Manufacturing News

Foreign companies embrace opportunities in China's development zone

Every 74 seconds, a car rolls off the assembly line of Tianjin FAW Toyota Motor Co Ltd, in a development zone in China's Tianjin Municipality.

Built in 2002, the joint venture between China's FAW Group and Toyota Motor Corp sold 510,000 vehicles in 2017, raking in sales revenue of nearly 60 billion yuan ($9 billion), according to Wang Gang, general manager of the company.

FAW Toyota is one of thousands of foreign-funded companies that have boomed in the Tianjin Economic and Technological Development Area (TEDA), established in 1984 when China announced the opening up of 14 coastal cities as well as building economic and development areas.

"At the beginning, TEDA only had an area of about 400,000 square meters, and there were only about 20 factories with a total investment of $20 million," said Ye Disheng, former vice mayor of Tianjin, who participated in developing the zone.

TEDA worked hard to establish a good investment environment, and after a rough start, foreign capital gradually began to enter TEDA. Motorola Inc was incorporated in TEDA in 1992, followed by Toyota, Samsung, Novo Nordisk and other well-known foreign companies.

So far, 5,663 foreign investment projects from 55 countries and regions have been introduced into the area, with foreign capital totaling $56 billion.

Sew-Eurodrive Tianjin Co Ltd, a wholly-owned German industrial machine manufacturer, came to TEDA in 1994.

"The company's business turnover has expanded from 30 million yuan to 6.5 billion yuan over the past two decades," said managing director Zhang Shengli.

"Both the investment climate, government support and local machinery manufacturing facilities and other resources are excellent," he said.

To bring the foreign companies to TEDA is important. Likewise, it is also important to retain them. Many foreign enterprises take root in TEDA because they are optimistic about the good business environment of national development zones.

"The idea of putting investors first is the most important thing," said Yan Caiming, manager of PPG Coatings (Tianjin) Co Ltd. She was one of the first employees when the company was established in 1994. "The zone offers a one-stop service, which saves us a lot of time and trouble."

TEDA also makes efforts to solve problems that foreign investors have while working in China.

For example, it has an international school where children of foreign investors or employees at the companies can receive an education. Apartments have also been built to house up to 200,000 employees and their families.

With China opening up more to the outside world, the industrial structure of foreign investment in TEDA has been gradually optimized, focusing on high-end projects.

"Labor-intensive industries have been replaced by low energy-consuming, high value-added advanced manufacturing and high-end services in recent years," said Zheng Weiming, director of TEDA's management committee.

"We are confident about China's market and thinking about establishing a global research center here," said Yan Caiming of PPG.

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