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Tianjin Lures Lots Of Investors...But It's Losing Some Allure

In 1856, when Chinese soldiers boarded a British ship looking for pirates, the Europeans saw their chance. The British and French laid siege to the northern port city of Tianjin in retaliation and soon forced the city to open to trade. By 1900, the Japanese, Germans, and Italians had arrived, each doing business in their own city concession.

After the 1949 revolution, the foreigners were sent packing, and the communists got busy developing Tianjin into one of China's largest industrial bases. Today, Tianjin is undergoing yet another big change. China's push to reform its economy has led to massive layoffs in Tianjin but also has brought in more than $20 billion in foreign capital. Investors are drawn by the city's location, a fast-growing economic-development zone, and by the most basic lure of all: "Labor and land are still inexpensive here," explains Taytian Yu, who runs a factory for U.S. glass and coatings maker PPG Industries.