Tianjin promotes the transformation and upgrading of the old industrial base

Starting in 2013, enterprises in Tianjin began to experience their transformation and upgrading. The emphasis was on SMEs that were considered loosely managed, low quality and polluting. After just a few years, a total of more than 12,000 enterprises successfully transformed themselves and the per 10,000 CNY output energy consumption fell by 15.38% for the last two years. A large number of SMEs were reborn and have become pillars of Tianjin’s high quality economy development.

Over the years, Tianjin, as an “old industrial city”, left a large number of polluting, inefficient and difficult-to-transform traditional industries. Economic “upgrade” met great obstacles. Facing increasingly fierce market competition and new ecological environment pressure, “transformation” was the inevitable choice. In 2014, Tianjin Municipal Government formulated “Action plan for upgrading 10,000 enterprises (2014-2016)”. The “plan” clearly stated the overall goal, implementation and related policy changes of upgrading 10,000 enterprises from 2014 to 2016. 12,000 SMEs were identified as the first batch of action. The plan is as follows. Through three years of efforts, overall efficiency of these companies will increase by more than 50%; the number of large scale industrial enterprises will reach 6,000; per hectare tax revenue increase by 50% in industrial parks; commercial buildings tax will increase by 50% per square meter; unit energy consumption will drop by 15%. As a result, emission will decrease significantly, structures will be optimized, efficiency will be improved, employment will be increased, and resource conservation and the environment will be improved.

The most difficult part for SMEs to upgrade is to choose their own path. Considering all factors affecting the future of SMEs such as stage of development and the problems and opportunities faced, Tianjin explicitly pointed out six paths for transformation and upgrading. Some of the enterprises to be transformed and upgraded, some of them to be specialized, some of them to be merged or acquired, some of them to change what they produce, some of them to be shut down, and some of them to be upgrading their carriers. Policy wise, Tianjin prioritized such sub-paths as technology, management, specialization, restructuring, privatization and e-commerce. Each path is clear with details and enterprises are free to choose from any of them. Meanwhile, according to the different characteristics of each sub-path, Tianjin studied and formulated the standard of transformation and upgrading. Now business transformation had a direction and a standard.

13 government departments formed “Office of 10,000 enterprises” and 600 service groups. “Combination punches” were rolled out for those difficulties encountered in transformation and upgrading. Tianjin introduced “transformation and upgrading, industrial restructuring, shutting down, reorganization, carrier upgrade” and “fill the related parties, make up transformation and upgrade talent training” and other policies. It also launched policies that support technological innovation, new product development, finance innovative services, encourage the development of e-commerce, support development of industrial clustering and other “ten points on transition” supporting policies and measures to implement precision “drip”.

For SMEs, the biggest problem is “financing difficulties and expensive financing”. Tianjin came up with 6 billion CNY to establish a “medium, small and micro enterprise loan risk compensation mechanism”, which compensates for 50% of the losses should the enterprises fail. District and townships would compensate another 20%-30%. Financial and tax policies of Tianjin’s “10,000 enterprises in reforming” were widely welcomed by businesses, and became “hard leverage” on the reform.

“10,000 enterprises reforming” action plan now bears rich fruits. For the past two years, the city’s more than 12,000 companies have completed the transformation and upgrading on 14,465 projects. A total of 709 million CNY of funds has been realized. 16 districts and townships have invested 2.036 billion CNY on support funds. 4,900 technology projects were completed. 337 “special, exquisite, boutique and new” products were manufactured. 990 sunset enterprises were shut down. The development potential and the quality of economic development of enterprises were significantly enhanced.

“10,000 enterprises reforming” paved a new road of innovation and development for the majority of SMEs and built an upgraded version of Tianjin SMEs. Tens of thousands of small and medium enterprises became “reform early, benefit early” model companies. It will bring a fundamental change to the Tianjin industrial structure and development pattern.