Business

Tianjin emerges from the shadows

By Zhang Jing (China Daily)
Updated: 2010-12-17 15:38

The first wind power plant in Tianjin, the Dashentang Wind Farm, is set to start operating around Spring Festival in February. Cui Meng / China Daily

Tianjin lies about 120 km southeast of Beijing, but that proximity has also forced it into the shadows of the Chinese capital for a long time. The municipality was also home to foreign concessions from the late Qing Dynasty (1644-1911), but foreign investors such as Microsoft and P&G in modern times still favored major cities like Beijing, Shanghai and Guangzhou over Tianjin to set up their headquarters. Few seem impressed by the fact that Tianjin, like Beijing and Shanghai, is also a municipality directly under China's central government. But Tianjin is coming out of the shadows and making its bid to join the major league with a slew of hard-hitting projects.

For starters, it has learnt to embrace its distance from the big players.

Every 15 minutes from 6:25 am to 10:45 pm, a pair of bullet trains called the Beijing-Tianjin City Express run between the two cities. The trains, which made their debut on Aug 1, 2008, run at a top speed of 394 km/h, shortening the original journey that lasted for two hours to 25 minutes.

A second highway that opened in 2008 also connected Beijing, Tianjin and Tanggu, putting the Tianjin Binhai New Area (TBNA) firmly on the radar of investors.

The TBNA covers 2,270 sq km along the coast of Bohai Bay and has a population of 1.47 million. The area is 45 km from downtown Tianjin and 150 km from Beijing.

It includes major projects such as the Tianjin Eco-City as well as a central business center and coastal leisure and duty-free zones.

The eco-city alone covers a total area of 31.23 sq km and has a planned population of 350,000. One-third of the area is built on comprises deserted salt farms, while another third is non-arable land and the rest polluted water.

In November 2007, Chinese Premier Wen Jiabao and Singaporean Prime Minister Lee Hsien Loong signed a framework agreement for the development of Tianjin's eco-city. It aims to build a "practical, replicable and scalable model for sustainable development" and it will serve as a reference for other cities in China with similar conditions.

The project broke ground in September 2008, with the Sino-Singapore Tianjin Eco-City Investment and Development Co Ltd (SSTEC) being the master developer. It is a 50/50 joint venture between a Chinese consortium led by Tianjin TEDA Investment Holding Co Ltd and a Singapore consortium led by the Keppel Group. The start-up phase of the project, covering 7.8 sq km, is slated for completion within the next three to five years, while the entire area will be built within 15 years.

The first wave of residents is expected to move in by 2011 and the price of a number of business areas in the eco-city have already risen to 9,000 yuan (1,020 euros) per square meter.

The eco-city is being touted as the first of its kind in the world to quantify its eco-development by applying 26 key performance indicators in areas such as water, waste management and green buildings.

Shimao Property Group, the city's operator, has promised "2.5 sq meter of green land per capita" and a 50 percent landscaping ratio in line with the project's environmental emphasis.

"Tianjin is short of water and the eco-city's natural environmental conditions are much poorer than other eco-cities in the world. It is essential to make use of water to the fullest," says Zhang Yu, researcher with the State Key Laboratory of Environmental Aquatic Chemistry.

A number of European companies have already signed contracts with the eco-city or showed interest in its green business. These include Sweden's Envac Enviromental Technology Co Ltd and Switzerland's SWICO.

Zeng Hao, business manager with Envac Tianjin, says his group applies a pneumatic waste collection system to free the eco-city from odorous trash bins and waste transfer vehicles by absorbing waste into pipes. The Envac project will cover an area of 8 sq km by 2013.

"It's a great opportunity for eco-business companies," Zeng says.

At the eco-city's business center, a sustainable development financing hub, eco-education, training and research institutes, as well as cultural industries are seeking to create 15,000 to 20,000 jobs for the business park within the start-up area.

Wang Haoyu, the developer's business administration section chief, says its cultural industrial park is the biggest of its kind in the country with registered capital valued at 5 billion yuan (568 million euros), and it is attracting such leading companies as SB China Venture Capital. The park will also set up a copyrights service center to facilitate copyrights trading and protection.

An Xiaogang, deputy general manager of the SSTEC animation industrial park, says more than 100 companies will move to the park by February 2011. The animation park is also collaborating with the world's fastest computer, the Tianhe-1A.

Zhu Xiaoqian, deputy director of the Tianjin Supercomputer Center, says his team has specially designed a server to render animation and run tests using 128 CPUs. Experts estimate it will only take Tianhe-1A a few seconds to render animation that used to take six days.

An says the industrial park encourages original creative works and will set up studios to attract artists. Together with Universit du Qubec of Canada, Tianjin University and other institutions, the park will provide internships to pool talent.

And about an hour's drive south of the eco-city lies the TBNA's financial center of Yujiapu.

Yujiapu is also one hour from the Binhai International Airport and city planners say there will be five subway lines linking it to the rest of the TBNA. Covering an area of 3.86 sq km, Yujiapu is being touted as the world's largest financial center in terms of space. It has 9.5 million sq m of building area above ground and 2 million sq m below the surface. The area also has an underground network that aims to connect all of its buildings.

Tianjin Innovative Finance Investment Co Ltd (TIFI) is the master developer of the financial center. Li Bo, president of TIFI, says his clients single out this area for its design and good fengshui, because "seen from a bird's view, the Yujiapu peninsula looks like a bag to hold money".

Xiao Qitian, head of the TIFI's investment department, says that 115 enterprises have so far registered at Yujiapu with a capital volume of more than 40 billion yuan.

TIFI has also hired a top international team for the financial center. Renowned US urban design and planning company SOM, most famous for their design of the Sear's building in Chicago, is responsible for Yujiapu's comprehensive urban plan and skyline, while Japan's Nikken Sekkei is handling the underground space and network design. EDAW from the US is dealing with the landscape design and Hong Kong's MVA is charged with transportation.

The Rockfeller Foundation, Tishman Speyer and Boston's Thomas H. Lee Partners (THL) have recently followed suit to join the list of foreign companies flocking to Yujiapu, with Tishman investing 6 billion yuan and THL setting up a 5-billion-yuan fund.

Tishman is famous for such master projects as The Rockfeller Center in New York City and the Sony Center in Berlin, while THL is one of the world's oldest and most experienced private equity firms.

"There is so much more potential here in the TBNA. It's a place where miracles will take place," THL Partner's Co-President Scott Sperling says.

"Tianjin's financial center positioning differs from that of Beijing, Shanghai and Shenzhen," says Gong Hongyu, co-chairman of THL.

"The former excels in innovative financial investment such as personal equity, stock right exchange and offshore finance."

"The development of the TBNA is on the right track of strategic deployment by the State," says Wang Zhile, director of the Beijing New-Century Academy on Transnational Corporations.

"China's reform and development started from the Pearl River Delta, followed by the Yangtze River Delta. The TBNA is the third stage, which will help globalize the northern part of China and the Bohai belt in particular. "

Yang Jing and Rong Xiaozheng contributed to this story.