TEDA in Tianjin – Putting on a Friendly Face for SMEs

The Tianjin Economic-Technological Development Area (TEDA) is renowned within Northern China for its long history as one of the first state-level development zones in China. As such it has attracted over 70 global companies included in the Fortunes 500 List – Honda, Bosch, Bridgestone, Coca Cola, McDonald to name just a few. Over the past decade TEDA has expanded its presence within Tianjin and currently administers 10 subzones throughout the city. The oldest and most mature of these is without a doubt TEDA East and it was here that ECOVIS Beijing spent Wednesday, 13th of August, speaking with German manufacturing companies and visiting the manufacturing and office space available to its clients from Europe and Germany. The aim was to get a deeper understanding of what it is like for European SMEs in particular to invest in TEDA and for their employees to live in the city.

The first meeting took place at the manufacturing site of one of Germany’s largest automotive parts suppliers (the company declined to be mentioned by name). ECOVIS Beijing spoke with its representative about their cooperation with the Investment Promotion Bureau of TEDA. As one of the many Fortune 500 firms located within the zone, it confirmed continuously good relations and high satisfaction with their investment. The goal was, however, to get an impression of SMEs and the support offered by the Bureau to these less profitable firms. Therefore, a reception at Lohmann Adhesive Tape Technologies (Tianjin) Co., Ltd. followed. Counting 130 employees in TEDA, Lohmann is officially categorized as a small enterprise within the zone. It nonetheless claimed to enjoy good collaboration with the Bureau as well as forthcoming and flexible work relations with its representatives.

Because foreign SMEs are often intimidated by the vast scale of TEDA and its countless high-profile investors, the Investment Promotion Bureau is actively trying to change this perception. The newly constructed Modern Services District (MSD) in downtown TEDA East offers space for Representative Offices (ROs) or the offices of Wholly Foreign Owned Enterprises (WFOEs) of small and medium-sized manufacturing companies invested in TEDA. Located in the vicinity of the MSD, the café-like working environment of the JJ-Link Coffee Shop provides start-up companies with the opportunity of working in a seemingly young and creative open-office setting. This new emphasis on start-up companies from China and around the world may likely continue to attract talent and grow the currently small international community in TEDA East making it an attractive place to settle temporarily.

To promote a sense of international living standards and to make the area attractive to expatriates in particular, the Bureau has constructed and invested in a number of key facilities: An international high school (Maple Leaf School) and campus of a top Chinese university (Nankai University) are located at the center of TEDA East; a concert hall and football stadium are planned to introduce a sense of identity and culture; and a vast number of parks and botanical gardens certainly give families enough space to relax. However, reports vary about how liveable the zone truly is: The center of TEDA East is used by the Investment Promotion Bureau as a showcase for the entire development zone. The quality in infrastructure and social facilities varies even within TEDA East, let alone within the nine surrounding subzones – cracks in the neatly polished façade did become visible.

Through its wide-reaching connections in the European business community in Northern China and Tianjin, ECOVIS Beijing understands the tendency of SMEs to rule out TEDA early on in the search for the right development zone. While the initial offers made by the Investment Promotion Bureau are certainly attractive, this support and preferential treatment may gradually fade away if the firm is settled without the prospect of expansion. But while TEDA is channelling its efforts into attracting firms of all sizes, it is today directing more of its resources at SMEs and start-up companies from China and overseas. The stigma that the zone favours large revenue-generating companies will take more than resources but rather time and conviction to evolve – in the meantime, however, ECOVIS Beijing recommends considering TEDA as an investment location that may suit the individual needs best.

	Richard Hoffmann is a Partner at ECOVIS Beijing China. Richard obtained an honor’s degree in law and worked in Germany, America and China for various prestigious law firms prior to joining ECOVIS. He has published more than fifty articles in international magazines, frequently speaks at high profile events in China and abroad and is often invited as a legal expert by international TV. Contact: richard.hoffmann@ecovis.com
Ecovis Beijing is the trusted tax and legal advisor of several embassies and official institutions in China. It specializes in mid-sized international companies and focused on tax & legal advisory, accounting and auditing. If you’re interested in finding out more about tax and legal, don’t hesitate to sign up to our Newsletter or give us a call  +86 10-65616609 (ext 811/806)   or contact us directly via Beijing@ecovis.com