In recent years, news of companies shutting down or ceasing operations due to pollution, low-end production, or regulatory crackdowns has become all too common. The current “dual-control campaign” has caught businesses off guard and could determine the very survival of a company or even an entire industry. Whether it’s one-size-fits-all environmental regulations or the challenge of meeting energy consumption standards—not to mention concerns over inadequate technology and insufficient funding—these issues have become a “sword of Damocles” hanging over enterprises. When enterprises face closure, production halts, or forced withdrawal, local governments should adapt to the situation and tailor their approaches by launching investment promotion “rescue plans.” They should provide one-on-one support for corporate transformation and upgrading, introduce advanced technologies, and help enterprises grow stronger and larger.
“Just a few days ago, we received a notice that we must immediately halt operations and relocate, or else they’ll take drastic measures. Things were already tough, but with the environmental regulations piling on, it’s become even harder,” a business leader commented last year. There are also some enterprises whose pollution levels are not particularly high—they’ve installed every possible environmental protection device—yet as soon as an inspection order comes down, they face abrupt power cuts and production halts. It’s truly a case of “sitting in the factory, yet disaster strikes from the sky.”Economic development certainly cannot come at the expense of the environment, but nor should emission reduction and pollution control drive enterprises out of business. Some localities should grant polluting and energy-intensive enterprises time to rectify their operations and propose targeted remediation plans, rather than mechanically applying environmental policies or pursuing speed and results in a simplistic and heavy-handed manner. Therefore, local governments should invest in “three wastes” (wastewater, waste gas, and solid waste) emission monitoring systems at key enterprises to track pollution data and manage pollutants, while establishing a “centralized treatment system” to strictly control centralized discharge points.A longer-term strategy involves leveraging new technologies to drive the transformation and upgrading of traditional industries. For example, the cement industry has leveraged digital and intelligent upgrades by continuously adopting new technologies such as artificial intelligence and the Industrial Internet of Things. Through the development of automated production lines and waste heat power generation technologies, it has reduced electricity consumption and continuously lowered energy consumption indicators, ultimately removing itself from the list of high-pollution, high-energy-consumption industries.
Today, from the provincial to the municipal and county levels, economic reports touting slogans like “Targeting the Fortune 500, Attracting High-Tech, High-End, and Cutting-Edge Enterprises” are ubiquitous, as if these projects have become the key metric for evaluating the success of local investment promotion efforts. Beyond valuing the large scale and substantial investment of such projects—which generate fiscal revenue—they are also prized for their advanced technology, top-tier equipment, and established market channels. From this perspective, they serve to attract both capital and talent. Following this logic, local governments have neglected enterprises with weak technological capabilities and low economic returns; over time, these enterprises have been phased out.Investment promotion must adopt a "high standards, hands-on" approach: setting thresholds for investment intensity and total investment, and establishing exit mechanisms to hold projects accountable if they fail to commence construction by the deadline—this represents "high standards." "Hands-on" refers to implementing a work system of weekly reports and daily follow-ups to understand enterprises’ technological innovation progress and talent needs, and to provide timely assistance and support. It is worth noting that with rapid technological advancements, the continuous optimization of industry structures, and increasingly frequent corporate turnover, even today’s leading enterprises may face the risk of being phased out in the future. Therefore, for enterprises with weaker technical capabilities that do not align with the dominant industries, local governments can utilize the “flying land” model to achieve complementary and mutually beneficial resource sharing across regions, fostering a favorable landscape where “large enterprises stand tall and small and medium-sized enterprises spread far and wide.”
As investment promotion efforts continue to intensify, certain pillar industry projects and strategic emerging industry projects are gradually exhibiting characteristics of cluster-based development. To further catalyze industrial agglomeration, local governments are using funds as a “catalyst” to attract more investment institutions to establish sub-funds, ultimately pooling capital to invest in enterprises with growth potential. However, this is no easy task.On one hand, there are difficulties in securing social capital and lengthy decision-making cycles; on the other, industrial funds face operational bottlenecks and insufficient supporting services. Consequently, some funds remain idle, leaving enterprises struggling with difficult and expensive financing. It is reported that in a certain city, out of more than 20 guiding funds, only 10% are truly active due to insufficient capital allocation, with the majority existing in name only, severely impacting fundraising efforts. So how can industrial funds be leveraged to play a role in attracting investment and resolving corporate funding shortages? Driven by fundraising challenges, the target audience for guiding funds has expanded from traditional institutions such as banks and investment funds to include high-net-worth individuals and market-oriented fund-of-funds, diversifying and integrating social capital. Of course, industrial funds can also provide enterprises with comprehensive supporting services, including strategic planning, corporate governance, industry resource integration, and capital market planning.The Beijing Daxing Internet Guidance Fund, for instance, has allocated resources for top-tier services including office space, administrative approvals, policy subsidies, resource matching, and talent recruitment. It has also established a specialized industrial service team to provide enterprises with full-lifecycle support.
Local economic development relies on the three pillars of exports, consumption, and investment. In pursuit of rapid GDP growth, some regions have adopted an approach of “attracting, attracting, and attracting again.” However, this process has failed to absorb core technologies, resulting in weak independent innovation capabilities among enterprises. This has led to a tendency to prioritize production over R&D, introduction over assimilation, and imitation over innovation.Over time, the value added by these enterprises gradually declines, and they are ultimately replaced by high-tech, high-value-added projects through a process of “retreating from secondary industries to tertiary industries” and “moving from low-end to high-end sectors.” Local governments should shift from a focus on mere introduction to a strategy that combines introduction with assimilation and absorption. Guided by the innovative thinking of entrepreneurs, they should build a technology innovation system that integrates industry, academia, and research, guiding enterprises to continuously enhance their capabilities in original innovation, integrated innovation, and the ability to introduce, assimilate, absorb, and re-innovate.At the same time, efforts should be made to stimulate the commercialization of patents from universities and research institutes, vigorously expand patent access channels, and lower the barriers for small and medium-sized enterprises (SMEs) to acquire patented technologies through measures such as “use first, pay licensing fees later.” In particular, the late stages of a company’s R&D process represent the optimal window for investment promotion. Since this is precisely when enterprises are seeking markets and application scenarios, local governments should assist them in building platforms, identifying opportunities, and enhancing the market value of their products.
Conclusion
Whether driven by environmental pressures or energy consumption controls, issuing “red cards” to high-energy-consumption, high-pollution, and low-output enterprises is entirely appropriate. However, approaches such as “blanket shutdowns” or “shut down first, ask questions later” fail to address the root causes and make it difficult for enterprises to recover. Therefore, regions must tailor their strategies to local conditions, replacing short-term coercive measures with long-term, effective governance approaches.
In the process of attracting investment, we must leverage existing resources, establish platforms, and invest capital to guide enterprises in continuously assimilating advanced technologies, enabling them to utilize core technologies for their own benefit and ultimately drive long-term development of the local economy.
