TEDA Takes Advantage of Improved Links to Beijing

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TIANJIN, Aug. 5 – Under Tianjin’s current campaign for development, plans are underway to launch accelerated industry enhancement, improve scientific and technological innovation, and enhance the local living standard and overall domestic economy.

As a key player, the Tianjin Economic and Technological Development Area (TEDA) is reforming the Tianjin Binhai New Area (TBNA), located on the eastern coast of Tianjin. In addition, TEDA also supports innovative change in executive management, state-owned companies, and social matters.

Established in 1984, TEDA is one of China’s first state-approved and national-level development areas as well as one of three functional zones of the Binhai New Area.

The central government founded the TBNA well over a decade ago as part of a strategy to implement reform and open up the circum-Bohai region and northern China economically. An investment hotspot these days, the Binhai New Area had a RMB 236.4 billion total output value in 2007, representing 47.1 percent of Tianjin’s total.

With the launch of the Beijing-Tianjin high speed train service last week, the zone’s importance to the region is expected to increase.

At the center of the Beijing-Tianjin Metropolis Economic Circle – which has a 500 km radius and totals 21.2 percent of the nation’s GDP –TEDA has quite the strategic location. Over the years, its focus on the markets of northern, northeastern, and northwestern China has become indispensable.

TEDA is known as one of the country’s manufacturing hubs of electronic and communications items, with its production of mobile phones and monitors the highest in China.

As one of the most successful state-level development areas in the country, the area has topped the Ministry of Commerce’s list 10 consecutive years now for its “comprehensive investment environment in China’s state-level economic and technological development zones”.

The United Nations Industrial Development Organization (UNIDO) has also listed TEDA as one of the country’s most dynamic areas. In fact, for more than 20 years, TEDA has attracted plenty of multinational investment. Enterprises include Motorola, Toyota, and Samsung, for instance.

The third largest city in the north, Tianjin has a long and mature industrial-commercial history. In recent years, the city has seen unprecedented strong economic interest renewed both at the domestic and international levels.

Part of Tianjin’s appeal is its lower labor costs in comparison to Beijing, Shanghai, and Guangzhou’s employment rates. 25 universities and over 140 research institutes also prove beneficial to professionals in the area.

A rise in modern service industries moving into the area facilitates business as well. Foreign banks, software outsourcing companies, and investment enterprises are among examples that have all increased in number.

Tianjin also has an advantageous transportation network. Highways, expressways, and railroads aplenty allow for easy access to other major cities. Furthermore, the first intercity rail line between Beijing and Tianjin just opened last week. The new high-speed train service cuts the 120-km trip to 30 minutes from its previous 70 minutes.

Moreover, the Tianjin Binhai International Airport is located close to TEDA and the second largest airport in northern China after Beijing’s Capital International Airport. Its recent expansion in preparation for the 2008 Beijing Olympic Games has equipped it with many upgrades, including capabilities now to handle 10 million passengers and permit 200,000 planes to take off and land concurrently.

The Port of Tianjin also beats out other top northern Chinese ports such as Dalian’s and Qingdao’s when it comes to shipping. Currently leading in cargo volume, Tianjin is expected, too, to increase general cargo capacity by 42 million tons and container capacity by 1.5 million TEUs.

According to the economic development board of TEDA, select companies in the area will reap double rewards this year. To be specific, enterprises granted Chinese Well-known Trademarks will receive RMB1 million from the Tianjian municipal government, an amount of which is to be matched by TEDA’s management committee.

This new development extends intellectual property rights protection and encourages companies in the area to fortify their brand strategy and trademark.

For more information about TEDA and the Tianjin Binhai New Area, please contact Zhou Xin.

For assistance with legal incorporation and tax advice in Tianjin, please contact Sabrina Zhang, tax partner, Dezan Shira & Associates Beijing office.