Welcome!

News Feed Item

Repositioning Beijing: A Tale of Two Cities

New York and New Jersey, San Francisco and Oakland – just some of the cities that have sprung up alongside one another all over the world, with one often fulfilling functions that the other cannot.

The most obvious such example in China is perhaps Shenzhen, which rapidly grew into a sprawling agglomeration of 7 million people to serve as a manufacturing and services hub for nearby Hong Kong.

Now something similar might be about to happen further north. In late February 2014, China’s President Xi Jinping said it was time for a new approach to “positioning Beijing”.

Although Beijing is attractive because it is the capital, Mr. Xi said some of its functions would be better off located in nearby Tianjin, a much less expensive city with a slightly smaller population that can be reached in about half an hour by high-speed train.

Mr. Xi said Beijing, Tianjin and Hebei Province – which together have a total population of 100 million people – should be considered as one big cluster for planning purposes instead of silo-ed against each other. The Chinese leader added that a shared regional culture and social norms as well as family ties would support such integration.

“China's regions are enormous markets in and of themselves. Tastes and regulatory environments vary significantly between different regions, making it important to recognise their specific characteristics,” said Duncan Innes-Ker, China economist at the Economist Intelligence Unit. “History has also resulted in very different economic profiles among regions. Building on these characteristics has been key to successfully developing local comparative advantages.”

Tianjin is already doing its best to serve as an alternative to Beijing. Its Yujiapu district is aiming to become a headquarters hub for China’s national-level State Owned Enterprises, while the Tianjin Economic-Technological Development Area (TEDA), which is consistently ranked as China’s top development zone since two decades ago, is bent on hi-tech innovation as well.

That means investment in facilities for hi-tech companies that may not be available in the capital.

China’s version of Silicon Valley, dubbed ‘Silicon Hutong’ is located in Beijing’s Zhongguancun district, near the country’s elite universities.

But it’s not an easy place to be for startup firms, many of which must grow without significant outside investment and find a way to cover their costs. Beijing rents alone are as much as three times higher than in Tianjin.

“Many high-tech companies come [to TEDA] from Beijing, and Beijing and Tianjin form a mega-city,” said Zou Fang, Deputy Director of TEDA’s Investment Promotion Bureau.

“The technology achievements and capital mostly come from Beijing. But Tianjin has something special to offer to complement Beijing – that is low costs, development space, government support, and a service mechanism. Many Beijing firms are start-ups that need such a growth environment.”

To this end, TEDA has developed the Tianjin-Beijing Interconnected Entrepreneurship Promotion Center, with Zhongguancun as a key collaborator. It was visited by Chinese Premier Li Keqiang last December.

Such inter-regional initiatives are moving China into the same league as the US when it comes to supporting entrepreneurs. “Innovation is not a zero-sum activity. Different regions have different strengths, not just domestically, but internationally,” said Dr. Olaf J. Groth, Managing Director of advisory firm Emergent Frontiers Group LLC; Professor of Global Innovation, Strategy, Organization & Economics at HULT International Business School; Co-author of the “The Bay Area Innovation System – How the Bay Area Became the World’s Leading Innovation Hub and What Will Be Necessary to Secure Its Future” published by the Bay Area Council Economic Institute.

“In the US, much of the cleantech innovation originates in California, but is highly dependent on partners in other regions, such as the mid-west and south-east of the US, Germany, France, Japan or Korea, where many automobile manufacturers are located,” said Groth. “As more and more domains converge, it makes no sense to tether a venture to one certain location, but rather to let it source its inputs and even to move where it is best supported in a given stage of its growth.”

As a part of the support program to high-tech start-ups, TEDA administrator also purchases products and services from the big Chinese IT service provider Teamsun, such as cloud services, server capacity and technical training, which are then given to tenants free-of-charge.

Although this accounts for just 6 to 7 percent of Teamsun's overall operation, General Manager of Teamsun Zhou Peiyong said it has become strategically important to their business, as down the line the firms that benefit often approach Teamsun directly and become clients.

“We have found that this cooperation pattern has secured its own viable business model, which is win-win for all: to the tenants, to our company as a service provider, and to the whole region,” said Zhou. “In fact, TEDA is the first industrial park ever to have piloted this model in China. And now Zhongguancun is following suit,” he added.

TEDA also offers a wealth of financing options for growing companies. Its status as a development area means there is less red tape to wade through and it is now home to China’s first wholly foreign-invested venture capital firm and China’s first industry-focused private equity firm. There are also nine microfinance firms, creating a robust growth-environment for SMEs.

In late February, TEDA announced the creation of an Internet-based financial services cluster, further working on the convergence among the region’s top-notch IT industry and financial innovation.

“Tianjin has a very solid bricks-and-mortar industry base, including the port economy and trade, etc. That is extremely important critical mass for internet business to thrive because after all the click is there to serve the brick,” said Luo Mingxiong, executive director of China’s Internet Finance Lab and vice-president of Beijing Software & Information Services Exchange.

Luo said more than two-thirds of commercial factoring firm licenses and more than half of financial leasing firm licenses in China are held in Tianjin.

“Tianjin and TEDA have done great work in piloting innovation in the financial service sector. All this is encouraging Tianjin-based enterprises to embrace the innovation economy and create a unique economic landscape.

“On top of this, it’s inevitable that many Beijing-based companies will relocate, driven by factors such as high housing-cost. This is a great opportunity for Tianjin and so it’s imperative that the city works hard to synchronize its planning and overall vision with Beijing,” said Luo.

While Beijing and Tianjin share a cultural identity, some observers argue that different perspectives are also invaluable for stimulating new ideas.

“One of the exceptional attributes that China and the US share is heterogeneity and diversity,” said Sara Sandford, an attorney with the law firm Garvey Schubert Barer.

“The related diversity of perspectives and ideas have often been touted as the foundation of innovation in the US. China has the same unique opportunity to use heterogeneity to the benefit of its efforts to innovate and develop new technology and business...[For regional collaboration to work,] they also need to create an infrastructure that allows for greater sharing of ideas,” she added.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Large scale deployments present unique planning challenges, system commissioning hurdles between IT and OT and demand careful system hand-off orchestration. In his session at @ThingsExpo, Jeff Smith, Senior Director and a founding member of Incenergy, will discuss some of the key tactics to ensure delivery success based on his experience of the last two years deploying Industrial IoT systems across four continents.
With the proliferation of both SQL and NoSQL databases, organizations can now target specific fit-for-purpose database tools for their different application needs regarding scalability, ease of use, ACID support, etc. Platform as a Service offerings make this even easier now, enabling developers to roll out their own database infrastructure in minutes with minimal management overhead. However, this same amount of flexibility also comes with the challenges of picking the right tool, on the right ...
With over 720 million Internet users and 40–50% CAGR, the Chinese Cloud Computing market has been booming. When talking about cloud computing, what are the Chinese users of cloud thinking about? What is the most powerful force that can push them to make the buying decision? How to tap into them? In his session at 18th Cloud Expo, Yu Hao, CEO and co-founder of SpeedyCloud, answered these questions and discussed the results of SpeedyCloud’s survey.
Organizations planning enterprise data center consolidation and modernization projects are faced with a challenging, costly reality. Requirements to deploy modern, cloud-native applications simultaneously with traditional client/server applications are almost impossible to achieve with hardware-centric enterprise infrastructure. Compute and network infrastructure are fast moving down a software-defined path, but storage has been a laggard. Until now.
DevOps at Cloud Expo – being held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises – and delivering real results. Am...
"This week we're really focusing on scalability, asset preservation and how do you back up to the cloud and in the cloud with object storage, which is really a new way of attacking dealing with your file, your blocked data, where you put it and how you access it," stated Jeff Greenwald, Senior Director of Market Development at HGST, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, demonstrated how to move beyond today's coding paradigm and shared the must-have mindsets for removing complexity from the develo...
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
“We're a global managed hosting provider. Our core customer set is a U.S.-based customer that is looking to go global,” explained Adam Rogers, Managing Director at ANEXIA, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Basho Technologies has announced the latest release of Basho Riak TS, version 1.3. Riak TS is an enterprise-grade NoSQL database optimized for Internet of Things (IoT). The open source version enables developers to download the software for free and use it in production as well as make contributions to the code and develop applications around Riak TS. Enhancements to Riak TS make it quick, easy and cost-effective to spin up an instance to test new ideas and build IoT applications. In addition to...
Predictive analytics tools monitor, report, and troubleshoot in order to make proactive decisions about the health, performance, and utilization of storage. Most enterprises combine cloud and on-premise storage, resulting in blended environments of physical, virtual, cloud, and other platforms, which justifies more sophisticated storage analytics. In his session at 18th Cloud Expo, Peter McCallum, Vice President of Datacenter Solutions at FalconStor, discussed using predictive analytics to mon...
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 19th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo Silicon Valley Call for Papers is now open.
IoT is rapidly changing the way enterprises are using data to improve business decision-making. In order to derive business value, organizations must unlock insights from the data gathered and then act on these. In their session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, and Peter Shashkin, Head of Development Department at EastBanc Technologies, discussed how one organization leveraged IoT, cloud technology and data analysis to improve customer experiences and effi...
SYS-CON Events announced today that Isomorphic Software will exhibit at DevOps Summit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Isomorphic Software provides the SmartClient HTML5/AJAX platform, the most advanced technology for building rich, cutting-edge enterprise web applications for desktop and mobile. SmartClient combines the productivity and performance of traditional desktop software with the simp...
"We've discovered that after shows 80% if leads that people get, 80% of the conversations end up on the show floor, meaning people forget about it, people forget who they talk to, people forget that there are actual business opportunities to be had here so we try to help out and keep the conversations going," explained Jeff Mesnik, Founder and President of ContentMX, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.