There’s a saying in sales: “It’s better to sell service than to sell products.”

When it comes to attracting investment to a region, nothing matters more than “selling the region.”

What does this mean?

To successfully attract investment, local governments must consider the value they can bring to a company’s development from a regional perspective.

Simply put, providing excellent service to projects is the best way to attract investment—ensuring high-quality enterprises have access to the best resources.

Stepping back from the investment promotion process, what practical strategies can make it easy for project teams to move in and start operations?

01 Strong Integration of Projects and the Region

For project developers, a factory building is merely a physical space; its value lies in its utility for production and office operations.

Investment promotion, however, takes a different approach: it considers the project’s place within the regional value chain, which is crucial for future growth potential.

A strong linkage between the project and the region means more than just entering a physical space; it means becoming part of an industrial ecosystem, laying the foundation for the enterprise’s growth.

For example, when Shanghai Industrial Park attracts investment from companies in the Yangtze River Delta region, it doesn’t simply sell factory space to businesses. Instead, it highlights the project’s role in Shanghai’s urban development plan and its contribution to the broader Yangtze River Delta region.

In short, the key question is: what resources will the project gain upon establishment, and how will this benefit its development?

Some localities promote projects blindly, resulting in either vague and crude proposals or mismatched, formulaic approaches driven by “one-dimensional” thinking. Consequently, the projects they promote fall far short of the needs of both domestic and foreign investors.

Therefore, regardless of the pros and cons, a fact-based approach is key to investment promotion.

In one county, officials once sought to build a world-class particleboard factory. During the investment promotion process, the government and the company agreed on a production line with an annual capacity of 1.5 million cubic meters. However, the county’s forestry resources could only supply less than 500,000 cubic meters of raw materials.

Initially, they believed the shortfall could be made up by sourcing materials from neighboring counties, so they proceeded to sign the contract.

After signing the contract and commencing production, the enterprise discovered a severe shortage of raw materials, making it impossible to balance input and output. Left with no other choice, it chose to withdraw after incurring massive losses.

Whether for the government or the enterprise, research and investigation form the foundation for planning and the path to success. Without investigation, there is no right to speak, let alone the authority to make decisions.

Conducting thorough preliminary research involves not only vetting the project but also, crucially, assessing the resources required by the enterprise and the local supporting capacity.

On the one hand, when selecting a location, enterprises face a relatively unfamiliar environment. If they cannot develop the local market, the project will not grow; without growth, there will be no economic benefits, nor will it contribute tax revenue to the local area.

On the other hand, when a company makes an investment, its first point of contact is the investment promotion official. Whether seeking production support from the local government or industrial park, or assistance in connecting with the market, this involves an evaluation of the business environment.

02 Strong Link Between Enterprises and Services

Among the investment promotion cases I’ve shared recently, one in particular left a strong impression.

In cities surrounding the Beijing-Tianjin-Hebei region, due to tight government budgets, authorities began imposing fines on some well-managed local enterprises.

Among them, a Singaporean foreign-invested enterprise was fined over two million yuan for allegedly starting construction without approval in a certain year. The company was extremely dissatisfied with this and even considered leaving the city.

They then reached out to us, seeking a new suitable site. Clearly, the local government focused only on short-term gains and failed to properly serve existing enterprises, potentially leading to the loss of the project.

Earlier, during a visit to Hefei, one policy left a deep impression on me:

They prioritize reserving business opportunities for local small and medium-sized enterprises (SMEs) that have been attracted through investment promotion, supporting the growth of local businesses.

This is a sound strategy that highlights another aspect of investment promotion and business support.

We often hear the saying, “Bringing in outsiders while driving away locals.” Now that regions are competing fiercely for economic growth, enthusiasm for attracting investment from outside is high, but services for local enterprises may lag behind.

In some places, success is measured solely by tax revenue, while contributions in areas such as job creation, technological R&D, and environmental improvement are overlooked.

Consequently, no matter how favorable the local incentives may be, without economic contributions to back them up, they amount to nothing. Whether it’s provincial tax incentives or district-level tax incentives, they all become empty promises.

The ultimate goal of corporate investment is to generate profits. When the scope for preferential treatment on basic factors is limited, the region that excels in the allocation of new factors—such as technology, data, and finance—and operates with greater efficiency, thereby providing enterprises with ample room for growth, will gain the upper hand in targeted investment promotion.

Therefore, investment promotion must acknowledge the strength of robust local endogenous investment, focus on attracting investment from local entrepreneurs, and leverage rapid improvements in urban quality and comprehensive industrial support policies to attract enterprises that have expanded abroad to return home, invest, and take root.

03 Implementation and Industry: Strong Alignment

While the failure of projects to materialize is certainly related to both soft and hard infrastructure, the more critical factors are the limited development space within industrial clusters and the irrational layout of industries.

Undoubtedly, limited development space and irrational industrial layout result in small-scale industries that cannot form contiguous clusters, preventing the creation of large industrial chains.

In recent years, Beidou navigation has been a hot topic, and Beidou navigation industrial parks have sprung up across the country.

However, when companies inquired whether the parks had supporting electronics component suppliers—as they hoped to manufacture Beidou navigation terminals there—the region could barely provide the necessary product support.

The project team also noted that in Shenzhen, they could find anything they needed. It must be said that the industrial environment has a significant impact on project implementation.

Unclear local industrial positioning, scattered industrial layout, and a lack of distinctive features have led to a lack of clear direction in investment promotion. Projects are accepted on a case-by-case basis without considering whether they align with existing industrial structures. This results in projects that have weak connections to existing enterprises, making it difficult to concentrate efforts and resources on achieving key breakthroughs.

For the government and enterprises to find common ground, attract projects to the region, and achieve a win-win outcome, two key factors are crucial:

First, the availability of key resources within the region.

Second, the synergy of local industrial support systems.

In the context of intense industrial competition, enterprises’ demand for factor support has gradually shifted from policy incentives to allocation efficiency. Under this trend, traditional policies such as land, labor, and tax and financial incentives have become far less attractive to enterprises than before.

If the availability of key resources is the foundational advantage for attracting investment, then the region’s capacity for industrial synergy and support is the advanced advantage.

As industrial division of labor becomes increasingly specialized and collaboration among enterprises grows ever closer, many regions are building “tree-like” industrial ecosystems. In this structure, leading enterprises along the industrial chain serve as the trunk, while major component and key-link suppliers act as the branches, growing into a robust tree through mutual interdependence.

For “chain-based” enterprises, finding “playmates” is just as important as finding a “ready-to-move-in location”—and sometimes, companies even value the former more.

Ultimately, the regional industrial ecosystem is one of the decisive factors in project implementation.

When the industrial ecosystem is robust, investment becomes a mutual commitment between the region and the enterprise; when it is unbalanced, even if enterprises are attracted, the outcome may well be bitter.