Relocating from urban areas to industrial parks is a key measure for optimizing urban spatial layout and promoting industrial upgrading and cluster development.

Recently, the General Office of the State Council issued the "Opinions on Further Revitalizing Existing Assets and Expanding Effective Investment," encouraging industrial enterprises to relocate from urban areas to industrial parks.

▲ Original text: Coordinate the revitalization of existing assets with projects involving renovation and expansion, including the transformation of comprehensive transportation hubs and the relocation of industrial enterprises from urban areas to industrial parks.

Guided by this top-level policy document, the relocation of industrial enterprises from urban areas to industrial parks is now entering the “fast lane.”

However, some major manufacturing cities, such as Guangzhou, Nanjing, and Hangzhou, have unanimously sounded the call for “industry returning to the city,” explicitly aiming to accelerate the development of urban industries.

Relocation from City Centers to Industrial Parks vs. Industrial Return to City Centers: Which Is the Bigger Trend?

Relocation from City Centers to Industrial Parks: From Concentration to Dispersion

According to classic regional economic development theory, urban development is often accompanied by the relocation of primary and secondary industries.

In recent years, many regions have implemented the “retreat from secondary to tertiary industries” policy—centered on “manufacturing moving out and services moving in”—creating favorable conditions for revitalizing urban land resources and improving the living environment.

Initially, the "relocation from cities to industrial parks" initiative primarily targeted the centralized relocation and transformation of high-energy-consumption and high-pollution enterprises.

However, in today’s economic landscape, the relocation of industrial enterprises from urban areas to industrial parks has taken on broader practical significance.

First and foremost is the efficient and intensive use of land.

Most industrial enterprises have large-scale production equipment, and some industries require piping for environmental reasons, so they generally prefer ground-floor space.

However, in central urban areas where land is at a premium, constructing large numbers of low-rise factory buildings is impractical, making relocation inevitable.

Furthermore, given the large amount of land in cities that has been approved but not yet acquired, acquired but not yet supplied, or is idle and underutilized, promoting the relocation of industrial enterprises from urban areas to industrial parks helps revitalize existing assets in a manner suited to local conditions.

On the one hand, this strengthens the efficient and intensive use of land; on the other, it alleviates the constraints on industrial development caused by tight land quotas.

More importantly, the relocation of industrial enterprises from urban areas to industrial parks can effectively promote the cluster-based development of leading industries.

As an effective means of enhancing urban competitiveness, fostering industrial clusters requires both vertical deepening—to integrate upstream and downstream segments of the industrial chain—and horizontal expansion—to create a mutually beneficial industrial ecosystem.

The foundation for all of this lies in fostering industrial agglomeration to the greatest extent possible.

Relocating scattered industrial enterprises from urban areas to industrial parks is the most direct way to achieve industrial agglomeration.

Take Jining City in Shandong Province as an example.

As early as 2009, Jining introduced measures for the “relocation of urban industrial enterprises to industrial parks” to accelerate the pace of industrial enterprises moving into these parks.

Currently, the last hazardous chemical enterprise in Jining’s urban area—the Sinopec Jining Oil Depot, established in 1978—is also in the process of relocating.

In the first half of 2022, Jining’s GDP reached 258.037 billion yuan, a year-on-year increase of 4.1%, ranking among the top in the province.

Despite these impressive results, the process has not been entirely smooth.

First, the relocation of industrial enterprises from urban areas results in significant impairment losses on fixed assets, and the subsequent reconstruction within industrial parks entails substantial costs; second, the relocation involves the resettlement of a large number of employees, making coordination extremely challenging.

To address the challenges of corporate relocation, the governments (and management committees) of Jining’s counties, cities, districts, and development zones have actively followed up by introducing fiscal support policies for the “relocation from urban areas to industrial parks” initiative to guide enterprises into these parks.

For example, Lu Kang Pharmaceutical received 5.8111 million yuan in interest subsidies for the “relocation from urban areas to industrial parks” project from the Centralized Payment Center of the Zoucheng City Finance Bureau in Jining last November.

Now, with the issuance of the “Opinions,” the government is expected to provide enterprises with greater support in areas such as fixed asset valuation, special fund subsidies, and loan guarantees, which will further strengthen enterprises’ willingness to relocate to industrial parks.

It is worth noting that the “relocation from urban areas to industrial parks” initiative is not merely a spatial shift but also involves the phasing out and upgrading of outdated production capacity.

Taking the “Relocation from Urban Areas to Industrial Parks” initiative as an opportunity, Lukang Pharmaceutical has comprehensively implemented a transformation and upgrade toward smart manufacturing. The company has invested a total of 300 million yuan to enhance production processes and the automation and intelligence levels of equipment in its workshops, achieving interconnectivity among more than 3,000 pieces of equipment and raising the CNC utilization rate of key equipment to 80%.

Through “relocating from urban areas to industrial parks” and “strengthening industrial chains,” Jining is making steady progress on its path from a “resource-based city” to a “manufacturing powerhouse.”

Industry Returns to the City: A "Revitalization" in Progress

While the “relocation from urban areas to industrial parks” initiative is in full swing, some manufacturing powerhouses have begun championing the slogan of “industry returning to the city.”

In Guangzhou, central urban districts such as Haizhu, Liwan, and Tianhe have extended olive branches to urban industries, guiding them back into the city.

On February 18, construction began on the Pearl River Science and Technology Innovation Park in Haizhu District.

With a total floor area of 500,000 square meters, this park will become the largest urban industrial park in Guangzhou’s central urban districts.

To advance the development of urban industry, Haizhu District has already laid out its plans:

During the 14th Five-Year Plan period, the district will implement the “Ten-Hundred-Thousand-Billion” urban industrial project—adding 10 new urban industrial parks, releasing over 1 million square meters of high-quality facilities, and expanding the urban industrial sector’s scale to exceed 100 billion yuan.

As one of the central urban districts, Liwan District has successively bid farewell to long-established industrial enterprises such as Guangzhou Shipyard and Guangzhou Steel during the transition from “secondary to tertiary industries.”

Today, as it reconnects with industry in a new historical context, Liwan District is once again focusing on using industry to drive urban development, proposing to retain industrial resources such as headquarters economy, healthcare, and information technology within the urban area.

Tianhe District, where the tertiary sector dominates, has also set its sights on industry.

In its 14th Five-Year Plan, Tianhe District has, for the first time, designated modern urban industry as a leading sector, with a target of increasing the secondary sector’s share of GDP to 9% by 2025.

Can industry truly thrive in the city center, where every inch of land is precious?

Zhou Qiren, a professor of economics at Peking University, points out:

The logic underlying human economic activity involves aggregation through mobility, followed by further mobility and aggregation, until populations, economies, and wealth become geographically concentrated in increasingly small areas.

In fact, world-class metropolises do indeed evolve and upgrade along the trajectory of “concentration—diffusion—reconcentration.”

Take Tokyo as an example:

During its urban development, Tokyo did not push all manufacturing industries to relocate outside the city. Instead, it utilized the "Guidelines for the Promotion of Industrial Science and Technology" to guide industries with high demand for talent, capital, and information—but low dependence on the environment and land—to remain in the central urban area.

Innovative and headquarters-based urban industries—such as gaming and animation, apparel, and consumer electronics—have flourished, becoming pillars of the economy and major sources of employment. The return of industry to the city center has prevented the hollowing out of the central business district.

On the other hand, the resilience of the industrial sector during the onset of the pandemic, as well as its ability to recover and rebound rapidly once the pandemic eased, far exceeded that of the service-dominated tertiary sector.

From a broader perspective—

From cities to metropolitan areas and even urban clusters, the scope is expanding, but the fundamental principle remains the same: the core must possess sufficient density and capacity to function as a driving force.

The strength of the central urban area is of paramount importance.

The old urban districts that once witnessed the glory of industry are now poised to undergo a new round of industrial transformation: the industries that once departed from the city center will return in new forms, new formats, and new models.

There is no question of which is superior or inferior

Today, urban development is increasingly taking on a differentiated trajectory.

Every city has its own development needs and strategic choices. Only by taking a holistic view to define the city’s positioning, accurately diagnose challenges, leverage its unique strengths, and pool superior resources can it achieve breakthroughs.

Therefore, the relocation of industries from urban centers to industrial parks is not contradictory to the return of industry to the city.

They are simply strategic choices cities make at specific stages of industrialization, with neither inherently superior or inferior.

There are two key differences between the two:

First, the method of clustering.

Both "relocating industries from the city to industrial parks" and "bringing industry back into the city" rely on industrial parks as the primary venues for hosting industries.

The difference lies in the fact that in downtown areas where land is at a premium, there is a greater emphasis on land conservation and intensive use.

For example, the “industrial verticalization” model pioneered by Shenzhen, Guangzhou, and Foshan has significantly improved the efficiency of industrial space utilization.

Second, the industrial focus.

Relocating industries from urban centers to industrial parks provides traditional industries with an opportunity for transformation and upgrading; strict entry requirements can force energy-intensive, high-pollution, and overcapacity industrial enterprises to innovate.

In contrast, the return of industry to the city center is a true free-market competition.

While central urban areas have a higher concentration of production factors such as capital, talent, and information, they also demand higher returns per unit of land.

What kinds of industrial enterprises can return to the city?

In Guangzhou, the majority of returning enterprises are light manufacturing firms such as R&D headquarters, pharmaceutical and healthcare companies, and information technology firms.

These enterprises have lower dependence on the environment and land but offer higher value-added, making them ideal industries for promoting the return of industry to central urban areas.

However, since each region’s comparative advantages, development conditions, and innovation capabilities vary, successful models cannot be directly replicated.

This requires scientific analysis and rational planning.

It is not only necessary to understand one’s own industrial foundation but also to clarify one’s competitiveness within the entire metropolitan area and determine which tier one belongs to.

First, paint a clear self-portrait.

Only by creating precise profiles of industries and enterprises can we truly guide industrial development with a scientific mindset and avoid falling into the trap of blindly following trends.