Foreign Enterprises Investing Heavily in TEDA See Growing Momentum
Tianjin, the largest costal city in North China, is the birthplace of China’s modern industry. The city is favored by foreign investors for its strong industrial foundation, prime location, and world-class support services. It is not only a distribution center for global goods, but also a hub for foreign capitals and enterprises, with a galaxy of Global 500 companies and industrial leaders settled in the area. Today, Tianjin is home to several influential industrial clusters, including the Tianjin Economic-Technological Development Area (TEDA). The AmCham China Quarterly examines some of the success stories from member companies with operations in TEDA.
Established on December 6, 1984 with the approval of the State Council, the Tianjin Economic-Technological Development Area (TEDA) is one of China’s first national-level development zones. During an inspection tour to TEDA back in August 1986, Deng Xiaoping, the chief architect of China’s reform and opening-up, wrote: “Development zones are of great promise.” More than three decades later, TEDA has grown to become a national-level development zone with ten sub-zones boasting the biggest economic scale, high-level alignment with global standards, and best comprehensive investment environment in China.
TEDA is a major destination for foreign capital in Tianjin and it is surpassing its peers in the utilization of foreign investment. In 2021, the actually utilized foreign capital reached $1.469 billion dollars in TEDA. From manufacturing to modern services, foreign players span almost everywhere. They increased capital and expanded production, or settled new projects, being an important driver of TEDA’s economic growth.
TEDA Draws Major Foreign Companies to Tianjin
As early as the 1980s, foreign capital started to flow into TEDA. It is a testament to TEDA’s prosperity and openness.
Foreign Companies Span Pillar Industries
By the end of 2021, TEDA has introduced 6,362 foreign-funded projects from 97 countries and regions, including 523 projects by 117 Fortune 500 companies. These projects mean that almost all pillar industries are represented in TEDA. In the automotive sector, carmakers such as FAW-Toyota and FAW-Volkswagen, as well as 200 auto parts providers, including Vitesco Technologies and Kumbo Tire, form a fully-fledged auto ecosystem. In the high-end equipment sector, SEW and OTIS are seeing rapid growth, SAMSUNG, NXP, and Laird have unveiled new breakthroughs in integrated circuits as well as electronic components and chips which has promoted the formation of a world-class next-gen IT cluster. In the area of chemical new materials, SSTPC and Shell are experiencing steady growth in TEDA. As for pharmaceuticals and healthcare, Novo Nordisk, GSK, and Nestle have all increased their capital and expanded production. The growth of these companies pushes forward the rapid development of TEDA’s industries.
Multinational Headquarters Economy in Full Swing
TEDA has become a magnet for high-end technological industries, attracting multinationals with the possibility of establishing a headquarters economy. These organizations are looking to access broader markets in China and even the Asia-Pacific region through TEDA’s competitiveness in industries and location. So far, TEDA is home to 10 quasi-headquarters of multinationals recognized by the Tianjin Commission of Commerce, accounting for almost half of those in Tianjin. Set up by enterprises from Europe, the US and Japan, these quasi-headquarters have injected a new vitality to the regional economy. The headquarters span such fields as biomedicine, next-gen IT, and auto & high-end equipment, pushing TEDA to integrate into the global market.
A Hub for Global Innovation and R&D Centers
Foreign companies continue to expand investment, develop new businesses, and increase R&D spending in TEDA under the headquarters economy. TEDA has now evolved from an initial production base to a hub of global innovation resources. FAW-Toyota, Honeywell, Vitesco Technologies, and PPG have all set up R&D centers, Nestle has established a quality assurance center of the Asia-Pacific region, and OTIS has a testing center in TEDA. The innovation capital, technology, and talent these companies bring to TEDA enable the region to embrace global-standard innovation resources and welcome faster economic growth.
A Magnet for Foreign Capital and the Driving Force Behind Foreign Enterprises
Bolstered by national strategies such as the Belt and Road Initiative, the Coordinated Development of Beijing-Tianjin-Hebei Region and the China (Tianjin) Pilot Free Trade Zone, TEDA is able to provide unprecedented opportunities to foreign investors. Robust growth of businesses is inseparable from the strong industrial foundation and superior business environment here. TEDA keeps on improving business environment and government service efficiency. In 2021, the Tianjin Juilliard School, the first overseas branch of the Juilliard School in New York, was put into operation, fueling up the high-quality development of TEDA. The ever-improving business environment has created more possibilities for businesses to take root, expand and thrive in TEDA.
PPG: From Manufacturing Plant to Global R&D Center
PPG is transforming its TEDA production base into an R&D center. So far, the PPG Coatings Global R&D Center, which is currently under construction, marks PPG’s first global R&D center outside the US, and boasts an investment of 550 million yuan. The center is due to be completed by the end of 2022.
With initial operations beginning in 1994, the PPG TEDA plant – which was also the company’s first plant in China – has grown into the group’s largest coating production base. In 2018, PPG Coatings Global R&D Center settled on TEDA for its location. “The service concept of TEDA is wonderful. Enterprises are their first priority. The business environment is favorable for business growth. That’s why we choose to get rooted in TEDA,” said Yan Caiming, General Manager of PPG Asia Pacific.
OTIS: Serving the World from TEDA
OTIS, an international elevators and escalators giant, has a long history of investment in TEDA, beginning in 1998. In May 2020, the registered capital of Otis Elevator (China) Co., Ltd. increased to 1 billion yuan from 298 million yuan. In September 2021, OTIS announced its first intelligent elevator testing center, Zhong Ao Intelligence Technological Development Co., Ltd., in TEDA.
The elevators and traction machines produced by the OTIS TEDA plant are widely used in world-class construction projects. The elevators installed in the Shanghai Oriental Pearl TV Tower, the Guangzhou TV Tower, the Tianjin CTF Finance Centre, and the Shanghai World Financial Center are all manufactured by the OTIS TEDA plant. So too are the elevator traction machines inside the Empire State Building in the US.
Across industries, many foreign-funded enterprises have flocked to TEDA from all over the world to build cutting-edge factories and explore new business. From manufacturing to R&D and innovation, from single factories to international headquarters, these firms have put down roots in TEDA and committed themselves to growing together with the city. These enterprises have become an important part of TEDA’s story, promoting the upgrading of regional industries and boosting the economy, establishing TEDA as a world-class neo-industrial city.