“In the past, it was the prefecture-level cities in our province that were selling [these assets], but now the counties and districts have started doing so as well,” said a local government official.

What are they selling? Parking lots? Local governments are holding massive auctions for parking lots, with operating rights becoming a hot-selling “product.”

Why are they doing this? To monetize public resources in advance, with transaction amounts often reaching hundreds of millions.

Ultimately, it boils down to fiscal difficulties. For a long time, attracting investment has been a key strategy for “replenishing” government coffers.

However, achieving quick returns is difficult… yet “low-hanging fruit” style investment promotion often fails to embrace the philosophy of a “long-distance race.”

It can be said that we often overestimate the results achieved in the short term, while underestimating the heights we can reach through long-term persistence.

From another perspective, should we choose “short-term gains” or adhere to “long-termism”?

Auctioning Parking Spaces: A Clear-Eyed Calculation

Not long ago, I came across a report:

From January to May of this year, nearly 40 local governments auctioned off parking space operating rights.

The key point is that most of the locations where auctions took place are in central and western China.

Put simply, transferring the operating rights of assets is a way to “revitalize existing assets.”

Essentially, the buyers are local state-owned enterprises or urban investment platforms, which pay the projected revenue for the next few decades in a single lump sum.

Let’s do a rough calculation: assuming the bid is awarded at the reserve price, and setting aside other costs, let’s just look at the cost of the concession rights.

If each parking space is occupied for 5 hours a day and charges 24 yuan in parking fees, annual revenue would be 8,760 yuan.

In a certain area with 5,342 parking spaces, annual parking revenue would be: 8,760 × 5,342 = 46.79 million yuan.

Thus, over a 30-year operating period, the total parking revenue from these spaces would reach 1.403 billion yuan.

The cost of the concession rights for these 5,342 parking spaces is only 401 million yuan. If we factor in equipment maintenance and upgrades, staff wages, various taxes and fees, and other expenses, the operation is theoretically profitable.

This also confirms that the lump-sum payment received for transferring the operating rights over a 25- or 30-year period is substantial.

Investment Promotion: A Long-Term Calculation

What is puzzling is why the majority of bidders are urban investment platforms.

First, market-oriented private enterprises view the costs of managing parking spaces as high and the returns as low, resulting in low enthusiasm for competing for these projects.

Second, urban investment platforms that secure the toll collection rights then pledge these future rights—or the associated revenue streams—to banks to secure further financing.

Viewed this way, public bidding serves merely as a market-based method for asset valuation and pricing, enabling the mobilization of larger capital pools in the short term to secure additional financing and alleviate fiscal pressures.

Parking space assets offer a relatively high return on investment, particularly during the later stages of valuation, where individual valuations can be inflated, meaning local governments can secure higher returns.

For the government, this represents only a short-term return. However, local development requires a long-term perspective, and attracting investment is the “driving force” behind economic growth.

Economic development and investment promotion are the "1"; everything else is the "0." If the "1" disappears, the "0" has no foundation to stand on.

Therefore, a long-term perspective is the true “turning point” for economic development.

Investment is one of the driving forces of the economy. In the past, the focus of investment was on infrastructure; however, with mounting local government debt pressures, industrial investment has become a priority, and regions across the country are intensifying their efforts to attract investment.

This explains why local governments are so keen on investing in semiconductors and new energy vehicles—everyone wants to cultivate high-quality enterprises.

Take the semiconductor industry as an example: how much is a certain local government willing to spend?

A chip manufacturing company plans to build a memory chip packaging and testing plant with a total investment of 1 billion yuan.

Considering the combination of local partnership funds and production line construction, the local government contributed approximately 60% of the total investment for this 1 billion yuan project.

Clearly, this investment ratio is significant—far exceeding the local government’s typical contribution of around 30% to guidance funds.

Of course, when viewed in the context of attracting investment, this ratio makes sense. After all, this funding is not simply given to the company for free; it is a “market-oriented investment” that secures equity stakes. All fixed-asset investments will remain in the local area—even if the monks leave, the temple will remain.

However, every industry has its cycles, and the high growth rates seen in some emerging sectors are often short-lived phenomena.

If projects are launched blindly without thorough industrial analysis and research, it could lead to a vicious cycle of excessive debt, difficulties in attracting investment, and struggles in park operations. At the same time, various enterprises may flock to the area lured by “generous incentives,” and rapid expansion could sow even deeper seeds of risk.

Picking the Low-Hanging Fruit: The Competition

Developed regions along the eastern coast are now coming to our area to attract investment—a stark reversal from the past when we used to go to them. This is the reality as described by investment promotion officials in central and western China.

Indeed, this year even Shanghai, breaking with tradition, made an unprecedented “reverse” move by holding an investment promotion event in Chengdu.

The visit lists of coastal regions typically include manufacturing and high-tech enterprises, whereas key cities in the central and western regions have a higher concentration of research institutions and universities; the enterprises incubated by these institutions have become the primary focus of visits.

This indicates that the economy and industries in the Chengdu-Chongqing region have taken off, and it also demonstrates that competition for investment has become even more intense.

As things stand, the number of companies in the market is finite, and the potential for growth is limited; consequently, the “fruits” ultimately distributed to local regions are few and far between.

Some say that in the past, investment promotion was simply about offering tax incentives and exemptions, but now it has turned into spending money to acquire companies—without spending a single penny, factories are built, and working capital still requires fiscal investment.

Of the enterprises acquired at such cost, nine out of ten fail to contribute any tax revenue, and may even end up leaving.

In many regions, it is not just the Investment Promotion Bureau that handles investment attraction; all government departments have investment promotion quotas, and in some areas, even Party-affiliated departments are tasked with attracting investment.

Then, through urban investment platforms, they may strike deals with these companies—meeting the companies’ financing needs while fulfilling the local government’s investment targets.

Can local economic development thrive by attracting such enterprises?

Consequently, some local leaders have explicitly stated: “When it comes to investment promotion, I don’t care how many agreements you’ve signed; I only care whether the project has broken ground, whether funds have been disbursed, and whether there is actual work being done on-site.”

This “reaching for the stars” approach to investment promotion not only gives investment officers a clear sense of purpose but also aligns with reality and the natural laws of local development.

It is not fair to judge success solely by a single metric—how many projects were attracted or what the annual growth rate was.

In some regions, large-scale projects consistently attract substantial capital inflows year after year, earning them top rankings annually—yet this does not necessarily indicate effective investment promotion. Since the capital for such projects is assured, these regions could be assigned additional metrics to focus on.

In contrast, for regions in central and western China where some localities lack large-scale projects or industrial platforms, fewer metrics should be assigned. Evaluations should not be based solely on project size; instead, the focus should be on promoting the concentration of local resources and factors toward advantageous regions and industries.

Conversely, a piecemeal approach to investment promotion—scattering efforts here and there—easily leads to the fragmentation of industrial space. It also leaves investment promotion efforts lacking direction, preventing the formation of distinctive core industries and competitiveness.

Currently, local industries are transitioning from an era of incremental growth to one of optimizing existing resources. Some effort and time should be directed toward tapping into the growth potential of local industries and building an industrial ecosystem suited to the region, thereby gradually alleviating investment attraction pressures through industrial incubation.

Whether for urban or industrial park development, success depends on one or more well-developed industrial chains, rather than relying solely on one or two leading enterprises.

In the investment promotion process, the key lies in establishing a clear industrial positioning, attracting investment along industrial chains, and incubating businesses based on demand. Creating an industrial ecosystem with well-developed upstream and downstream sectors and a vibrant industrial atmosphere is the best competitive advantage for attracting investment.