Tianjin East Port, the new part of Tianjin Port nearing the end of its first phase of construction, is receiving unprecedented attention from both local and foreign investors.

 

Nine agreements of intention were signed yesterday with 12 companies including HSBC, China Merchants Bank and Mapletree Logistics, the first batch of investors since the Tianjin East Port project began in June 2002.

 

"Investors from home and abroad are showing great interest in the East Port thanks to its high potential for economic growth," said Hao Yunhui, deputy director of the Department of Investment with Tianjin Port (Group) Co Ltd.

 

The investment agreements come as the first 4 square kilometers of the port are about to come into use. Hao said a further 16 agreements of intention were expected to be signed in the near future.

 

The Tianjin East Free Port, with an expected area of 10 square kilometers and the largest free port in China, is the major drawcard for investors.

 

The State Council approved the free port in the Tianjin East Port on August 31 last year. It is the second free port to be established after the 8-square-kilometer Shanghai Yangshan Free Port.

 

But the Tianjin East Free Port will enjoy more preferential policies on financing and tax than the Yangshan Free Port. And although both free ports cover the same business including international trans-shipment, distribution, purchase, transit trade and export processing the Tianjin free port will be more open.

 

This has sparked a rush of interest from international investors, who have been in talks with the Tianjin East Port Construction Development Co Ltd, responsible for planning and developing the Tianjin East Port.

 

"There is huge potential, and the business environment here is maturing," said Yu Liming, director of business development at China Merchants Holdings (Hong Kong) Co Ltd. The company has made an initial investment of 1 billion yuan to support logistics and processing in the first phase of the Tianjin East Port, and "it will add more investment".

 

HSBC is also considering joining the port, but no figure has yet been set, said Russell W Shields, an executive from the bank.

 

The free port is expected to expand in the future and the Chinese government is also likely to approve more free ports around the nation on the basis of how well the Tianjin East Free Port operates.

 

(China Daily February 9, 2007)