Economy

A boom in Wen’s hometown

Tianjin’s GDP is growing at twice the national average

Made in Tianjin: the Airbus A320

Last week Tianjin was revelling in its status as the ‘Davos of China’. Some will find it an odd comparison: a Swiss town of not many more than 10,000 inhabitants paired with a city of more than 12 million. But, for the week at least, the Chinese city earned the accolade as host to the World Economic Forum, the famous shindig for powerbrokers first convened in Davos in 1971.

For those that didn’t make it to the event, here’s 10 things you need to know about Tianjin:

1 Prime Minister Wen Jiabao is a proud Tianjin native. And as the New York Times points out, the city has “thrived in the [seven] years since Wen became premier.”

2 As a city, Tianjin is a cut above most others in China. Like Beijing, Shanghai and Chongqing it has the same bureaucratic status as a province, giving it a lot more decisionmaking clout.

3 Tianjin was the destination for China’s first intercity bullet train. The 75 mile trip from Beijing takes just 25 minutes.

4 In fact, Tianjin’s not short of mega-infrastructure. Located on the coast, its port is the world’s fifth largest, and China’s third biggest in capacity terms. It expects to see cargo throughput of 400 million tonnes this year. It also houses north China’s largest cargo airport – and is building a second runway to increase capacity. Likewise it is building China’s first eco-friendly coal-fired power plant (using a technology called integrated gasification combined cycle that emits less sulphur dioxide).

5 Tianjin’s most prominent foreign investor is Airbus, which has established an aircraft assembly plant – the only A320 assembly line the aerospace firm has outside Europe. Between January and May it delivered ten A320 single-aisle jets. By 2012 the Tianjin plant will produce four aircraft a month.

6 Airbus isn’t alone. Tianjin received close to $6 billion of FDI in the first half of the year – up 20% from the same period in 2009. Local investment officials think that the total will be closer to $10 billion by year end.

7 One reason for that investment surge: the Tianjin Binhai New Area. It’s a special economic zone that was founded in 2005, and which can offer incentives (tax breaks, land grants) to firms that set up there. It marries a financial services centre with a manufacturing hub. As well as its own dedicated bank (Bohai Bank), it has attracted branches from 400 financial institutions. Its big plan is to be a centre for venture capital and private equity (it established China’s first PE firm, also called Bohai, and claims 272 local funds already). The model: Silicon Valley’s VC culture.

8 The People’s Daily reports that Binhai New Area is so keen to attract innovative firms their investments get approved by local authories in an average of 3.3 days. One key focal point: companies in green energy. Tianjin is keen to leverage its clout in battery manufacturing to become a leader in eco-friendly power and electric cars.

9 It all adds up to a booming economy. In the first half of the year, Tianjin’s GDP increased to Rmb410 billion ($61.1 billion). That represents an 18% increase over the corresponding period in 2009, so about double the national average.

10 The city was once again in the news this week with another investment coup. China and Russia agreed to invest about $5 billion to build an oil refinery in Tianjin. China National Petroleum will have a 51% stake in the joint venture, and Russia’s state-controlled Rosneft will own 49%.


© ChinTell Ltd. All rights reserved.

Exclusively sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.