With the adjustment and optimization of the economic structure and the acceleration of scientific and technological innovation, the direction of corporate development is becoming increasingly specialized. Companies operating in isolation are finding it difficult to adapt to the complex division of labor and transactional activities in the market. Interdependence among enterprises is growing stronger; to optimize resource allocation, industrial clustering is intensifying, and as a result, investment promotion focused on industrial chains is gradually taking shape.

Currently, regions across the country are vigorously pursuing industrial chain investment promotion. However, industrial chains are relatively complex in their specific segments. Do all regions have the capacity to build high-end, complete industrial chains? Are there any misconceptions in the process of building these chains?

Does "complete" equate to "perfect"?

When reviewing industrial chain investment promotion policy documents from various regions, have you seen or heard of goals such as “accelerating the formation of a complete industrial chain” or “building a comprehensive industrial chain framework”?

Whether localities actually have the capacity to build complete industrial chains is a matter that warrants careful consideration.

Economically vibrant provinces like Zhejiang and Jiangsu, with abundant resources in capital, talent, land, and policy, possess the strength and capability to build one or more complete industrial chains.However, some economically weaker regions, in an effort to break out of their predicament, have raised slogans like “building industrial chains” and “creating new engines.” While they have indeed invested considerable effort in attracting projects, once factors affecting corporate development—such as post-establishment business services, resources, and the environment—are lacking, it is inevitable that companies will relocate elsewhere.

The layout of industrial chains involves not only supply-demand relationships among enterprises but also collaborative cooperation between regions. At this stage, economically weaker regions would do well to broaden their perspective and focus on the industrial support systems of nearby major cities. By seizing this opportunity to initiate inter-city collaboration, they can enhance local industrial clustering and, in turn, fill gaps and strengthen links to build more complete industrial chains.

Changshu serves as a successful case study of a city that sought change amid adversity and achieved industrial chain upgrading. Initially, constrained by its limited economic scale, Changshu struggled to attract foreign investment. To break this deadlock, the city broadened its perspective and focused its investment promotion efforts on automotive parts enterprises in the neighboring automotive hubs of Shanghai and Nanjing. Through persistent efforts, it finally succeeded in attracting its first Japanese-funded automotive parts enterprise.Subsequently, Changshu immediately adjusted its strategy, forming an investment promotion team—often led personally by senior officials—to target foreign-funded auto parts enterprises. Their relentless efforts paid off: today, Changshu not only boasts a cluster of auto parts manufacturers but also hosts complete vehicle manufacturers, making the automotive industry one of the city’s key pillar industries.

Does “High-End” Mean “Bespoke”?

Many regions have set their sights on building high-end industrial clusters in sectors such as advanced equipment manufacturing, biopharmaceuticals, smart vehicles, and semiconductors, yet they overlook their own innovation capabilities and talent pool.

High-tech industries are generally characterized by high initial investment, long development cycles, significant talent demands, and stringent requirements for technological innovation. When cities with weak economic foundations seek to build high-end industrial chains, they must carefully consider whether they have the capacity to provide enterprises with sufficient funding, time, and high-caliber talent to support their growth. Adopting a short-sighted, quick-fix mentality—blindly following trends and copying other regions’ goals and policies—often proves ineffective.

In the past, Keqiao in Shaoxing boasted the nation’s largest and most complete textile industry cluster. Although its development was later constrained by rising raw material prices, land shortages, and labor shortages, the Keqiao government did not abandon its strengths. Instead, by introducing new materials, smart manufacturing, and cultural and creative enterprises, it strengthened traditional textile firms’ advantages in materials, production efficiency, and design. This allowed them to build a higher-tier textile industrial chain and, by working together with enterprises, create new momentum for development.

Qidong City in Nantong, on the other hand, has leveraged its distinctive “hardware” industry, offering everything from small hardware repairs and sales to power tool manufacturing, and has become China’s “Number One City for Hardware.” Although its industrial chain is not as “high-end” as those in sectors like artificial intelligence or the Internet of Things, it fully embodies Qidong’s unique characteristics and has grown into an industry “champion.” In the future, Qidong can build upon its “hardware” industrial chain to gradually expand into the development of industrial clusters such as high-end equipment manufacturing.

Is the “Chain Leader System” a Panacea?

In recent years, the concept of the “chain leader system” has gained significant traction, with many regions beginning to implement it for investment promotion. While having leaders personally take charge can set an example, coordinate across regions, and elevate planning to a higher level—thereby improving government services for industrial chains and enhancing their integration with local economies—

However, over-reliance on the “chain leader system” may also lead to problems. For instance, subordinates might simply follow orders without adapting to changing circumstances, or what if the “chain leader’s” decisions are not entirely applicable?

For enterprises, local supply chains are crucial, but supply chain links are not necessarily all based locally. An industry may have numerous upstream, downstream, and lateral links, and distance is not the sole criterion for enterprises when selecting suppliers. The trial-and-error process for selecting suppliers can take two to three years. Therefore, simply clustering the entire industrial chain in one location does not guarantee that enterprises can rest easy.

If there is excessive reliance on the “chain leader system,” the government may overstep its bounds due to certain performance metrics, making decisions directly on behalf of enterprises. This could potentially hinder business development and produce counterproductive results.

Shenzhen’s innovative “chain-based service” model offers a new approach to the “chain leader system.” Shenzhen has established both the “chain leader system” and “chain anchor” enterprises. “Chain leaders” are responsible for leading, coordinating, and formulating plans, while “chain anchor” enterprises occupy a central position in the market, coordinating activities across various nodes in the industrial chain. At the same time, the city encourages “chain anchor” enterprises to collaborate with small and medium-sized enterprises (SMEs) to establish a collaborative innovation mechanism based on risk-sharing and profit-sharing.

Recently, Henan has also launched a “dual-leader system,” in which the industrial chain cluster leader system and the alliance leader system operate in parallel, similar to the relationship between “chain leaders” and “chain anchor” enterprises. This approach can also creatively mitigate some of the risks associated with the “chain leader system.”

Conclusion

Attracting investment for industrial chains is an inevitable trend, but when localities build these chains, they must avoid making them “too long, too grand, or too institutionalized.” Instead, they should adapt to local conditions, “nurture new growth from established roots,” revitalize traditional enterprises, and promote collaborative development among businesses—this is the true goal of industrial chain investment promotion."The road ahead is long and the task is heavy." As for the specific implementation of industrial chain investment promotion, it remains essential for governments and enterprises to strengthen communication, conduct joint research, carefully deliberate, and work hand in hand to build these chains.