Industrial clusters are the backbone of economic development.

For a considerable period in the past, many investment promotion efforts lacked a selective approach to attracting investment.

Whenever a particular industry became popular, everyone would rush to imitate and follow suit, shouting slogans about building advanced industrial clusters, and instances of industries “duplicating each other” were all too common.

Such situations often lead to two outcomes:

On one hand, regions achieve effective industrial synergy—"you lead, I support"—resulting in robust and powerful industrial clusters; on the other hand, industrial homogenization leads to severe cutthroat competition among enterprises, creating clusters that are abundant in quantity but lacking in quality.

How can local governments chart a unique path in industrial planning and cluster development to avoid industrial “clones”?

"Clone" clusters aren’t scary—just don’t get sucked into the "vortex"

Food streets are a must-visit destination for every tourist.

People originally visit these streets to taste authentic local snacks, but today, local specialties are scarce. Instead, viral snacks like stinky tofu, grilled skewers, and luosifen dominate most snack streets.

When food stalls end up offering the same items, switching to a different variety might cost only a few thousand or tens of thousands of yuan. However, when industrial clusters are mismatched and planning is ill-conceived, the cost of recovery is incalculable.

Statistics show that over 70% of the leading manufacturing enterprises above a certain scale in the Chengdu-Chongqing region operate in the same industry. Furthermore, judging by the 14th Five-Year Plans for manufacturing in both regions, their overall frameworks are largely similar. The development of the manufacturing sector in the Chengdu-Chongqing region is characterized by “competition outweighing cooperation,” with insufficient collaborative development.

The issue of homogeneous industrial competition in the Chengdu-Chongqing region is a microcosm of industrial development in many other regions.

While industrial positioning is highly similar to that of neighboring cities, no effective coordination mechanisms have been established between them. This has led to increasingly fierce competition for investment between the two regions, causing regional development to fall into an industrial “vortex.”

First, there is the “vortex” of redundant construction.

Emerging industries represent opportunities that all regional economies seek to seize, but the costs associated with their development—including manpower, funding, and research—cannot be overlooked.

Especially during the early stages of industrial development, when numerous critical issues exist regarding core materials, components, equipment, and major engineering projects, it is difficult for third- and fourth-tier cities to drive the formation of emerging industrial clusters through a “money-burning” approach.

"Following the herd" may actually lead to the risk of redundant urban development, while issues such as the absence of top-level design and the low-end orientation of industries become prominent.

Second is the “quantity” vortex.

Currently, the development of some manufacturing industrial clusters is primarily in a phase of quantitative expansion. Overcrowded development spaces and competitive environments have not fostered improvements in the production efficiency of enterprises within these clusters.

As competition among enterprises, investment promotion efforts, and industries intensifies across regions, simple quantitative growth is unsustainable. Cutthroat competition among enterprises not only hinders industrial upgrading but may even lead to the demise of industrial clusters.

Finally, there is the “vortex” of competitiveness.

An industrial cluster is a living organism undergoing constant renewal, inevitably passing through different stages. If a cluster focuses solely on foundational technologies without core competitiveness to offer unique appeal—relying instead on uniform specifications—it risks accelerating its “aging” and being eliminated by the market.

A Four-Step Plan to Avoid “Clone” Industries

Industrial “clone” issues are not the core problem; strengthening industrial agglomeration is also a way to enhance the competitiveness of regional industrial clusters.

The real challenge lies in carving out a unique path—one that cannot be replicated by others—amidst the trend of industrial homogenization.

To chart a new course in industrial planning, one can start with three key aspects: industrial positioning, industrial layout, and industrial innovation.

Positioning refers to establishing a region’s appropriate role in the future economic development of its local area and beyond. There are two key points to positioning: adapting to local conditions and clarifying the direction.

Adapting to local conditions requires a “tailor-made” approach—first “taking measurements,” then “cutting the fabric.”

Taking the “measurements” requires a comprehensive assessment of local development conditions; however, there is a common misconception in this process: projects that can be launched immediately in the local area are not necessarily the most suitable.

For a long time, some regions have relied on local resource endowments and inherent advantages, allowing industrial clusters to grow freely. After decades of development, this may result in a single pillar industry and a severely unbalanced industrial structure.

These regions possess distinct industrial characteristics, but they also have fatal weaknesses.

Many of China’s townships have pillar industries capable of capturing global markets on their own, with annual output accounting for 30% to 70% of national or even global production.

However, these regions share a common trait: they lack large companies to lead the way, with production primarily carried out by small and micro-enterprises. This “scattered army” model is likely to evolve into a developmental disadvantage.

It is all too common for a new product designed by one company to appear across the entire market within three days, which significantly undermines companies’ willingness to invest resources in R&D. For the upgrading of industrial clusters, this does more harm than good.

As the local labor advantage diminishes, many factories face the prospect of relocating, leading to a continued erosion of the manufacturing ecosystem.

The current solution for these cities lies in transforming their current extensive production practices, deepening and refining their traditional优势industries, increasing product value-added, and establishing supporting industrial chains.

To clarify the future direction, it is necessary to play to our strengths and avoid our weaknesses.

Long ago, Wuxi City put forward an investment promotion slogan: “Whatever industries Shanghai develops, Wuxi must have corresponding supporting industries.” This approach to investment promotion—focusing on complementary supporting industries through differentiated development—has shaped the Wuxi of today.

In the development of a market economy, there must inevitably be primary and secondary roles, core and supporting sectors; it is unrealistic for everyone to play the leading role.

However, playing a supporting role does not mean having a small part. Take Wuxi as an example: by attracting one automotive parts giant after another, it has laid a solid foundation for future development.

Wuxi has succeeded through its geographical advantages and a down-to-earth, hardworking ethos. Similarly, other regions can succeed by leveraging their own existing industrial foundations, research strengths, resource advantages, and demographic strengths.

After tailoring industrial positioning to local conditions and capitalizing on strengths while mitigating weaknesses, it is essential to “unite knowledge with action” to ensure the implementation of industrial plans.

Regional planning is crucial for industrial development; discrepancies between planning proposals and actual implementation can potentially render all efforts to build industrial clusters futile.

After conducting regional surveys and investigations and refining and specifying industrial categories, the first step in implementing the plan is to “match” industries with specific regions.

However, in an effort to quickly clear out vacant factory space, some regions fail to secure sufficient industrial land, leading to discrepancies between the planning and decision-making for major industrial projects and their actual outcomes. Ultimately, this results in plans that lack practicality and scientific rigor.

Attempting to make adjustments later would require enormous investments of manpower, effort, and financial resources—resulting in a situation where one loses both the battle and the war.

If a region has already fallen into homogenized competition with neighboring areas, how can this be resolved?

The key lies in independent innovation, achieving “differences within similarities” between regions.

Upgrading core technologies can drive adjustments in industrial positioning, thereby avoiding the vicious cycle of industrial homogenization and competition. Simultaneously, the resulting industrial development landscape can also foster division of labor and cooperation among cities.

In addition to pursuing technological excellence, horizontal knowledge—specifically, understanding downstream customers—is another area worthy of deep cultivation.

In Luan Nan, Tangshan, Hebei—known as the “Hometown of Chinese Shovels”—there is a company that frequently travels the globe to expand its market for end-users. By gaining insights into global demand, they enhance their manufacturing capabilities through market-driven strategies.

With such enterprises leading the way, the entire industrial cluster can gradually expand its reach.

In Closing

Rome wasn’t built in a day, and similarly, building industrial advantages is not an overnight endeavor.

Today, regional integration has become a major trend, but “integration” does not mean “uniformity.” Only by transforming competition between regions into cooperation and competition among enterprises into mutual upgrading can regional industrial clusters truly accelerate along the fast track of development.