Betting on Green
Manufacturing hub and port city Tianjin looks to green technology to stay competitive
Sitting on the shore of Bohai Bay, Tianjin has in the last three decades transformed itself from a historic port city to one of China’s major manufacturing hubs and is now looking to become China’s leading city for green technology.
Tianjin straddles the path from Beijing to the sea, making it a natural center for commerce going back to the Ming Dynasty. But despite this seeming advantage, Tianjin has often been in Beijing’s shadow, when competing for resources for development in the early modern era, causing the city to fall behind cities to the south such as Shenzhen and Guangzhou.
The founding of the Tianjin Economic-Technological Development Area in 1984 – at the time one of only a handful of areas open to export zone experiments – opened the municipality to foreign investment and attracted a long list of manufacturing firms, including a who’s who of Fortune 500 companies such as Toyota, Samsung and Motorola.
Electronics, drilling, banking and chemical companies feature prominently among TEDA’s investors. TEDA has been one of the most successful of China’s development zones, increasing GDP fourfold since 2001 to US$24.3 billion in 2010. The municipality’s GDP swelled to US$134 billion in 2010, a 17.4% year-on-year growth rate.
But TEDA’s advantage as an approved foreign investment point has slipped in recent years with the rest of the country increasingly open to foreign companies; Tianjin is now making a long-term bet on green technology to stay competitive. Tianjin’s fledgling eco-city concept is a test case that it says will create “green” residential and commercial areas, a feat that local governments elsewhere in China have largely failed to achieve.
“Is Tianjin a green city? No, and anyone who has been there will tell you it’s not. I drove down there one time and it looks kind of like Mad Max Beyond Thunderdome,” said a foreign analyst familiar with the city. “But that also provides the catalyst for Tianjin to change as well.”
What Tianjin does have compared to many other cities is the cash to fund such an initiative, in addition to the technology and support of many international firms with facilities in the city. Green tech companies in TEDA include Otis Elevator, which opened what it called the world’s first green elevator factory, and Danish wind turbine maker Vestas Wind Technology. Spain’s Gamesa also makes turbines within the municipality.
Many of these technologies don’t help Tianjin’s environment to any great extent locally, as most of the wind turbines, for example, are actually installed in western China, said Richard Brubaker, an adjunct professor of sustainability at China Europe International Business School. But green companies do generally have a smaller carbon footprint than traditional manufacturing.
Much of Tianjin’s effort to be a leader in environmental technology is focused on the Sino-Singapore Tianjin Eco-City, which broke ground in 2008. The 30-square-kilometer eco-city – developed in partnership with Singapore – hopes to attract green businesses and provide environmentally-friendly housing to 350,000 residents by 2020.
Several attempts at creating eco-cities elsewhere in China have failed. The proposed eco-city of Dongtan west of Shanghai was suspended after its main political backers left office, some of them accused of corruption, and their successors did not pursue the eco-city further. Similar projects in other parts of China have been abandoned due to cost overruns, failure to follow design plans in construction and miscommunications. But Tianjin may succeed where others failed, Brubaker said.
“When it comes to the eco-parks in China, [Tianjin’s is] by far the most advanced to date,” he said. “And unlike others that have been designed, agreed upon, won awards and then gone nowhere, this park is actually seeing investors laying stakes in the ground.”
This support from the local government, Beijing and the partnering with Singapore all bode well for the project. Singapore has already created a high profile industrial park in the city of Suzhou just west of Shanghai which although not green, has been very successful. Two Singapore executives from that project are now charged with planning and business strategy in the Tianjin eco-city.
Of more than US$500 million of commercial investment in the eco-city, 46% has come from Singaporean companies as of December 2010, Aaccording to The Straits Times.
National officials have lined up behind the Tianjin’s eco-city unlike Dongtan, which was predominantly a local effort, and this could help see the project to completion, Brubaker said.
The growing eco-city will not be a cure-all for Tianjin’s environmental problems. The zone will have only 350,000 residents out of a total population of 10.43 million, so it should be used more as a model, Brubaker said. What is learned within the eco-city can be important in terms of policy and development well into the future.
“They should be trying things in the eco-cities to see where they get the biggest bang for their buck and then roll those technologies out across China,” Brubaker said.
Tianjin may or may not become China’s leading green city, but trying to stake a claim to that title will go some way towards attracting green-minded investment and help to better position the municipality for continued growth.