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Tianjin

  • (1) Recent policies of Tianjin to promote inward and outward investment
  • 1) INWARD AND OUTWARD INVESTMENT REGULATIONS OF TIANJIN

In accordance with the Catalogue of Investment Projects Subject to Governmental Verifications (2013) approved by China's State Council, the Administrative Measures for the Approval and Filing of Overseas Investment Projects (NDRC Decree No. 9) issued by the National Development and Reform Commission and the Administrative Measures for the Approval and Filing of Foreign Investment Projects (NDRC Decree No. 12), Tianjin Development and Reform Commission formulated the Tianjin Administrative Measures for the Filing of Overseas Investment Projects and the Tianjin Administrative Measures for the Approval and Filing of Foreign Investment Projects, which were approved by Tianjin Municipal People’s Government in 2014, and issued and implemented on August 22, 2014. It changed Tianjin’s overseas investment project management system and foreign investment management system from an approvalbased one to a filing-based system. At the same time, the power of approving foreign investment projects were further delegated to the authorities of national development zones and the districts and counties. The procedures and requirements for approval were standardized and simplified, and the period needed for the approval was shortened, improving the efficiency. In 2015, Tianjin Development and Reform Commission issued the Circular on Revising Some Provisions of Tianjin Administrative Measures for the Approval and Filing of Foreign Investment Projects and the Circular on the Cancellation of Some Pre-conditions for the Approval and Filing of Foreign Investment and Overseas Investment Projects in Tianjin, further decentralizing the power for the review and approval of foreign investment projects and delegating the power of approval of provinciallevel encouraged foreign investment projects and all the foreign investment projects to be filed to Tianjin Binliai New Area, national development zones and each district and county. At the same time, Tianjin further simplified the declaration requirements for foreign investment and overseas investment projects.

Based on the Administrative Measures for Outward Investment (MOC Decree [2014] No. 3) newly revised by the Ministry of Commerce (MOC) of the PRC, Tianjin Commission of Commerce formulated the Detailed Implementation Rules of Tianjin Administrative Measures for Outward Investment (2014). It changed Tianjin’s management system for outward investment enterprises for

Regional investment analysis report 2015 71 a fully approval-based system to a system that combined approval and filing. The municipal government took over more power for review and approval from the Ministry of Commerce, simplified approval requirements and procedures, and shortened the time required.

2) INWARD AND OUTWARD INVESTMENT REGULATIONS

OF CHINA (TIANJIN) PILOT FREE TRADE ZONE (TIANJIN FTZ)

Starting from the second half of 2014, in accordance with the Overall Plan for China (Tianjin) Pilot Free Trade Zone and the Administrative Measures for the Approval and Filing of Overseas Investment Projects (NDRC Decree No. 9) approved by China’s State Council, Tianjin Development and Reform Commission formulated the Tianjin Administrative Measures for the Filing of Foreign Investment and Overseas Investment Projects in China (Tianjin) Free Trade Pilot Zone, and submitted it to Tianjin Municipal People’s Government. On April 17, 2015, the Circular of the General Office of Tianjin Municipal People’s Government on Issuing Two Administrative Measures for the Filing of Inward and Outward Investment in China (Tianjin) Pilot Free Trade Zone (JZBF [2015] No. 3) was issued. China (Tianjin) Pilot FTZ was officially put into operation on April 21, 2015, and adopted a management system based on pre-establishment national treatment and negative list for foreign investment projects and the filing management system for general overseas investment projects. Filing was to be done by the authorities of each part of the Tianjin FTZ. In addition, Tianjin Development and Reform Commission and the Tianjin Commission of Commerce formulated and issued the Opinions on the Implementation of Security Review in China (Tianjin) Free Trade Pilot Zone, in a bid to establish and improve the national security review mechanism for foreign investment in the Tianjin FTZ.

In accordance with the Overall Plan for China (Tianjin) Pilot Free Trade Zone approved by the State Council and the Administrative Measures for Outward Investment (MOC Decree [2014] No. 3), the Tianjin Commission of Commerce formulated the Administrative Measures for Outward Investment of China (Tianjin) Pilot Free Trade Zone, and submitted it to Tianjin Municipal People’s Government. On June 19, 2015, the Circular of the General Office of Tianjin Municipal People’s Government on Forwarding the Administrative Measures for Outward Investment of China (Tianjin) Pilot Free Trade Zone Made by Tianjin Commission of Commerce (JZBF [2015] No. 47) was issued. According to the Administrative Measures for Outward Investment of China (Tianjin) Pilot Free Trade Zone, enterprises in the Tianjin FTZ shall file their outward investment projects with the authorities of the relevant parts of the Tianjin FTZ. Specifically, they may call the authorities for consultation, make their applications online, and get the license on the day of their application. At the same time, a paperless management system has been put in place and enterprises only need to submit scanned and sealed versions of their business license and filing application through the online overseas investment managementsystem. No paper document is required. Foreign investment in the Tianjin FTZ is managed in accordance with the Administrative Measures for Foreign Investment of China (Tianjin) Pilot Free Trade Zone promulgated by the Ministry of Commerce of the PRC.

3) RELEVANT SUPPORTING POLICIES AND MEASURES

To encourage local enterprises to go global and participate in international cooperation, Tianjin has formulated and issued a series of supporting and incentive policies. The local commerce authority provided support to enterprises that are eligible to make outward investment and launch cooperation by means of direct subsidies and loans with interest discount. Specifically, the direct subsidies apply to legal, technical and commercial consultation fees, survey and investigation fees incurred by Tianjin enterprises for outward investment; the loans with interest discount refer to loan interest subsidies granted to Tianjin enterprises who have engaged in foreign economic cooperation for more than one year. Eligible enterprises that invest in projects related to resource development, set up or acquire manufacturing facilities in BRI countries are entitled to a subsidy of 5-6% of the amount of the registered capital. The agriculture authorities launched a pilot project of insurance premium subsidies for overseas agricultural investment, and 50% of the subsidy covers 50% of the insurance premiums for agricultural enterprises who went global and purchase outward investment insurance from China Export & Credit Insurance Corporation. Tianjin Municipal Science and Technology Commission set up an Industrial Merger and Acquisition Guidance Fund with an amount of RMB500 million to promote cross-border M&A and it encouraged fund users to cooperate with banks that offered green channel for cross-border M&A loans. In addition, there is also a subsidy for demonstration projects of cooperation with BRI countries.

  • (2) Inward and outward investment of Tianjin in 2015
  • 1) GENERAL INFORMATION

In 2015, Tianjin welcomed 1,035 new foreign enterprises, an increase of 53.56% year-on-year, with a total contractual investment of US$31.357 billion. The amount of foreign capital actually utilized was US$21.314 billion. The top three sources of foreign investment were the Elong Kong SAR (US$9.347 billion), the Republic of Korea (US$2.694 billion) and Japan (US$2.593 billion).

In 2015, Tianjin enterprises set up 197 enterprises and institutions overseas, an increase of 87.6% year-on-year. The total outward investment was US$20.54 billion, including US$7.46 billion from the Chinese side, an increase of 1.6 times year-on-year. In 2015, Tianjin enterprises invested in 43 countries and regions, including US$1.75 billion in 70 enterprises in the Hong Kong SAR and US$443 million in 35 enterprises in the United States.

  • 2) MAJOR ACHIEVEMENTS
  • i) Achievements of the reform and innovation in the FTZ. First, the Tianjin FTZ had a clear aggregation effect for foreign investment. Since the establishment of the Tianjin FTZ in 2015, a total of 627 foreign enterprises have been set up there, with USS17.887 billion of contractual investment and US$4.72 billion of foreign capital actually utilized, accounting for 60.58%, 57.04% and 22.33% of the total in Tianjin respectively.

Second, the Tianjin FTZ did a good job in implementing its overall plan and relevant institutional innovations. To date, work has started on all of the 90 tasks listed in the overall plan, undertaken by 31 units, and 63% have been completed. Up to 81% of the 175 tasks on the institutional innovation list have been finished, the "ten ones"1 reform of the administrative system has been basically completed, the negative list management system for foreign investment has been implemented, and a new outward investment management system has been basically established. The reform for trade facilitation focusing on customs, inspection and quarantine has been deepened. The market supervision system based on classified credit risk management and the new inspection and quarantine integration system of the Beijing-Tianjin-Hebei region were recognized by the MOC as best innovative practices and promoted all over the country.

Third, the Guiding Opinions of the People’s Bank of China on Providing Financial Support for the Construction of China (Tianjin) Pilot Free Trade Zone (hereinafter referred to as "PBOC 30-point guideline") was issued, and 25 of the 45 major policy measures were implemented. These included supporting enterprises in the Tianjin FTZ to borrow RMB hinds from abroad to expand funding channels, putting banks in charge of foreign exchange registration for direct investment and implementing voluntary foreign exchange settlement of capital and foreign debts to reduce the currency conversion cost of enterprises, and allowing eligible financial leasing institutions to collect rent in foreign currencies.

ii) Progress in Tianjin's building of an open economy. During the 12th Five-Year Plan period (2012-2017), Tianjin implemented a more proactive opening-up strategy, improved its opening-up system, built carriers for opening-up, enhanced cooperation for opening-up, and improved the overall environment for opening-up. The Tianjin FTZ became a new engine for opening-up and development. Initial results were achieved in the coordinated development of the Beijing-Tianjin-Hebei region and remarkable achievements were made in building an open economy.

First, steady progress was made in attracting foreign investment to key industries. Tianjin has organized promotional events to attract investment. It formulated industry chain investment attraction plans centering on featured industries such as biopharmaceuticals and auto parts, and secured cooperation intentions through promotional events and visits. Tianjin organized business matchmaking events on high-end platforms. Taking the opportunities of the World Economic Forum Annual Meeting in Davos, the World Economic Forum meeting in Dalian and Boao Forum for Asia that Tianjin leaders attended, Tianjin arranged more than 50 economic and trade activities with Fortune Global 500 enterprises and industrial leaders in the world. Talks with senior officials of multinational companies, including ABB, Nestlé, Novozymes, SABIC, Hanwha Chemical Corporation and Deloitte Touche Tohmatsu LLC helped the city secure a number of major foreign investment projects. Tianjin focused on attracting investment from the Global 500 enterprises and implemented a Three-Year Action Plan for Attracting Investment from Global 500 Enterprises. It cooperated with regional organizations to strengthen investment attraction by means of roundtable meetings in key industries and overseas activities. So far, 163 Global 500 companies have invested in Tianjin.

Second, the Tianjin Economic-Technological Development Area (TEDA) has become more developed. Based on the documents of China’s State Council, Tianjin issued the Opinions on Promoting the Transformation, Upgrading and Innovation-driven Development of Tianjin Economic-Technological Development Area to promote the transformation, upgrading, innovation-driven development of TEDA and launched comprehensive evaluation on TEDA’s development. It formulated the Administrative Measures for Tianjin National Ecological Industrial Demonstration Park to promote its green and low-carbon development. Tianjin focused on the development of featured parks, promoting the building of the China-Europe industrial park in Wuqing Development Area and the ecoindustrial demonstration park in Ziya Development Area. Tianjin mobilized these development areas to provide assistance for Xinjiang Uygur Autonomous Region. The enterprises in the national development areas of TEDA, Xiqing and Wuqing were encouraged to go to Hotan, a major oasis town in southwestern Xinjiang, and hold business matchmaking events in its Yutian Tianjin Industrial Park and Cele Industrial Park, improving the planning of the parks.

Third, practical cooperation of the Beijing-Tianjin-Hebei region has been deepened. The industrial and information authorities of the three places signed a strategic cooperation framework agreement for coordinated industrial development and established a joint meeting system. The Strategic Cooperation Framework Agreement for the Coordinated Development of Development Zones in the Beijing-Tianjin-Hebei Region was signed. Together with Beijing and Hebei, Tianjin held a series of industrial transfer matchmaking events and signed contracts for a number of important cooperation projects in areas such as biopharmaceuticals, advanced equipment manufacturing, new energy vehicles and comprehensive utilization of bulk solid waste. In 2015, investment made by enterprises in Beijing and Hebei accounted for 42% of the total investment in Tianjin from other provinces in China, the contractual investment made by Tianjin enterprises in Hebei Province exceeded RMB30 billion, and Tianjin introduced a total of 398 enterprises from Beijing, with an investment of RMB 139.657 billion, and 459 enterprises from Hebei Province, with an investment of RMB34.272 billion.

Fourth, the Tianjin FTZ played its role in serving the coordinated development of the Beijing-Tianjin-Hebei region. The FTZ has been in smooth operation since April. 2015, and providing services for the Beijing-Tianjin-Hebei region. The Tianjin FTZ management committee held 10 roadshows in Beijing

Regional investment analysis report 2015 75 and Hebei to explain institutional innovations and policy innovations for serving local enterprises there. It launched eight measures to promote the coordinated development of the Beijing-Tianjin-Hebei region and drew up the Measures of China (Tianjin) Pilot Free-Trade Zone for the Coordinated Development of the Beijing-Tianjin-Hebei Region, the Plan of China (Tianjin) Pilot Free-Trade Zone for the Coordinated Development of the Beijing-Tianjin-Hebei Region and the Task Division of China (Tianjin) Pilot Free-Trade Zone for the Coordinated Development of the Beijing-Tianjin-Hebei Region. The customs clearance and inspection integration of the Beijing-Tianjin-Hebei region unproved efficiency by 30%. The policies and measures in the "PBOC 30-point guideline” were implemented with the support of the People’s Bank of China and a growing number of enterprises adopted financial leasing for transformation and upgrading. Five direct sales centers for imported goods were set up in Beijing and Hebei and the bonded exhibition and transaction model was promoted across the region.

Hi) Enterprises going global faster following the BRI. First, a macro policy was formulated to determine Tianjin’s direction in implementing the BRI. The Tianjin Development and Reform Commission worked with relevant departments to put forward the implementation plan for the BRI, detailing 31 specific tasks and targets. Tianjin mainly supports energy development, textile and garment processing, and chemical manufacturing projects in its effort to implement the BRI and has listed mining in Kazakhstan, garment processing in Myanmar, coal coking and smelting in Thailand and housing construction in Russia as key BRI projects. In 2015, it changed the direction of support to greenfield investment and cooperation projects on resources and energy in its implementation of the BRI.

Second, initial progress was made by the Chinese Enterprises Investment and Trade Service Alliance, which aimed to help Chinese companies go global. Under the framework of the going-global service alliance, Tianjin Commission of Commerce signed a strategic cooperation agreement with Tianjin Justice Bureau, Tianjin Lawyer Association, the Export-Import Bank of China (Tianjin Branch), China Export & Credit Insurance Corporation (Tianjin Branch) and the Tianjin Branch of ICBC to establish platforms for overseas investment, cooperation, financing and legal services. Drawing upon the experience and practices of developed provinces and cities such as Nanjing, Shanghai and Guangzhou, Tianjin established a political risk blanket insurance system in line with its conditions and held a press conference to aimounce the policy.

Third, Tianjin worked to spur enterprises to go global. It had the achievements of going-global enterprises reported in mainstream media such as CCTV News and Tianjin Daily to encourage enterprises to expand overseas operation. Tianjin held matchmaking fairs for projects in Thailand, the Isle of Man and other countries and regions, and increased the circulation of outward investment and cooperation guidelines to mobilize a larger number of enterprises to contribute to the implementation of the BRI. In 2016, the Chinese investment in BRI countries and regions increased by four times over the previous year.

Tianjin held BRI investment tax policy training activities and invited partners from Deloitte Touche Tohmatsu LLC to share experience with 100 Chinese enterprises who went global, so as to improve their tax management in transnational operation.

Fourth, Tianjin provided services for enterprises to ensure the smooth progress of important projects. The city has improved its project database for outward investment and cooperation and surveyed large enterprises such as Tianjin Pipe (Group) Corporation, Bohaileasing, Tianjin Julong Group and Tianjin Food Group, solving their problems in raw material export and project financing to ensure the smooth progress of their overseas projects.

3) PROBLEMS OF INWARD AND OUTWARD INVESTMENT

The manufacturing industry struggled in attracting investment. As labor costs increase, foreign enterprises placed more manufacturing orders in Vietnam and other countries. Project reseives were insufficient, especially large projects. Foreign investment across different parts of Tianjin was imbalanced, with some districts and counties utilizing little foreign capital. As for outward investment, Tianjin should improve training on laws and policies and provide professional services such as risk relief for going-global enterprises to improve their risk prevention and control capacity. The consular protection mechanism should be improved, a safety risk early warning mechanism and an emergency response mechanism should be established and improved, and international law enforcement cooperation and administrative mutual assistance should be deepened.

4) PROSPECT FOR INWARD AND OUTWARD INVESTMENT IN 2016

Seizing strategic opportunities of China, Tianjin will summarize and promote the experience of the FTZ, promote its innovative policies in various ways and focus on attracting investment to key industries. The actual utilization of foreign investment is expected to increase by 12% in 2016. With the rapid growth of outward investment by private enterprises, the growth rate of outward investment of Tianjin is expected to reach 15% in 2016.

  • (3) Investment in and from BRI countries in 2015
  • 1) INVESTMENT IN BRI COUNTRIES

In 2015, a total of 18 BRI countries have made investment or signed letters of intent for investment in Tianjin. Specifically, 57 investment contracts were signed, involving an actual foreign investment of US$1.65 billion, accounting for 8% of the total foreign investment in Tianjin. Such investment mainly came from Malaysia, Thailand, and Singapore of Southeast Asia, Saudi Arabia in West Asia, and Kazakhstan in Central Asia.

2) TIANJIN'S INVESTMENT IN BRI COUNTRIES

In 2015, Tianjin enterprises established 19 enterprises and institutions in BRI countries, with a total Chinese investment of US$450 million, an increase of 36.3% year-on-year. By the end of 2015, the total number of enterprises and institutions established by Tianjin companies in BRI countries reached 444, with a total Chinese investment of US$3.29 billion, accounting for 28.4% of the total outward investment. The outward investment was mainly for tourism development, commodity trade, chemical manufacturing, agricultural cooperation, real estate development and mining.

3) PROSPECT FOR INVESTMENT IN AND FROM BRI COUNTRIES IN 2016

In 2016, Tianjin will actively contribute to the implementation of the BRI, expand investment and cooperation with BRI countries, strengthen BRI-related research and define key countries and industries for cooperation. Focusing on key markets and leading industries and making industry-wide efforts, Tianjin will mobilize its enterprises to contribute to the implementation of the BRI in 2016. Targeted at key markets, Tianjin will work with foreign investment promotion agencies and trade associations to organize business matchmaking events for inward and outward investment and cooperation projects and guide enterprises to join hands on investment. It will serve and guide the development and expansion of existing projects, extend domestic and foreign industry chains, form overseas industrial clusters and industrial parks based on single large-scale projects. Tianjin will actively make efforts to get projects into the national BRI project database, seek more policy support and gradually establish a supporting policy system for the BRI. At the same time, taking advantage of the institutional innovations of the FTZ, Tianjin will make more efforts to attract investment and raise the quality of foreign investment and conduct accurate and targeted investment attraction by taking the opportunities of international exhibitions and conferences and regional forums and analyzing the industrial advantages of other countries. The ultimate goal is to expand the scope of cooperation and increase the investment of BRI countries in Tianjin.

 
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