Foreign Investment Upgrades from Manufacturing Plants to R&D Centers in TEDA

With China’s expanding opening-up and rapid economic development, foreign-funded enterprises are continuously strengthening their confidence in deepening their presence in the Chinese market. Establishing R&D centers has become an important step for them to advance their localization strategies in China. In TEDA, multinationals’ R&D centers and headquarters are accelerating their gathering. In 2023, PPG launched two major international R&D centers, and NXP Semiconductors put into operation the second phase of its global first artificial intelligence application innovation center. In 2024, Volkswagen Group established Volkswagen (China) Technology Co., Ltd. Tianjin Branch, an important automotive components R&D institution in TEDA. These globally leading R&D centers not only expedite the localization process of foreign-funded enterprises but also bring the latest technologies and talents to TEDA and promote TEDA’s further integration into the global innovation chain.

Today, foreign-funded R&D centers have already covered various fields of advanced manufacturing in TEDA. As one of the country’s best regions in terms of most economic vitality, degree of openness and innovation capability, TEDA boasts three 100-billion-yuan industrial clusters in automobiles and high-end equipment, next-gen information technology, and new chemical materials, as well as a 50-billion-yuan pharmaceutical and healthcare industry cluster. Leveraging TEDA’s robust industrial foundation and open innovation environment, foreign-funded enterprises have strategically positioned their first overseas or globally unique R&D institutions here. These institutions are becoming vital elements of TEDA’s R&D ecosystem and driving the innovative development of regional manufacturing industry.

Recognizing the promising prospects of TEDA’s automotive industry, Panasonic Automotive Systems Development Tianjin Co., Ltd. was established in TEDA as early as 2003. This subsidiary of Panasonic Corporation, the world’s first independent R&D enterprise in the global arena, primarily provides development, design, and related business services for multimedia electronic products to Japanese automakers such as GAC Toyota and FAW Toyota. Since its inception, it has continuously evolved into a key player in TEDA’s automotive R&D field. Similarly engaged in the R&D of automotive electronic products, Denso Ten Research & Development (Tianjin) Co., Ltd., the only R&D enterprise of the Denso Ten Group, was also established in 2003. Leveraging TEDA’s advantages in industry convergence in electronic information and automobiles, the company can swiftly capture market demand, achieve agile innovation, expand its customer base, and drive the rapid development of upstream and downstream enterprises in TEDA’s automotive electronics industry chain. By driving industrial development through R&D and advancing enterprise R&D processes through industrial development, Panasonic Automotive Systems Development Tianjin Co., Ltd. and Denso Ten Research & Development (Tianjin) Co., Ltd. have built a mutually empowering and mutually beneficial cycle with TEDA.

In the field of biomedicine, leading global biopharmaceutical corporations such as Novozymes, Asymchem, WuXi AppTec, and CanSino have established R&D centers respectively in TEDA. As a national-level demonstration base for the neo-industrialization of biopharmaceutical industry, TEDA’s biopharmaceutical industry is flourishing. TEDA boasts over 400 biopharmaceutical companies and more than 30 high-level research institutions and they have formed a complete industrial system encompassing biomedicine, medical devices, in-vitro diagnostics, CRO, and more. Foreign-funded enterprises fully utilize local innovation advantages and engage in a series of collaborations with upstream and downstream enterprises in the industrial chain, investment companies, incubation platforms, hospitals, and universities. This not only expands the market but also accelerates R&D progress and clinical research. The process plays an important role in promoting the development of the biopharmaceutical industry in TEDA and the Beijing-Tianjin-Hebei region as a whole.

Currently in China, strategic emerging industries, especially the new energy vehicle industry, are developing rapidly, while traditional industries are also undergoing transformation and upgrading. As a key hub in the Chinese automotive industry, TEDA was approved as one of China’s earliest national-level demonstration bases for the neo-industrialization of auto industry, with an industrial scale exceeding one hundred billion yuan. In recent years, TEDA has closely followed the trend and actively promoted the development of the new energy vehicle industry, establishing a complete industrial chain for new energy passenger vehicles. Leveraging the rapid development of the new energy vehicle industry in TEDA, foreign-funded enterprises have accelerated their electrification and intelligent upgrades. The establishment of world-class R&D centers for NEV system, represented by Vitesco Technologies and Volkswagen Group, reflects the prosperity of the new energy vehicle industry in TEDA.

After years of accumulation, Vitesco Technologies began transitioning to the new energy and electrification fields in 2019. In order to promote the electrification process of its Tianjin base, Vitesco Technologies Tianjin R&D Center was put into operation in 2021, undertaking the development tasks of hybrid power and electrification assemblies. Seizing the opportunity of Tianjin’s recent vigorous development of the new energy and intelligent connected vehicle industries, Vitesco Technologies has continued to increase its investment in R&D. In April 2023, the Vitesco Technologies Laboratory Tianjin was put into operation in TEDA. New products that originally required R&D verification can now be completed in its Tianjin lab instead of being sent to the headquarters in Germany. This significantly shortened the R&D cycle and effectively promoted technological iteration. As a result, Vitesco Technologies has established a complete ecological chain in the new energy field from design to verification and production in Tianjin. This change is of great significance for optimizing the automotive industry structure in Tianjin.

Similarly, while Volkswagen Group is advancing its transformation and development in the new energy field, it is also paying more attention to localized R&D and innovation. As an important auto component R&D institution of Volkswagen Group, Volkswagen (China) Technology Co., Ltd. Tianjin Branch commenced operations in TEDA in the spring of 2024. The new company focuses on the development of powertrain components for new energy vehicles and, through in-depth cooperation with parts manufacturers in the Beijing-Tianjin-Hebei region, is driving Tianjin to become an important component R&D and production base for Volkswagen Group in China.

Multinationals continue to increase their R&D investment in the field of new energy vehicles and promotes the extension of the TEDA new energy vehicle industry chain towards both ends of the smiling curve.

Since the 1990s, multinational corporations have been establishing their production bases in TEDA. In recent years, these companies have intensified their innovation efforts and set up R&D centers in TEDA, thus forming a development model of manufacturing base + R&D center. This approach not only integrates manufacturing technology into design but also facilitates the quick commercialization of R&D results, promoting comprehensive improvements in R&D and production.

PPG owns the world’s largest coating production base in TEDA. Since entering the Chinese market with the establishment of its Tianjin factory in 1994, PPG has repeatedly expanded its investment and production capacity. To this day, PPG’s business footprint in TEDA continues to expand. In 2023, PPG Battery Pack Application Center and PPG Global Coatings Innovation Center were put into operation successively, marking a leap from production to R&D. Cathy Yan, General Manager of PPG Asia-Pacific, stated, “PPG Tianjin Plant has grown into PPG’s largest production base in the world, not only achieving greater automation in the manufacturing process but also enhancing our technological research and development capabilities. PPG Tianjin will support our development of new technologies across China, the Asia-Pacific region, and even globally.”

Similarly to PPG, Otis has achieved a close integration of manufacturing and R&D in TEDA while continuously upgrading its corporate capabilities. Currently, its largest elevator manufacturing base in the world, the first smart elevator testing center in China, and significant research and development centers are all located in TEDA. Otis’s major investment platform in China and its regional investment headquarters are also established in TEDA, demonstrating the company’s confidence and determination in deeper engagement. Chen Kang, Chairman and President of Otis Elevator (China) Co., Ltd., expressed confidence in the Chinese market and reiterated the company’s strong commitment to investment in Tianjin. “Our confidence stems from the strong support provided by relevant government departments in Tianjin, Binhai New Area, and TEDA over the past 40 years, as well as the continuously optimized business environment in Tianjin and a series of measures taken to stabilize foreign trade and investment.”

In recent years, Tianjin has continuously intensified efforts to attract foreign investment in key sectors. Policies such as “Several Measures of Tianjin Municipality to Further Optimize the Environment of Foreign Investment and Enhance the Attraction of Foreign Investment” and “Several Provisions of Tianjin Municipality on Encouraging Multinational Corporations to Establish Regional Headquarters and Headquarters-type Institutions” have been released to encourage foreign investment in R&D centers in Tianjin, support the upgrading of foreign-funded enterprises to headquarters-level institutions, and extend their reach into R&D and design. TEDA continues to optimize its business environment. Leveraging preferential policies from China (Tianjin) Pilot Free Trade Zone and TEDA Comprehensive Bonded Zone, TEDA provides comprehensive services to support the continuous development of foreign-funded enterprises. High-level headquarters such as Laird Asian R&D Headquarters, FAW Toyota General Headquarters, Nestlé Asia-Pacific Quality Assurance Center, and Nippon Automotive Coatings China Headquarters have gathered in TEDA, driving industrial upgrading and further integration of TEDA into the global market.

Foreign-funded R&D centers play a driving role in China’s industrial innovation. They possess strong innovative capabilities in cutting-edge fields and brings advanced technologies to China. This not only accelerates the production of high-quality innovative outcomes by enterprises but also promotes the R&D process of various innovation entities in China.

NXP Semiconductors has always regarded deepening its presence in China as an important objective, and has strengthen investment in R&D, manufacturing, technical support, sales and services. NXP owns an advanced packaging and testing factory in TEDA, a large-scale local R&D team, and the world’s first artificial intelligence application innovation center. The second phase of the innovation center project, the NXP AIoT Innovation Center, mainly empowers partners to carry out localized innovation through technology training and leading R&D platforms. With this platform, NXP has successively cooperated with relevant government entities in various forms such as the 5G+X application joint innovation cloud laboratory and the Tianjin industry-university integration graduate workstation.

“To adapt to the changes in local customer demand, NXP will gradually expand from supporting products to supporting applications and solutions. NXP will provide higher-level system-grade solutions,” said Ron Martino, Executive Vice President and Chief Sales Officer at NXP.

From manufacturing plants to R&D centers and headquarters, foreign-funded enterprises continue to reinvest in TEDA, gather global innovative resources and promote the high-quality development of TEDA’s industries. Joining hands with enterprises for mutual growth, TEDA is also stepping up efforts to promote technological innovation and commercialization and to become a hub for Tianjin’s advanced manufacturing R&D.