TEDA Looks Into China’s Future
For the past 30 years, China’s special economic and development zones have been the best predictors of the country’s economic future. Heading into a new decade, China’s development goals and aspirations are clearly marked by the nine industries of the Tianjin Economic Development Area (TEDA).
Over the last decade, the 26-year-old TEDA has sharpened its focus on a selection of industries that range from manufacturing to financial services and research and development (R&D), a spectrum that touches on all aspects of China’s economy.
Traditionally, the pillars of TEDA have been the electronics and telecommunications industry, the food and beverage industry, machinery manufacturing and auto manufacturing. Since its creation in 1984, TEDA has increased its offerings to include petrochemicals, aerospace, biopharmaceuticals, new energy and materials, and financial services.
Located at the Tianjin Port on Bohai Bay, TEDA is well placed to serve this range of industries. It provides a window into China’s interior, with proximity to Beijing, Tianjin and Hebei, a transportation network of high-speed trains and highways, and a number of inland ports. TEDA aims to provide a model of development for economic zones throughout the country.
Electronics and Telecommunications
TEDA was the first R&D manufacturing base for the electronics and telecommunications industry and, consequently, this is the area’s largest industry, comprising 26.2% of total economic output in 2009.
By the end of that year, TEDA boasted 116 foreign-funded enterprises involved in the electronics and telecommunications industry, with a total investment of US$6.37 billion and contracted foreign investment of US$5.43 billion. All of this investment has helped TEDA maintain a dominant position in the manufacturing of mobile phones, digital cameras and LCD screens.
Recently, TEDA has expanded its R&D capabilities. By the end of 2008, TEDA had completed the setup of one national engineering technical center, two municipal-level engineering centers, three municipal-level corporate technical centers, and 10 municipal-level R&D centers.
TEDA is a hub for auto manufacturing in China, with more than 100 companies producing complete cars and auto parts. In 2009, the auto industry in TEDA attained an industrial output value of US$12.3 billion, 19.4% of TEDA’s total output. The area also has been identified by the central government as one of three key locations for the development of China’s national automotive industry. And, over the years, TEDA has become a national base for auto parts manufacturing and export, and offers a complete automotive package—from engines to doorframes and air conditioning systems.
In addition to auto manufacturing, TEDA is also expanding into auto R&D. There are two domestically funded auto research institutes inside the development area, in addition to four foreign-funded independent research institutes. These centers have succeeded in developing technologies for vehicle shock absorption and noise reduction, in addition to technologies for pure-electric vehicles and hybrid vehicles.
Tianjin boasts a rich reserve of petroleum, natural gases and crude salt, and is the only city that has gathered China’s four largest state-owned petrochemical firms in one place. For petrochemical firms looking to find a base in the area, TEDA has proved an ideal location. The area is home to 185 petrochemical firms, including Dow Chemicals, Bridgestone, Cabot and Eastman, all of which produce a range of chemical products such as carbon black, PVC resin, expanded polystyrene (EPS), coating, paint and radial tires.
TEDA’s Nangang Port development is a testament to the importance of this industry, with room to accommodate more than 200 petrochemical products, from upstream products like ethylene to middle-stream and downstream products such as PET, PVC and epoxy.
One of TEDA’s original industries, machinery manufacturing, has expanded to include the production of elevators, petrochemical machinery, wind-power equipment, agricultural machinery and distribution machinery, among others.
With such a strong history in machinery manufacturing, TEDA is now looking to focus on specific sectors within the industry. Equipment for power generation, power transmission, energy conservation and environmental protection will top the list as TEDA expands in the future, as will agricultural equipment and machinery developed for the petrochemical industry.
Over the years, TEDA has invested more than US$30 million to promote innovation in the biopharmaceutical industry. It is home to four state-level R&D centers, five enterprise-owned technology centers and 12 enterprise-owned engineering centers.
The TEDA Biopharmaceutical Industry Fund supports development of the industry with a US$30 million annual budget used to help subsidize R&D, patent fees and project funding. TEDA has been selected by China’s central government to carry out a pilot project exploring ways of streamlining China’s approval procedures for new drugs.
Bolstered by a facility that will test and produce a next-generation carrier rocket, TEDA’s aerospace city is intended to showcase China’s aerospace capabilities and help nurture the latest in aerospace technology.
While TEDA’s aerospace cluster has only recently taken shape in the West Zone, the rocket base has already attracted an assortment of civilian projects.
Food and Beverage
TEDA is home base for more than 142 of China’s food suppliers, including international companies such as Coca-Cola, PepsiCo and Cargill, as well as domestic suppliers such as Tingshin International, Bunge Chia Tai and COFCO Northsea Oils & Grains Industries.
TEDA’s location is particularly vital to the food industry: 11 of China’s 32 megacities are within a 500-kilometer radius. The Tianjin Port will soon open several special-purpose wharfs, built specifically for the inflow and outflow of raw materials for food companies, in the new Nangang Industrial Zone.
New Energy and New Material Industry
In early 2009, TEDA developed a plan to create a Low-Carbon Economy Model Zone, a joint Sino-Japanese project intended to introduce and foster advanced energy-saving and environmental technologies. TEDA has been at the forefront of China’s new energy industry and is home to a number of green-energy pioneers.
With the arrival of wind-energy systems and part suppliers such as Vestas and Dongqi Wind Turbine, a complete wind-energy industrial chain is now located in the region. In addition, TEDA is prioritizing the development of crystal silicon and film solar cell production, and is working to attract the producers of hybrid vehicles and suppliers of hydrogen, geothermal and nuclear energy.
Modern Service Industry
Since the Tianjin Binhai New Area was authorized by the State Council to carry out financial reform and innovation programs, the area has become a center for the financial and modern services industries, growing at a rate of approximately 20% annually. This rapid development has established TEDA as the fastest-growing center of the modern services industry among all of China’s development zones and, by 2009, the area had attracted more than 250 financial enterprises.
Alongside financial services, TEDA is particularly competitive in banking, insurance, nonbanking financial institutions, private equity funds, high-tech R&D and logistics, and service outsourcing. The area is aided by its classification as a service outsourcing base, which enables TEDA to offer a range of policy incentives for service outsourcing.
Forbes Custom is a custom publishing site that features special advertising sections from Forbes magazine as well as industry articles and videos from our partners.
The editors at Forbes were not involved in the creation of this content.
Site Developed by SmartMark Communications, LLC
© Forbes Magazine, All Rights Reserved