The Ministry of Commerce has given approval to the Tianjin Port Free Trade Zone to open a trade and industrial park in the United States. The park, located in Greenville, South Carolina, will provide a base for overseas investment by companies in Tianjin and other regions in China.
A spokesman from Tianjin Port Free Trade Zone Investment, a company operating the park, said an agreement has been signed with Pacific Development of the US. The initial investment will be US$2 million.
"The industrial park will be a great platform for Chinese companies that want to go global," he said.
South Carolina has the highest per capita international investment of any of the states and is one of the country's most important manufacturing bases. Its most important industries include textiles and garments, furniture, tobacco and automobiles, which mesh well with the strengths of Chinese companies.
The park will be a base for companies that plan to conduct production, distribution and trade in the state.
The spokesman said that 30 to 50 Chinese trading agencies and 10 manufacturing companies are expected to be operating in the park in two or three years.
The Tianjin Port Free Trade Zone is the largest free trade zone in northern China and has a sister-city relationship with Greenville. Over 4,000 enterprises from more than 100 countries have invested in the zone, including more than 40 Fortune 500 transnationals.
Analysts believe that industrial parks and trade centers for Chinese companies and products will be a popular mode for Chinese investment.
China is currently constructing in the United Arab Emirates a large trade center that is planned to open later this year. The Dubai-based center will be the largest trading platform China has ever established overseas, with a total investment of US$300 million. It will accommodate about 4,000 Chinese companies.
The UAE, which has a regional position comparable to Hong Kong in Asia, has strong trade links with the Middle East, Africa and East Europe. Dubai, a port city, is the world's third largest harbor for entrepot trade, following Hong Kong and Singapore.
A Chinese business center is planned for Moscow and a Chinatown in St. Petersburg.
Jin Bosheng, an expert on investment from the Chinese Academy of International Trade and Economic Cooperation, said industrial parks and trade centers are an appropriate method for Chinese companies to carry out their global strategies because such clusters provide a more convenient and safer environment. He said he expected the government would encourage establishment of such operations to promote outward investment.
Chinese enterprises are at the threshold of becoming major foreign direct investors in Asia and beyond because of their financial strength and exposure to international business.
China's outward investment reached US$2.1 billion last year, a small amount compared to its potential but a year-on-year rise of 112 percent.
Developing countries are mulling setting up special development zones to attract China's increasing outward investment. For example, Sri Lanka has already opened a special area.
The government recently published the nation's first industry-based guide to help Chinese firms make better choices when they invest in overseas markets. Covering 67 nations and a wide variety of industries, the guide offers suggestions to domestic companies on the selection of investment destinations and industries. Agriculture, mining, manufacturing and service sectors are highlighted.
(China Daily August 10, 2004)