the Yangtze River Delta, the Pearl River Delta and the Bohai Sea Economic Belt, in which TEDA is located.

Although each of the three regions has its own unique characteristics, they are all committed to the electronic information, automobile and biomedicine industries. Stiff competition is thus guaranteed to be a continuing factor in their co-development.

In 2002, TEDA, together with Shenzhen, Suzhou, Wenzhou, Shanghai Pudong New Area and Xi'an High-Tech Industrial Development Zone were listed as the most robust regions in China by the United Nations Industrial Development Organization.
Aware of the tough competition and golden opportunities, TEDA is trying to overcome existing shortcomings on the way to self-improvement.

The first order of problems TEDA now faces are connected with its investment environment. Its transportation facilities, also, still call for improvement. So does the area's living environment.

Second, the major industry in TEDA, the telecommunications manufacturing industry, is expected to face extremely tough competition in the domestic market.

Some other leading industries in the area, such as automobiles, chemical medicines and food and beverages are also facing very stiff competition.

And the State's limits and strict requirements for the examination and approval of some products are also hindering TEDA's development to some extent.

Third, the change of foreign investors' ways of investing, and the sluggish structural reforms and poor working efficiency of the government impose some negative impact on TEDA's ability to attract foreign investment.

Keenly aware of this, TEDA has begun to launch a series of measures as well as some new projects.

It is paying more attention to establishing efficient information communication channels, capital flow, high-level personnel and technical exchanges and good logistics, a market free of restrictions, clearly defined regulations and high quality service. Trying to forge itself a new economic platform for the 21st Century, TEDA will soon institute a large number of key projects, such as a TEDA library, a financial service park, an international conference centre, a soccer field and a citizen's square.

Some new scenic spots and infrastructure facilitiess have been completed, including a forest park and the Nanhai Road overpass.

With an original planned area of 33 square kilometres, TEDA has set up several industrial parks both outside and inside the area.

This year, TEDA will develop 48 square kilometres of new land west of the original area to foster the growth of its telecommunications, automobile, biomedicine and machinery industries.

It is estimated that the total output value of the newly-expanded industrial zone will reach 50 billion yuan (US$6 billion) by 2010, with a gross domestic product of 14.4 billion yuan (US$1.7 billion).

With a population of about 10 million, Tianjin offers investors a highly-qualified industrial work force at a lower cost.

The northern city has 25 colleges and more than 140 research institutes, which will provide a continuous flow of highly qualified experts and professionals for local enterprises.

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