This aluminum alloy mountain bike from Tianjin Kelin is fitted with Shimano brakes, rims and suspension systems.

More companies are setting up shop in this northern China hub, drawn by its location, infrastructure and resources.

Tianjin is the main source of mountain bikes in northern China. An estimated 500 suppliers are clustered in this municipality, producing roughly 30 percent of the country's output. The hub continues to lure investors with its strategic location, solid infrastructure, mature supply chain, and low land and labor costs.

This business climate enables Tianjin companies to carry out production economically and in turn price models lower than those at other domestic hubs. They also gain more room to invest in design upgrades.

Tianjin lies at the center of the Bohai Sea Rim Economic Circle, only 120 kilometers away from Beijing, the capital of China.

Bicycle materials and components can be sourced easily via its extensive supplier network. The well-developed land and air transport system facilitates procurement outside the municipality.

Moreover, companies are able to reduce freight costs since they are situated near the Tianjin Port, which has more than 300 international connections.

Tianjin also gives makers an edge in terms of R&D. For one, the presence of foreign investors spurs design innovation within the industry. In addition, the Tianjin Bicycle Industry Association offers assistance and training.

With these advantages, suppliers are finding it easier to develop models featuring streamlined frames, transmission shafts and single gear ratios.

Tianjin has strong supply and transport networks in Beichen, Wuqing and Wang Qingtuo. Companies in these districts churn out 80 percent of the hub's output. Most are privately owned enterprises with small or midsize operations.

Benefiting from rich metal and nonmetal mineral resources, a large number of material suppliers have congregated in Tianjin.

More than 20 minerals can be found in the hub. These include iron for steel production, and copper and zinc, which can be combined with aluminum to form different alloys.

Among the mountain bike companies, steel and aluminum alloy are the top material choices.

Tianjin Kaite Bicycle Co. uses steel in its latest 24 and 26-inch models.

Tianjin Kelin Bicycle Co. Ltd's releases are fitted with aluminum alloy frames and front forks.

There are also some component suppliers operating in the municipality, including internationally known brands. One of these is Shimano, a Japan-based maker of bicycle parts such as derailleurs, rims, brakes and suspension systems.

Another benefit companies enjoy is Tianjin's efficient transport links. The hub serves as the junction of railways in northern China. It also has an expansive road system, including nine expressways.

The Tianjin Binhai International Airport, one of the largest air freight centers in China, helps expedite deliveries to and from abroad.

Tianjin's exports are on a steady rise. In 2006, the municipality shipped $222 million worth of mountain bikes, accounting for 27 percent of China's total revenue. Sales for 2007 are estimated to show a 20 percent increase, with shipments from January to August already reaching $198 million.

To sustain growth amid industry challenges, Tianjin suppliers are adjusting their export strategies. Most makers are boosting shipments to the US, South Korea and Japan.

During the first months of 2007 alone, exports bound for the US and South Korea generated $61 and $53 million, respectively.

This comes as the European Commission's antidumping duty on China-made bicycles is still in place, pushing companies to target other regions. Europe traditionally absorbed the majority of midrange and high-end models from Tianjin.

Suppliers are also gearing up OBM exports to achieve greater returns. The recent tax rebate reduction, coupled with the yuan's appreciation, has been straining their profit margins. The current refund rate for bicycles is down to 9 percent.

At Tianjin Flying Pigeon Bicycle Co. Ltd, half of shipments bear the in-house brand.

Products under the Sykee brand account for 30 percent of Tianjin Kelin's exports.

Tianjin Kaite also courses about one-third of shipments on an OBM basis.