When it comes to attracting investment, policy serves as the "driving force."

As the "lifeblood" of regional economic development, investment promotion must respond swiftly and act with precision when faced with change and acceleration.

In September, amid a gradually and steadily improving economic landscape, both the central government and local authorities began shifting their focus toward high-quality development.

Topics such as optimizing the business environment, fostering distinctive industrial clusters for small and medium-sized enterprises, and accelerating industrial relocation and reception have been repeatedly emphasized by both national and local authorities.

Solving Problems, Overcoming Challenges, and Restoring Vitality

On September 15 of this year, the General Office of the State Council issued the "Opinions on Further Optimizing the Business Environment and Reducing Institutional Transaction Costs for Market Entities."

The document aims to alleviate operational difficulties faced by market entities, particularly small, medium, and micro enterprises, as well as individual businesses. The "Opinions" outline key tasks across five areas:

• Reducing market entry costs;
• Reducing the operational burden on market entities;
• Reducing administrative costs for market entities;
• Protecting the legitimate rights and interests of market entities;

• Stabilizing policy expectations for market entities.

The five categories of market entities identify the primary beneficiaries of this policy.

The nation is currently at a critical juncture of “overcoming difficulties together and reviving the economy.” However, recent findings from the State Council’s inspection teams, which have traveled to various regions to conduct investigations, reveal that many areas still engage in practices of “extorting bribes and demanding favors.”

If this continues, small and medium-sized enterprises and individual business operators will suffer greatly, and their survival will be threatened.

This circular serves, on the one hand, to sound a warning to local governments, and on the other, to reassure market entities.

In fact, policies to assist and alleviate the difficulties of small and medium-sized enterprises have been issued frequently this year, but most have focused on “exemptions, reductions, cuts, refunds, deferrals, subsidies, and support”—relatively direct forms of relief.

This policy, however, focuses on the business environment and reducing institutional transaction costs for market entities. By addressing the "soft environment," it aims to boost the confidence of market entities in production.

However, just as with previous relief policies, while the central government has issued the document, its effective implementation requires active cooperation from local authorities.

If these policies are detached from the actual survival conditions of local enterprises, they will amount to nothing more than a castle in the air.

On September 28, Shanghai released the “Several Policy Measures to Support Industries, Strengthen Market Entities, and Stabilize Growth in Shanghai” (hereinafter referred to as the “22 Measures”).

This marks the third round of economic stabilization measures introduced following those in March and May of this year. Compared to the previous two rounds, the objective of this policy has evolved from merely safeguarding market entities to strengthening them. It provides corresponding support for small and micro enterprises, high-tech enterprises, and high-quality enterprises.

Furthermore, Shanghai will focus on supporting small, medium, and micro market entities to grow stronger and more competitive, thereby further stimulating internal vitality.

This update to the policy reflects Shanghai’s swift response to central government directives.

Small and Medium-Sized Enterprises Can Achieve Great Things

"Small and medium-sized enterprises can accomplish great things."

On September 13, the Ministry of Industry and Information Technology issued the "Interim Measures for Promoting the Development of Specialized Industrial Clusters of Small and Medium-Sized Enterprises" (hereinafter referred to as the "Interim Measures").

The document proposes that during the 14th Five-Year Plan period, approximately 200 clusters will be recognized nationwide, and local authorities will be guided and supported in fostering a batch of provincial-level clusters.

In the past, industrial clusters were typically formed and led by industry leaders and Fortune 500 companies—enterprises with a leading effect—while SMEs mostly played a role in extending and complementing the industrial chain.

So why have SMEs become the main protagonists of industrial clusters this time?

In fact, Article 2 of the Measures clarifies that the scope of these specialized industrial clusters for SMEs is limited to the administrative boundaries of counties.

In May of this year, a policy document titled “Urbanization with County Towns as Key Carriers” proposed designating county towns as key platforms for “developing distinctive and competitive industries” and guiding the concentrated and clustered development of county-level industries.

Since then, provinces, autonomous regions, and municipalities have begun formulating policies related to SME industrial clusters.

According to incomplete statistics, there are currently more than 600 designated demonstration zones for block-based economic industrial clusters, county-level specialty industrial clusters, and specialty towns across the country, which have played a significant role in driving regional economic development.

However, issues such as a lack of distinct leading industries and weak core competitiveness also persist.

Against this backdrop, the "Measures" further aim to accelerate the high-quality development of county-level economies by advancing the upgrading of industrial foundations and the modernization of industrial chains.

It is evident that concepts such as high-quality development and specialized, refined, distinctive, and innovative enterprises are no longer exclusive to urban areas; today, the synergistic and supportive role of industrial and supply chains in county-level cities is becoming increasingly significant.

Orderly Promotion of Industrial Relocation

On September 5, the Zhejiang Provincial People’s Government issued the “Guiding Opinions on High-Quality Development and the Construction of a Global Advanced Manufacturing Base.”

The "Opinions" specifically mention that, to build a global advanced manufacturing base, Zhejiang Province will accelerate the phasing out of outdated production capacity and expand and optimize effective investment in manufacturing.

The province requires the annual restructuring and upgrading of 5,000 energy-intensive and inefficient enterprises to achieve efficient industrial restructuring.

This month, Sichuan Province released policy documents on the orderly transfer of manufacturing industries, which appear to echo Zhejiang’s policies.

In particular, the document highlights the need to innovate models for inter-regional industrial cooperation. It calls for actively coordinating with developed eastern regions such as Zhejiang and Shenzhen that provide targeted support to Sichuan.

It also calls for exploring both full-chain and partial industrial transfer models to establish a number of demonstration zones for industrial relocation.

These two policies—one promoting outflow and the other inflow—demonstrate the accelerating pace of domestic industrial relocation.

Furthermore, data on national urban GDP growth rates and foreign investment growth this year show that the central and western regions have performed remarkably well.

In the first half of this year, eight of the top 10 cities by GDP growth were located in the central and western regions; from January to August, actual utilization of foreign investment in China’s eastern, central, and western regions grew by 14.3%, 27.6%, and 43%, respectively.

The vast western regions are becoming a hotspot for investment and a new “high ground” for attracting foreign capital.

When it comes to industrial relocation from the eastern regions, some might assume that the central and western regions are developing only low-tech industries.

In reality, this is not the case; enterprises in the fields of new energy, the digital economy, and semiconductors are already making significant strides in the West.

Chengdu’s chip industry cluster is becoming increasingly comprehensive, with leading enterprises setting the pace across the entire process from chip design to packaging and testing; Guizhou, leveraging its unique natural environment and hydropower industry, is poised to emerge as a dark horse in the big data sector…

Today, Sichuan is also leveraging its established advantages in the silicon wafer industry to further develop the silicon-based photovoltaic sector and build a complete industrial chain.

It is evident that as the domestic economic cycle accelerates and the eastern coastal regions pursue high-quality development, the central and western regions will also move more swiftly to absorb industrial transfers and develop high-tech industries.