In the 1980s, the saying “Don’t look to the mayor; look to the market” was widely circulated among businesses.

Three or four decades later, this saying has evolved into “Seek out both the mayor (or county magistrate) and the chairman.”

This simple phrase reflects a significant transformation in China’s economy and industrial development.

Once, this phrase symbolized the shift from a planned economy to a market economy; today, it signals that the “chain leader system” has taken root across the country and is beginning to bear fruit.

The Chain Leader System connects industrial chains, links enterprises, and coordinates resources and factors of production. The Chain Leaders—who are the top local officials—have become the backbone of local investment promotion.

However, the “soul” of local investment promotion is not limited to top officials alone.

The “Backbone” of Frontline Investment Promotion

Investment promotion, particularly the attraction of major and high-quality enterprises, is an enduring theme in regional economic development. Whether it is Hefei and NIO, Shanghai and Tesla, or Zhengzhou and Foxconn, there are countless examples where the establishment of a single enterprise has driven the formation of an entire industrial chain.

Precisely for this reason, attracting major and high-quality enterprises has become a top priority for local leaders—not only the foremost task but also one spearheaded by them personally.

Zhejiang has long been a “top performer” in investment promotion. Earlier this year, Zhejiang required the top leaders of local governments to devote one-third of their energy to investment promotion. They are expected to take a hands-on approach—negotiating, recruiting, and providing services personally—to facilitate project negotiations and implementation.

What have been the results?

In 2021, Huzhou stipulated that “the top leaders of district and county governments must devote more than one-third of their energy to investment and talent attraction, while the principal leaders of industrial parks and platforms must dedicate more than 50% of their energy to these efforts.” In just one year, 33 local projects were included in the province’s major industrial projects list, ranking first in the province in terms of quantity.

Only “top leaders” can attract “major investors.” In investment promotion, decision-making authority determines influence. Local top leaders can play the role of the “critical few”; their capabilities, credibility, and personal charisma all exert a significant influence on corporate investment decisions.

Typically, the leadership style of a local top official sets the tone for a region’s work.

In 2020, an entrepreneur noticed that the photovoltaic industry—in which his company operated—was absent from Anhui Province’s plan for the top ten strategic emerging industries. After this was brought to the attention of higher authorities, Anhui activated its “top-level” communication mechanism. Governor Wang Qingxian personally oversaw the process, directing the enterprise and the government to jointly formulate the “14th Five-Year Plan” for the photovoltaic industry.

Within just one year, more than a dozen leading photovoltaic companies had already established operations in Anhui.

Anhui Governor Wang Qingxian once stated, “We must respect entrepreneurs and give them greater say.” Consequently, in 2021, members of the Anhui Provincial Government met with entrepreneurs on more than 550 occasions, engaging with a total of 5,075 entrepreneurs.

This year, in the conclusions of the 2022 “10,000 Private Enterprises Evaluate the Business Environment” survey released by the All-China Federation of Industry and Commerce, Anhui Province ranked 8th nationally in the comprehensive score, an improvement of 8 places from the previous year.

This demonstrates that top leaders play a crucial role in investment promotion not only because they hold decision-making authority, but more importantly, because of their ability to provide top-level design and planning.

Today, “chain leaders” across various regions are primarily appointed from among the top Party and government officials at the county, city, and district levels. For example, at the grassroots level in Zhejiang, 80% of “chain leaders” are local top officials.

It can be said that local top leaders serve as the indispensable “backbone” for frontline investment promotion personnel and for enhancing the competitiveness of local industrial chains. Of course, industrial chain investment promotion relies not only on top leaders but also on “chain-leading” enterprises.

A "Think Tank" for Local Enterprises

I once heard a small and medium-sized enterprise (SME) say that their feelings about receiving orders are now quite complex. With large orders, they worry whether their production capacity is sufficient; with small orders, they worry about the complexity of industry standards and whether they can even fulfill the order.

Consequently, they oscillate between the fear of “living from hand to mouth” and the aspiration to “grow stronger and larger.” The “chain-leader system” has effectively addressed this issue; in fact, many SMEs have even chosen to establish production in a particular region while searching for a chain-leader enterprise.

The title of “chain leader” may be brief, but the responsibility is no small matter.

Chengdu leveraged CRRC Changchun Railway Vehicles, a chain leader, to attract 15 technology-based manufacturing enterprises to invest and establish operations in the city, bringing the total number of guided enterprises to 45. How did Chengdu achieve this?

Two prerequisites deserve attention:

The anchor enterprise itself must occupy a “super node” position within the industrial chain, possessing strong influence over both upstream suppliers and downstream markets; simultaneously, leveraging its scale, it can set requirements for suppliers and even become a standard-setter for the industry.

CRRC Changchun possesses the capabilities of a “chain leader” spanning the entire spectrum from the design and manufacturing of rail transit vehicles and components to maintenance and operational support. With a local supply chain coverage rate of approximately 63%, it demonstrates the “chain leader’s” ability to integrate the chain into a cohesive ecosystem.

The core role of a chain-leading enterprise is to use a digital system to restructure the existing industrial chain, which requires the chain leader to have a thorough understanding of the situation of hundreds or even thousands of enterprises along the chain.

By identifying gaps in the industrial chain and utilizing supplier lists, high-quality target enterprises can be selected. In this process, the government can take the lead in assisting the "chain leader" enterprise with recruitment and promotion efforts, thereby achieving the goal of attracting investment to the industrial chain.

"Chain leaders" serve as strategic advisors to local enterprises. To gain greater certainty, local small and medium-sized enterprises are actively joining the chain leader ecosystem, with their reliance on it gradually increasing.

The bonds among enterprises within the chain-leader ecosystem are growing ever tighter, which could deal a fatal blow to enterprises outside the system. The market still requires an invisible “helping hand” to mediate and ensure balance and sustainability among enterprises.

The “Golden Key” to Regional Development

Today, most regional leaders have taken on the additional title of “chain leader,” with investment promotion becoming one of their many responsibilities.

For many enterprises, their first direct encounter with a "chain leader" stems from an urgent appeal for help.

A staff member from the “Chain Office” recalled that during a survey of an SME in the integrated circuit industry chain, the company’s manager reported that they were unable to secure a mortgage loan due to a lack of fixed assets.

Two days later, he visited the company with bank representatives to provide on-site assistance. Ultimately, the company secured 5 million yuan in intellectual property-backed financing, resolving its immediate crisis. Within just one year, the company was recognized as a provincial-level “Specialized, Refined, Unique, and Innovative” (SRUI) “Little Giant” enterprise.

“If you have a problem, go straight to the Chain Leader!” This represents the most obvious and fundamental stage of the Chain Leader system.

As industrial chain investment promotion efforts deepened, the Chain Leader System began to focus on the broader picture. Based on industrial investment promotion maps, databases of key enterprises, and databases of key projects, it worked to extend, supplement, and strengthen industrial chains.

Today, the Chain Leader System has evolved into its third phase, focusing not only on enterprises and industrial chains but also on local innovation chains.

For example, driven by the Chain Leader System, Jiangxi has integrated resources to establish industrial chain science and technology innovation consortia led by leading enterprises or high-efficiency entities. Simultaneously, it has forged partnerships with major research institutes and universities to attract high-end R&D resources from state-owned enterprises and national-level institutions to take root locally.

In Conclusion

The “chain-based” approach to investment promotion is fundamentally different from the old methods that relied on policy preferences. However, no matter how investment promotion methods evolve, their essence remains the same: providing high-quality and efficient services to enterprises.

Clarifying and adjusting the relationships among top leaders, chain leaders, and chain managers can better help local industrial clusters achieve mutual balance and address gaps in their industrial chains.