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An overview about Tianjin Economic-Technological Development Area
enorth.com.cn   2004-10-15 09:03

Tianjin Economic-Technological Development Area

Tianjin Economic-Technological Development Area (TEDA) was established on December 6, 1984 with the approval of the State Council of the People's Republic of China. It is one of the first state-class economic-technological development areas in the country. The Chinese version of TEDA is made up by two words , which is pronounced in roughly the same way as its English counterpart. Its first word means "peace", and the second word means "prosperity". The name is emblematic of good luck and could gain wide acceptance among all Chinese around the world.

TEDA is 60 kilometers away to the east of Tianjin and is immediately adjacent to Tanggu District of the city. Its total planned area is 33 square kilometers. In addition, there are also three satellite development areas in the neighborhood: Yixian Scientific and Industrial Zone, Microelectronics Industrial Area and Chemical Industry Area.

TEDA is endowed with enviable advantages due to its geographical proximity to Beijing and Tianjin. It is also within the boundaries of a larger area bordering on Bohai Sea. Densely populated and easily accessible, Bohai Area is a "gold mine" that has enormous market potentials. This area has many cities, with industries and commerce sufficiently developed. People's willingness to pay is exceptional. Therefore, Bohai area offers optimal conditions for economic growth.

TEDA's goal is to become a "new international area of modern industries in the 21st century". With that goal in mind, TEDA is committed to shaping an investment environment where international rules of game are respected and markets are internationally oriented. In the past over ten years since its creation, TEDA has been making relentless efforts to make itself a better place to make investment in and enhance its economic strength. It has now become one of the most alluring investment areas in China and even in Asia.

Now, over 3300 foreign companies have settled down in TEDA. Their total investment amounts to 15 billion US dollars, including such well established multinational giants as Motorola, Nestle, SEW, and Novonordisk. These companies have contributed to the booming development of four key industries: electronics and communications, food, machinery and pharmaceuticals. Vigorous economic growth has ranked TEDA among the best in the country's economic development areas, making it a spearhead of the "coastal new development areas". As an important economic growth point of Tianjin, TEDA has a strategic long-term vision of becoming a "modern industrial area which is the biggest in Asia and the best in China". This vision is a guideline for TEDA's new promising journey towards bigger success. New projects for upgrading the investment environment, the natural environment and the qualifications of people have been initiated in all realms. In the not distant future, a better TEDA based on modern industries, modern management techniques and modern urban philosophies will be coming onto the stage.

TEDA is a new economic area carved out of a barren saline-alkali land. In the past over ten years, its trail-blazers have created, by trial and error, an effective and efficient land administration system tailor-made for TEDA. Land markets have been developing in a healthy way. This has served as an effective guarantee for high economic growth and urban construction in TEDA.

Quality planning and construction has vigorously boosted the appreciation of land values. TEDA has been drawing upon new philosophies and methodologies of urban planning to study the area's functional arrangement, space allocation and landscape aesthetic pursuits. Thus, planning philosophies catering to the specific actual conditions of TEDA have gradually crystallized, making it possible to shed light on the sophistication and charms of the area right from the start of the planning. Quality and rational planning is essential for enhancing land utility. According to "Land Administration Law" newly stipulated, land usage will be regulated by government in China. Land usage regulation means a system wherein the government defines land uses and imposes land usage restrictions in its overall planning, in order to assure the rational usage of land resources and promote the harmonious development of the economy, communities and environment. And land users are strictly subjected to the land uses predetermined by government. As the state's basic land policy, this Law is intended to improve urban planning, construction and administration, promote radical changes in land uses and improve land utilization and productivity. The vigor of the different precincts of finance, trade and living within TEDA will serve as a perfect showcase of the vigor of TEDA as a whole. Therefore, it is essential to work out, in the shortest possible time, a detailed land usage plan for TEDA's different precincts - a plan based on the overall planning. This is for guaranteeing the high standards and high quality of the living precinct to be developed and promoting the integrated development of TEDA. At the same time, TEDA has invested a lot in developing public places, major street landscapes and greenbelts, and the end result of that endeavor is a modern environment catering to the needs of both living and business. A large number of big public projects have improved the urban functions and thus also have helped realize the change of TEDA from a pure industrial area into a modern new-type urban area. All these developments are attracting more and more investors.

Approaches to land development were different in different stages. Initially, land development was funded by state loans. But the rapidly growing need for land at the later stage has made it necessary to utilize foreign funds in land development.

TEDA's development at the initial stage was financed by a state loan of RMB 370 million Yuan (approx. USD 45 million). This loan bred one precinct of commerce and one of living, taking up a total area of 4.2 square kilometers. This was a good start. In 1990, TEDA began to pursue "snowball development", which featured a rationale of "developing a stretch of land, making a rational return on it and then using the return to develop new stretches of land". These three steps were closely tied up with each other and constituted a sound cycle of economic activities. In 1991, TEDA was already capable of developing a one-square kilometer stretch of land per year with self-owned financial resources. In 1992, foreign investment skyrocketed. A lot of land was needed for various projects, but TEDA could not develop sufficient land to accommodate that need. The short supply of developed land was a hindrance to the influx of foreign investment. At this time, TEDA switched to a new rationale of "utilizing the funds of big foreign companies to finance land development for big projects".

In this new arrangement, one or a group of foreign consortiums were allowed to have a designated stretch of land and engage independently in the planning, development and business canvassing in favor of the land. They could establish exclusively wholly foreign-owned companies, equity joint ventures or cooperative joint ventures for this purpose. Thus, many land investors cropped up and large areas of land were developed. More importantly, because foreign investors in land development had to be responsible for canvassing business for their land and making returns on them, they had a big stake in enhancing the land utilization and productivity.

With the ever growing number of foreign companies coming to invest in TEDA, TEDA's self-owned financial resources were not enough to develop sufficient lands to accommodate the fast growing need. But TEDA was quite flexible in switching to a new rationale. A departure from the conventional approach to the financing of land development, this new rationale turned out to be an effective remedy to the scarcity of self-owned financial resources. This new approach also found additional sources of funds to support the lagging infrastructure development. Thus, land development and its related benefits were effectively linked up. Currently, land development contracts that TEDA has signed up to now for various projects involve a total land area of 7.5 square kilometers and funds of RMB 600 million yuan. That represents a land development capability of 2 square kilometers per year.


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Editor: Zhang Jialu

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