China’s many cities have increased their investor proposition in recent years. While major metropolises like Shenzhen and Shanghai have established themselves as startup hubs, smaller cities are also emerging as significant players in this space. Tianjin, a major port city in northern China, exemplifies this trend. Today we look at how Tianjin, and other cities in China are attracting global financial institutions and fintech investment.
The Tianjin Economic-Technological Development Area (TEDA) stands as one of China’s earliest and most successful national-level development zones. Established in 1984, TEDA has evolved into a comprehensive ecosystem comprising 10 sub-zones, with approximately USD $33 billion in registered capital. The zone has attracted major international companies including Nestlé, Otis, and Novo Nordisk Pharmaceuticals.
TEDA’s Business District, one of its key sub-zones, has emerged as a pioneering industry-finance integration pilot zone. Currently, it hosts 158 licensed financial institutions and 1,500 fund management companies, demonstrating its success in attracting financial sector investment
To accelerate Tianjin’s financial development, various incentives have been introduced. These include settlement rewards ranging from 1 – 4% of paid-in capital for newly established or relocated legal personal financial institutions. Other incentives include USD$276.51 per square meter subsidies for eligible financial institutions. And annual rewards up to USD$138,244 for the top 5 underwriters or underwriter businesses, particularly those underwriting technology bonds and green bonds. Notably, Tianjin also offers support to reduce international transaction costs. Eligible enterprises in the Free Trade Zone can open Free Trade (FT) accounts integrating the Chinese currency RMB and foreign currency, enabling convenient currency exchange in a single account.
The city has made significant strides in technological innovation. Square Technology, one of China’s top blockchain enterprises, has established multiple facilities in TEDA, including an R&D centre and a digital service platform. Their collaboration with Tianjin University of Science & Technology demonstrates the city’s commitment to the fintech industry and digital transformation. Furthermore, OneConnect, listed as one of KPMG’s China Top 50 Fintech Companies for five consecutive years (2018-2023), launched China’s first cross-border blockchain trade project in Tianjin port. This step highlights Tianjin’s potential in bonds and the digital yuan development.
“OneConnect will combine its leading technical strengths with extensive practical experience for the Cross-border Trade Blockchain Pilot Project at Tianjin Port, which can help to systematically standardise blockchain-based cross-border trade, and complete legal compliance and technical standards.” Ye Wangchun, chairman and CEO of OneConnect shared.
Major banks, including Standard Chartered, Citibank, Deutsche Bank, HSBC and DBS, maintain a strong presence in Tianjin. These financial institutions are actively involved in the green finance and technology industries.
- Standard Chartered set up an aviation leasing company – Pembroke Aircraft Leasing (Tianjin) Limited in Tianjin.
- HSBC Tianjin issued the first green loan of HSBC China and proactively joined the Beijing Zhongguancun Guarantee System to support tech startup financing.
- Citibank Tianjin Branch completed Citi China’s first green working capital loan business in China.
- DBS Tianjin Branch issued a bank acceptance bill for State Grid International Financial Leasing Company to support energy security and clean energy transformation.
The Rise of the Tianjin-Hebei Model
Although Tianjin is one of the nine central cities in China, it is often referred to as “the coastal metropolis right next to Beijing”. Planned and promoted by Chinese President Xi Jinping, the coordinated development of Beijing-Tianjin-Hebei is a national strategy focusing on relocating nonessential roles from Beijin. Over 10,000 branches of Beijing enterprises have relocated to Tianjin and Hebei. This in turn has accelerated the formation of an “R&D in Beijing, manufacturing in Tianjin-Hebei” model. The deepened cooperation has led to mutual recognition of 165 qualification standards and 203 administrative services, offering startups and private companies’ greater access to Beijing’s decision-making power while benefiting from Tianjin’s affordability and incentives.
Tianjin’s educational infrastructure provides the city with a high-quality talent pool. Two prestigious universities, Nankai University (ranked 20 in Mainland China by QS 2025) and Tianjin University (ranked 13 in Mainland China by QS 2025), produce approximately 26,200 graduates annually. Jointly established by Nankai University and TEDA, TEDA College, TEDA Institute of Biological Sciences and Biotechnology and TEDA Institute of Applied Physics have been created. Moreover, the Beijing-Tianjin-Hebei region is collaborating to attract talent and share a talent pool. The Beijing-Tianjin-Hebei region’s collaborative approach to talent attraction and sharing makes Tianjin particularly attractive due to its affordability compared to Beijing.
Tianjin has also introduced favourable policies for investors from Taiwan, Hong Kong, and Macao. Taiwan-funded enterprises enjoy equal access to sectors including 5G research, finance, construction, and aviation. Taiwan residents receive support in entrepreneurship, housing, skill training, and banking. Additionally, Tianjin operates 24 acceptance centres for processing residence permits for Hong Kong, Macao, and Taiwan residents.
Beyond domestic initiatives, Tianjin has actively fostered international partnerships. A notable example is the collaboration between the China-Britain Business Council (CBBC) and the Tianjin People’s Government. Together, they launched the “Invest in Tianjin: Building Partnerships for Success” UK Promotion and Exchange Conference, aimed at strengthening ties between British enterprises and Tianjin. This initiative not only enhances bilateral business relationships but also serves to showcase Tianjin’s investment opportunities to a broader international audience.
Other Successful Models in China Today
Dongguan presents another example of successful foreign investment attraction in China. Unlike Tianjin’s focus on finance and technology, Dongguan leverages its advantageous location within the Guangdong-Hong Kong-Macao Greater Bay Area. This region has abundant labour resources. Dongguan has introduced various rewards to enterprises that have increased sales or reached certain sizes. Specifically, Dongguan offers a one-time subsidy of $138.04 (approx) per person to enterprises that employ non-local residents. Having gained substantial success in attracting foreign investments: housing 8,075 Hong Kong-funded enterprises and over 10,000 foreign-invested enterprises (2024) and utilised $1.23 billion overseas capital ((2021), Dongguan is now aiming to transform from a cheap export-oriented manufacturing to tech-driven manufacturing.
Hangzhou, the capital city of Zhejiang province and home to e-commerce giant Alibaba, is a prosperous first-tier city in China. Characterised by lower costs than its neighbour Shanghai and huge success in the digital economy, which reached $70.60 billion, Hangzhou’s overseas investment totalled $4.55 billion in 2022. Supported by Ant Group (formerly known as Ant Financial), the second-largest financial services corporation in the world, Hangzhou has leveraged its strategic planning and has gained recognition for its prowess in fintech. The city continues to innovate, as demonstrated by DeepSeek-V3, an open-source AI model developed by Hangzhou DeepSeek Artificial Intelligence Basic Technology Research Co., Ltd., which recently surpassed ChatGPT as the highest-rated free app on the US App Store.
Chinese cities are implementing diverse strategies to attract foreign investment, each leveraging its unique advantages and resources. Tier 1 cities like Beijing, Shanghai, Guangzhou and Shenzhen offer established international business environments and comprehensive infrastructure. Tier 2 cities like Tianjin present compelling value propositions through specialised development zones, industry-specific incentives, and strategic geographical advantages. It is worth noting that cities like Tianjin, Hangzhou, Wuhan etc. are also categorised as New Tier 1 cities to emphasise their potential.
The success of these cities in attracting foreign investment stems from several key factors:
- Targeted incentive programs that address specific industry needs
- Strategic positioning within larger economic regions or development plans
- Strong educational and research infrastructure supporting innovation
As China’s economy continues to evolve, cities are increasingly specialised in their development approaches. Tianjin’s focus on finance and technology, Dongguan’s manufacturing expertise, and Hangzhou’s digital economy leadership demonstrate how Chinese cities are creating distinct value propositions for foreign investors. Continued diversification, combined with infrastructure development and policy support means that China’s cities will remain attractive destinations for foreign investment. This offers companies various opportunities across different tiers and specialisations.
As Mark Tucker, chairman of HSBC Group indicated: “HSBC Group has firm confidence in investing in China, and will actively participate in China’s high-quality development and high-standard opening-up, support Hong Kong’s efforts in the building of an international financial center, and work for more results in mutually beneficial cooperation between the UK and China.”
Author: Evelyn Fang
See Also:
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