WORLD WINNING CITIES Global Foresight Series 2013 China’s City Winners Tianjin City Profile 2 China’s City Winners China’s City Winners: Tianjin Jones Lang LaSalle’s View One of the most puzzling aspects of the current cycle is the lack of quality office space. The construction of office buildings is currently When we published our first World Winning Cities profile in 2006, dominated by domestic developers who almost exclusively sell them Tianjin was a city with a strong but generic industrial base, a strata title. As a result, the leading office towers have maintained decent port and some tired real estate stock. Times have certainly occupancy rates in excess of 90% and MNCs have few options for changed, although international real estate investors have been slow expansion. to get the message. Tianjin’s Binhai New Area is another example of a little understood Since 2007, the economy has more than doubled in size and the and poorly marketed area that has not helped the city’s image. city is now home to what is arguably China’s largest aerospace Central to Tianjin’s economy, but located on its eastern edge, the manufacturing cluster. As the industrial base has continued to grow key industrial area has been widely panned for its attempt to create other sectors such as tourism have taken off. Multiple five-star the Yujiapu Financial District. Some of the criticism is well deserved, hotels dot the riverside and Tianjin’s former Italian concession is but projects with 20 year timelines seldom look great only three now a popular pedestrian retail area. The rusting skeletons of half years into the development cycle. No one expects Tianjin’s Yujiapu completed office projects that used to dot the skyline have been to rival Shanghai or Hong Kong, but a city of 13 million should be replaced by iconic office towers and retail centres. able to successfully create a district with a core financial component, We understand why the city has its sceptics. When a city of 13 provided the government first invests in the infrastructure, seeds it million doubles the size of its modern residential and commercial with SOEs and layers on financial incentives. stock all within just a few short years - it looks like a bubble from Tianjin sceptics will continue to abound, but just as the leaders of almost every angle. However we have observed that when a city Tianjin have finally worked out how to leverage their industrial and of this size retools, the overcapacity created short term can be population base, some investors are positioning themselves to take absorbed in mammoth cycles of take up that follow. advantage of one of China’s fastest growing economies. HEILONGJIANG JILIN XINJIANG Shenyang LIAONING HEBEI INNER MONGOLIA Beijing Tianjin Dalian Jinan NINGXIA HEBEI SHANXI Qingdao QINGHAI SHANDONG GANSU Zhengzhou Wuxi Xi’an JIANGSU SHAANXI HENAN Nanjing Suzhou TIBET Hefei Shanghai HUBEI ANHUI Hangzhou Chengdu Wuhan Ningbo Chongqing ZHEJIANG SICHUAN Changsha JIANGXI HUNAN GUIZHOU FUJIAN Taipei Tier 1 Core Kunming GUANGXI Xiamen GUANGDONG YUNNAN TAIWAN Tier 1.5 Transitional Guangzhou Dongguan Nanning Tier 2 Growth Shenzhen Tier 3 Emerging Hong Kong Macau HAINAN Tianjin City Profile 2013 3 Tianjin in Numbers Economic Dashboard Size Tianjin Beijing Chengdu Shenyang Chongqing Area (sq km) 11,920 16,411 12,120 13,000 82,403 Permanent Population 13.5 20.7 14.1 8.1 28.9 (million) Registered Population 74 64 81 89 114* (%) GDP 1,288 1,780 814 670 1,146 (RMB billion) Growth GDP 13.8 7.7 13.0 11.0 13.6 (% y-o-y) Permanent Population 2.5 3.1 -0.1 -0.6 7.3 (% pa 2005- 2011) Infrastructure Air Passengers 8.1 81.9 31.6 11.0 22.1 (millions) Openness FDI 13.1 6.4 4.9 5.1 6.3 (USD billion) Note: Values are for 2012 * Chongqing has a significant number of registered citizens working outside of the city, which results in this high number. Source: National Bureau of Statistics of China Tianjin’s Competitive Position Vital Statistics 1 1st in China for GDP growth rate (2010, 2011 and 2012) 1 1st in China for dynamic growth potential (2012) 4 4th in China for government transparency (2012) 4 4th in China for attractiveness of property development (2012) 4 4th in the world for GDP growth rate to 2025 (2011) 5 5th in China for development potential (2011) 12 12th in the world for total GDP by 2025 (2011) Source: China Institute of City Competiveness; Chinese Academy of Social Sciences; Jones Lang LaSalle 4 China’s City Winners City Overview expansion in recent years. According to the municipal government’s 12th Five-Year Plan, Tianjin aims to boost advanced manufacturing One of the world’s fastest growing cities industry and to also accelerate the development of a modern Tianjin is located in China’s north-eastern Bohai Bay area, about services sector, the latter of which is projected to contribute to half of 140 km south-east of Beijing. It is one of the four municipalities of the city’s total GDP by 2015. the People’s Republic of China along with Beijing, Shanghai and Tianjin’s expanding urban area Chongqing. In recent years, Tianjin has experienced extraordinary With a total area of 11,920 sq km, Tianjin comprises 12 districts, economic development at a rate faster than the national average, three counties and the Tianjin Binhai New Area (TBNA), which earning the accolade as one of the world’s fastest growing large constitutes a sub-provincial city. In terms of economic and real cities. Its growth has been underpinned by massive infrastructure estate development, the city’s key geographic areas are as follows: investment, high levels of foreign direct investment and strong policy support from central government as one of the country’s key national • Central Tianjin (comprising of Heping, Hexi, Nankai, Hedong, growth poles. According to Jones Lang LaSalle’s China50 research Hebei and Hongqiao Districts) is the city’s main business area. report, Tianjin has the highest level of economic development It is where most multinational services firms and retailers, outside of China’s Tier 1 Cities. as well as its main commercial property developments, are concentrated. With a coastline that stretches approximately 153 km, Tianjin has the biggest port in Northern China, which has and continues to fuel the • TBNA, with an area of 2,270 sq km, is (after Central Tianjin) the expansion of the city’s trade, shipping and logistics sectors. The city city’s second strongest area for real estate and manufacturing is also the largest industrial centre in the region, with manufacturing activity. It’s a key economic engine for the city, consistently the main contributor to the local economy. Tertiary industries, such reporting economic growth in excess of 20% per year since as finance and business services, have also experienced rapid 2006. Within the TBNA, areas that are witnessing major development include: City Evolution: Economy Score Improvements, 2009 - 2012 Tianjin • Tianjin Economic-Technological Development Area Suzhou Tianjin (TEDA). One of the first state-level development areas Wuhan Suzhou approved by the State Council of the PRC, TEDA has Chongqing Wuhan established itself as the most important manufacturing Hangzhou Chongqing Hangzhou base in Tianjin, and is now dominated by international Nanjing Nanjing manufacturing giants such as Samsung, Motorola and Chengdu Chengdu FAW-Toyota. Currently, all of the Grade A office space in Dalian Dalian the TBNA is located within the TEDA Modern Service District Shenyang Shenyang Dongguan Dongguan (TEDA MSD), the first phase of which was completed in Changsha Changsha 2011. Several reputable local and domestic developers have Wuxi Wuxi launched high-end residential projects in the area, including Qingdao Qingdao Vantone Central Park, Vantone Mansion and Warner Jinan Jinan Garden. Ningbo Ningbo Xi’an Xi’an • Yujiapu Financial District. Covering a land area of some Foshan Foshan Hefei 3.86 million sq m, the district has 120 planned plots which Hefei Zhengzhou will equate to a total construction mass of around 9.5 million Zhengzhou Changzhou sq m, of which over 50% has been allocated for office Changzhou Low High space. Positioning itself as the financial innovation centre Low High 2009 2012 for Northern China, this large-scale project commenced its 2009 2012 Source: China50, Jones Lang LaSalle four-phase construction in 2009; no exact date has been set for its completion. Tianjin City Profile 2013 5 • Sino-Singapore Tianjin Eco-City (SSTEC). A joint venture Area between a consortium of Singapore and Chinese companies, SSTEC is a planned 30 sq km sustainable residential ‘model city’ designed to create a liveable and eco-friendly TBNA community for 350,000 residents by 2020. Thus far, the Central Tianjin overall scheme has attracted recognised developers from across the globe, including Mitsui Fudosan Residential Co., Other Districts Ltd. (Japan), Sunway City Berhad (Malaysia), Samsung C&T Corporation (Korea) and Ayala Land, Inc. (Philippines). SSTEC will be providing the infrastructure and amenities, which will include education and medical facilities, as well as retail areas. Greater Tianjin 2011 GDP WUQING DISTRICT JIXIAN COUNTY BEICHEN LI C HONGQIAO HEBEI BAODI HEDONG DISTRICT HEPING NANKAI WUQING HEXI DISTRICT NINGHE COUNTY BEICHEN JINNAN DISTRICT DISTRI DONGLI 2011 Population DISTRICT XIQING Central Tianjin DISTRICT JINGHAI BINHA JINNAN Greater Tianjin COUNTY NEW ARE DISTRICT Haihe River High Speed Railway Line JINGHAI Tianjin Inner Ring Road COUNTY BINHAI Tianjin Outer Ring Road NEW AREA Area 2011 GDP 2011 (sq km) (RMB billion) Population Source: Tianjin Municipal Statistics Bureau (million) TBNA 2,270 620.7 2.5 Central Tianjin 173 231.7 4.5 Other Districts and 9,460 278.3 6.5 Counties Source: Tianjin Municipal Statistics Bureau 6 China’s City Winners Demographics and Employment The surge in people numbers is reflected in the escalation in the size of Tianjin’s labour force which had reached over 7 million by 2011, Tianjin’s total permanent population stood at 13 million by end 2011, an increase of 41% since 2005.