Growing with Our Investors—TEDA Takes New Opportunities to Forge Ahead (2015-2019)

Beginning on a once deserted salt pan in 1984, the Tianjin Economic-Technological Development Area (TEDA) has been forging ahead and developed into one of China’s top national-level development zones in terms of economic aggregate, comprehensive investment environment, and globalization level over the past 35 years. In the new round of administrative reforms in Tianjin Binhai New Area (TBNA), the original TBNA Central Business District (CBD) merged with TEDA at the end of 2017, creating new opportunities for TEDA’s opening-up.

As a highland for opening-up, TEDA has been running at the forefront of China’s reform and opening-up since it was born. It has grown into a key platform for attracting foreign investment and a practice base for promoting institutional innovation. TEDA was the first to carry out a Legislative-First management model, the first to propose that “Investors are kings, and projects are lifelines,” and the first to build a “simulated international investment environment”. It also pioneered infrastructure for investors with “new nine availables and land flattening” among other innovations. At the end of 2017, TEDA continued to deepen reforms and merged with nearby TBNA CBD to integrate their functions and policies. As a result, the Free Trade Zone policies of the original CBD would be replicated and promoted throughout TEDA. “This reform has make urban planning more unified, infrastructure more interconnected, and land resources more intensive. The combination of FTZ policies with TEDA’s industrial foundations, especially its manufacturing sector, has created an effect to make 1+1 > 2,” according to a senior executive of TEDA.

With favorable FTZ policies as a huge advantage, TEDA has achieved great progress in high-quality economic and social development. In 2018, the State Council issued a Plan for Further Deepen Reform and Opening-up of China (Tianjin) Pilot Free Trade Zone. Tianjin Pilot Free Trade Zone began to explore new paths and new modes of comprehensively deepening reform and opening-up in a wider range and at a higher level. The plan set 116 out of 128 reform tasks closely related to TEDA’s industrial development. Based on its strong foundations of industries such as automotive, equipment manufacturing, electronics & information, petrochemicals, and healthcare, TEDA utilized FTZ policy dividends in areas like investment and trade facilitation, and financial innovation to promote reform and opening-up as a highland.

TEDA has always been a front-runner in facilitating the business environment to carry out reform and opening-up. In 2015, TEDA was the first to set up an Administrative Approval Bureau within a development zone in China. As early as that time, TEDA recognized that implementing the policy of “streamlining administration and delegating power, improving regulation, and upgrading services” in administrative approval reform was to restructure the relationship between government and market, which means to stimulate market vitality, encourage innovation and entrepreneurship, and create a new type of business environment. In terms of administrative services, the relationship between the government and market entities is, to some extent, one between service providers and clients.

Empowered by the Free Trade Zone since the end of 2017, TEDA adopted the “Development Zone & FTZ” model to further promote the optimization and upgrading of administrative services. Innovations and breakthroughs were also highlighted in aligning with international trade laws and regulations and creating a high-level international business environment. It was just then that Nestlé Tianjin made its visit to TEDA. Earlier in 1994, Nestlé set up its production base in TEDA and then in 1995 established its Asia-Pacific Quality Assurance Center here. The Center was responsible for ensuring food safety and quality testing for more than thirty Nestlé factories in China, and also for checking whether imported food products met Chinese regulations and providing technical support. During 2010-2018, imported food samples sent to the Nestlé Asia-Pacific Quality Assurance Center had to follow the traditional food import process. This not only increased the time for customs clearance but also added complexities and risks due to regulatory differences. How to solve this problem? Nestlé’s manager decided to approach the relevant departments of TEDA. After receiving Nestlé’s request, TEDA immediately conducted detailed policy research and found that the “Free Trade Zone” could be an answer to this question. With no hesitation, TEDA contacted Customs and many other relevant departments for coordination. After discussions and consultations, it was agreed to follow the management regulations of the FTZ for importing food and cosmetic samples for testing. This approach met the special specific needs of food testing and R&D organizations like Nestlé, which brought tangible benefits to businesses.

More similar cases abound in terms of investment and trade facilitation. TEDA adopted the National Treatment Before Market Access & Negative List management model and piloted the relaxation of foreign equity restrictions in various sectors. It helped Liepin become the first internet company in Tianjin to obtain a foreign investment value-added telecom business license and assisted the company in obtaining the first-ever joint venture human resources service license in China. “There were no precedents for this type of qualification approval in Tianjin, but here in the FTZ, a lack of precedent cases isn’t an obstacle,” said an official from Tianjin Free Trade Zone Administrative Commission.

Furthermore, Tianjin FTZ has provided policy, institutional and mechanism support to inject vitality to TEDA’s financial innovation. Policies like the “30 Measures for Financial Reform” and the “Negative List” have broken traditional policy frameworks and delegate many approval powers. This gave a strong stimulus boost to stimulating TEDA’s market. Meanwhile, the reform of the committed, standardized, intelligent, and convenient “One System, Three Innovations” in approval processes were in full swing to make government service more efficient. A “24-hour unmanned approval supermarket” was also launched, where enterprises can handle smart approvals and self-service applications. All the efforts have greatly facilitated enterprises to access government services.

The optimized business environment propelled industries to flourish. After more than 30 years of development, TEDA has developed five leading industries including manufacturing sector, including automotive, electronics, petrochemicals, equipment manufacturing, and pharmaceutical health. A complete industrial chain has been established, with the automotive, electronics, and petrochemical industries each generating over RMB 100 billion in output value. The leading industries were undergoing a high-end transformation and upgrading as its independent innovation capabilities surged. Smart Manufacturing was promoting TEDA’s high-quality development as a strong propeller.

In August 2018, FAW-Volkswagen North China Base went into production. Together with Great Wall Motors and FAW Toyota, the carmaker created a new landscape for vehicle manufacturing in TEDA. By adopting cutting-edge technologies, the Base achieved automated production. VOC control technology and photovoltaic power generation were also introduced to create a smart, digital, and environmental-friendly manufacturer. Dr. Heitzmann, then President and CEO of Volkswagen Group (China), stated that FAW-Volkswagen North China Base further solidified Tianjin’s position as a major automobile manufacturing base in China, driving the development of the industrial chain and attracting auto components suppliers. In the same year, FAW Toyota’s new TNGA plant in TEDA was completed, turned out to be Toyota’s first overseas TNGA factory. The plant adopts Toyota’s new car-making philosophy, which broke quit from traditional production lines and employing modular and intelligent technologies, which set the direction for future manufacturing.

Industrial upgrading has in turn pushed forward TEDA’s business environment to a new level. In 2018, Tianjin released Policies to Accelerate the Development of Intelligent Technology Industries, including a special fund of 10 billion RMB for smart manufacturing to establish intelligent technology industries in Tianjin as a new engine for China’s economic growth. At the same time shortly after, TEDA revised and issued the Interim Measures for Promoting the Development of Advanced Manufacturing in TEDA, providing policy support for scientific industrial development. These policies guided a clear development path for TEDA’s industry to promote traditional manufacturing transitioning to digitalization and intellectualization. The industrial chains were extending to both ends of the “smile curve”. Examples of such growth include the global innovation center for coatings by world giant PPG, the Asia-Pacific R&D headquarters for hybrid and electric vehicle systems by Vitesco Technologies, the launch of the early clinical project R&D center by Asymchem Pharmaceutical, and the operation of the Boya Stem Cell Tianjin Warehouse. Such cases happened at every corner of TEDA.

This area has kept gathering R&D powers from around the world. A key platform for high-end innovation resources clustered in TEDA. To achieve the goal of independently-developed and controllable core technologies, with such as the National SuperComputer Center in Tianjin joined hands with Tianjin International Biomedical Research Institute and other platforms to enhance their collaborative innovation leadership and radiating influence. Here, efforts to cultivate businesses through a tiered approach of Eagle, Gazelle, Leader continue, strengthening the foundation for new economic drivers. A number of internationally leading products with core technologies and independent intellectual property have emerged here: CanSino’s Ebola virus vaccine has been approved for production; Aerospace TaiXin’s “artificial heart” has been successfully implanted in humans, filling a gap in China; Feixuan Technology’s magnetic levitation turbine vacuum pump has reached internationally leading standards, while Deep Blue’s intelligent power floating board has won the prestigious Red Dot Design Award twice.

Meanwhile, TEDA, supported by its advanced manufacturing, has developed a unique path for modern service-oriented industries with a focus on “precision services for the real economy.” recognizing TEDA’s development advantages in integrating production and finance, Great Wall Motors established another subsidiary, Tianjin Great Wall Binyin Auto Finance Co., Ltd. after setting up its vehicle production plant. This was China’s first private capital-based auto finance company. It has actively expanded the automotive finance industry chain, becoming a model for the deep integration of finance and real industry. Today, a number of leading modern service companies such as Zero-K, Orange Family, Didi, Jiexin Finance, Meituan, Lianjia, iQIYI, 58.com, Liepin, Tujia, and SF Express are rapidly developing in TEDA. TEDA has become one of the fastest-growing development zones for modern service industries in China, with this sector providing new momentum for high-quality regional development.

Born in from reform and thriving in through reform, TEDA has been committed to innovation-driven and high-quality development to drive industrial upgrading. A “TEDA Model” for the transformation and upgrading of national-level development zones was born. Over the past 35 years, TEDA has spent relentless efforts in enhancing education, healthcare, business commerce, transportation, and many other aspects. The well-established urban infrastructure satisfaction. boosting residents’ sense of well-being. Landmark buildings such as the Tianjin Chow Tai Fook Financial Center and the Binhai High-Speed Rail Station ablaze the city shine under the sun further illuminated the city. Supported by the policies of Tianjin Free Trade Zone, TEDA will continue to advance the integration of industry and city. Going forward, TEDA is making its step to a new stage for building an world-class international first-class new industrial park.