Choosing a business location is like placing a bet with real money to reveal the future. With the 618 shopping festival approaching, GuChuan United has released the *White Paper on Corporate Investment and Site Selection*. Drawing on 14 years of practical experience, this guide helps entrepreneurs evaluate site selection decisions from multiple perspectives.

Of course, this guide is equally valuable for investment promotion professionals—only by understanding what companies prioritize today can they continuously refine their investment promotion efforts and effectively highlight their own strengths.

01 From Economic Level to Industrial Infrastructure

Focusing on the Regional Macro-Environment

Location and Transportation

Today’s industrial division of labor is becoming increasingly specialized, with the transportation and logistics distance between suppliers and buyers generally falling within 200 kilometers—the so-called “2-hour economic zone.”

Therefore, the location and transportation infrastructure of an industrial park are crucial for enterprises. In addition to road accessibility, road classification, traffic capacity, the development of transportation facilities, and the ease of travel between the region and external areas, the following factors should also be considered:

1. Aviation: Key considerations include airport classification, passenger and cargo throughput, the number of routes, and flight frequencies

2. Rail: Key considerations include the availability of high-speed rail, the routes of passing trains, freight station throughput, and the number of train services

3. Road: Key considerations include traffic control measures (such as priority for large logistics trucks) and distance to highway on-ramps and national highways

4. Waterways: Primarily considers the presence of ports, port throughput, port classification, and loading methods

Economic Level and Administrative Tier

Economic strength is the foundation for a region’s future development. The higher the economic level, the greater the sustainability of industrial development, and the greater the capacity to provide better supporting infrastructure for businesses.

Indicators for measuring a city’s economic level include: GDP, per capita disposable income, and fiscal revenue. Additionally, the local economic situation and development potential can be assessed by analyzing changes in land transfer fees and residents’ debt capacity.

On the other hand, administrative level is also a factor worth considering. A higher administrative level implies greater access to public resources. Generally, the following hierarchy can be used as a reference: Special Economic Zones, National-level New Areas > National-level Development Zones > Districts and counties under provincial capitals, Provincial-level Development Zones > Municipal-level Development Zones > District- and county-level Development Zones.

Of course, the higher the level of a development zone, the greater the requirements for a company’s investment intensity and innovation capabilities—this is a two-way selection process.

Industrial Foundation and Industrial Positioning

Industrial competition and cooperation, supply and demand along the industrial chain, market potential, and market opportunities are all key factors influencing a company’s site selection.

The following aspects can be used to assess whether the local industrial foundation is robust or weak:

1. Number of enterprises and number of enterprises above a certain scale

2. The proportion of the industry’s output value relative to the total output value

3. The degree of industrial clustering, the number of upstream suppliers and their supply capacity, and the number of enterprises in the downstream consumer market and their purchasing power

Additionally, enterprises should assess the alignment between their own business profile and the local industrial positioning plans. For example, different administrative districts within a city may each have distinct designated leading industries: District A focuses on new energy vehicles, District B on textiles and apparel, and District C on electronics and information technology. Different leading industries entail different industrial support policies. Only by establishing operations in a district that aligns with the enterprise’s profile can it leverage these favorable policies to achieve rapid growth.

Natural Conditions

Most obviously, building a factory in a place that is warm in winter and cool in summer can save a significant amount on cooling and heating costs. Furthermore, environmental quality and the impact of natural disasters should not be overlooked.

In recent years, Guiyang has frequently promoted the slogan “Cool and Refreshing Guiyang.” This is not only to drive the summer “summer retreat economy” but also to highlight the appeal of cool, comfortable temperatures to manufacturing enterprises. Not needing to run air conditioning in the summer can indeed save a significant amount of money.

02 From Production Factors to Contract Fulfillment Capabilities

Evaluating Industrial Parks as “Partners”

As China’s economy undergoes transformation and upgrading, enterprises are increasingly inclined to choose mature industrial parks with well-developed industrial environments and supporting facilities—ones that can provide talent, capital, technology, and policy support.

Production Factors

Production factors are key indicators affecting corporate production costs, including land, labor, capital, technology, and data:

1. Land: Focus on the volume of land available, as well as the ease and cost of acquiring it.

2. Factor Costs: Particularly for energy-intensive industries, it is essential to monitor the prices of production factors such as water, electricity, and natural gas.

3. Labor: Labor-intensive industries focus on the supply of basic-level talent and minimum wage levels; technology-intensive industries, on the other hand, prioritize the availability and attractiveness of high-end talent.

4. Capital: Industrial parks collaborating with banking institutions and equity investment firms can develop diversified financial products, enabling enterprises to raise capital in the financial markets using their intellectual property.

5. Technology: Technological capabilities are key factors influencing corporate competitiveness and value-added. For example, industrial parks focused on fostering enterprise development may regularly host industry forums, organizing in-depth exchanges between technical leaders from park-based enterprises and industry leaders based on real-world case studies, thereby creating more opportunities for collaboration among enterprises.

Policy Support

Policy support encompasses multiple areas, including industrial policies, talent policies, land policies, tax policies, fiscal policies, and government regulation, often involving multiple departments, making it difficult for enterprises to fully understand them.

Overall, enterprises should focus on the following key areas:

1. Industrial Policies: Generally encompass macro-level policies or specialized development policies

2. Talent Policies: Policies for talent recruitment, talent support, and retention

3. Land Policies: Land use planning, benchmark land prices, and preferential policies

4. Tax Policies: Tax incentives and tax rebates from industrial parks 5. Fiscal Policies: Special funding support for high-tech industries, independent R&D, and technological upgrades

Ability to Fulfill Commitments

In recent years, competition among regions to attract investment has intensified, and investment policies have become increasingly transparent. However, instances where promised preferential policies cannot be honored after a project is established occur from time to time, resulting in damage to corporate interests.

Consequently, the ability to fulfill commitments has become a major focus for enterprises when selecting a location. This is particularly true for projects that are a priority for local governments, making it especially important for enterprises to assess the local government’s ability to fulfill commitments.

Enterprises primarily evaluate fulfillment capacity in three areas:

1. Local fiscal strength

2. Quality of the business environment

3. Turnover among decision-makers

03 From Infrastructure to Supporting Facilities

Pay attention to every detail of production and operations

The impact of industrial park facilities and supporting infrastructure on a company’s operations is often reflected in the details; therefore, it is essential to involve managers with experience in factory operations and management during site visits.

Facility Quality

1. Regarding Land

Industrial parks are generally developed on two distinct types of land: commercial and industrial.

Commercial land is generally restricted to research, experimentation, and sales operations; it cannot be used for prototyping, manufacturing, or processing. Management requirements for such parks are very strict—enterprises are not permitted to generate noise, exhaust emissions, or discharge wastewater—making them unsuitable for manufacturing companies.

Does this mean industrial land is open for unrestricted use? Not exactly. Industrial land is classified into Class I, Class II, and Class III based on its intended use, each suited for different types of enterprises.

Class I industrial land causes virtually no disturbance to residential areas or public facilities and is suitable for electronics, medical device, smart manufacturing, and handicraft manufacturing enterprises.

Class II industrial land causes some disturbance to residential and public facilities and may involve minor environmental waste emissions. It is suitable for the textile industry, food processing, and pharmaceutical manufacturing (note that pharmaceuticals and medical devices are strictly distinguished; please ensure clear communication when evaluating industrial parks).

Category III industrial land causes significant disruption to residential and public facilities and involves pollution; it is suitable for metallurgy, large- and medium-sized machinery manufacturing, chemical processing, mining, papermaking, building materials, and leather processing enterprises.

Currently, both Category II and Category III industrial land are zoned far from urban areas, and land supply is limited. Consequently, the prices of factory buildings and rental rates differ from those of Category I industrial land.

Enterprises may refer to environmental impact assessment reports or environmental protection filing requirements to select the appropriate industrial land. Generally, enterprises subject to the environmental protection filing system can meet their needs with Class I industrial land. Enterprises not explicitly required by their environmental impact assessment reports to use Class II or III industrial land may choose factory buildings and industrial parks on Class I industrial land.

2. Regarding Factory Buildings

Height: The installation of equipment in manufacturing enterprises often imposes strict requirements on the clear height of the factory building. Therefore, understanding the length, width, and height of the factory building is the first step for enterprises when selecting a facility within an industrial park.

A common question to ask is: What is the clear height of the factory building?

According to current design practices, the ceiling height of the ground floor is typically 1–2 meters higher than other floors to facilitate the installation of large equipment. If the height is distributed evenly, a ground floor ceiling height of less than 6 meters would be unsuitable for many production facilities and hinder the company’s operations.

Load-bearing Capacity: Similar to building height, production lines for precision instruments and high-end equipment manufacturing often have significant self-weight, so there are specific requirements for the floor load-bearing capacity of the facility.

A common question to ask is: What is the maximum load capacity per square meter?

Floors: Industrial park facilities generally have 5 to 7 floors, with building heights typically under 24 meters. Ground-floor units, which offer higher load-bearing capacity, greater ceiling height, and convenient access for trucks, are relatively scarce.

Some parks may also increase the floor load capacity on the second and third floors to meet corporate needs, raising the ceiling height accordingly and installing dedicated heavy-duty freight elevators to create dedicated freight corridors.

If a company has specific floor requirements, it should communicate these in advance before moving into the park to determine if the park has corresponding vacant floor space available.

Electricity: The park’s total power capacity determines the amount of electricity allocated to each company. Therefore, before moving in, it is essential to verify whether the park’s available power capacity can meet the company’s production needs.

It is worth noting that the stability of traditional single-circuit power supply is generally limited; in the event of insufficient power resources or temporary circuit failures, production may be disrupted due to power outages. In contrast, dual-circuit power supply ensures that if one power source fails, the other can continue to provide electricity.

Road Width: The width of internal roads within the industrial park directly affects the entry and exit of vehicles transporting raw materials and finished products.

A common question to ask is: What is the turning radius of the roads?

Living Amenities

Industrial parks located in the distant suburbs of a city offer certain advantages in terms of land costs, preferential policies, and industrial clustering, but the convenience of daily life is significantly inferior to that of the city center. In such cases, the living amenities within the park and its surrounding areas become particularly important.

Housing: Technical workers on production lines generally do not require high educational qualifications; proficiency and stability are the primary considerations. However, employee retention rates show a clear linear decline as commuting distances increase. Generally, the higher the density of residential communities within a 3-kilometer radius of the park, the larger the pool of available workers.

For example, the affordable rental housing in Shenzhen’s urban villages has lowered the barrier for various types of talent to enter Shenzhen to start businesses or find employment, while also reducing labor costs for labor-intensive manufacturing enterprises, thereby indirectly supporting Shenzhen’s industrial development over the years.

However, urban living infrastructure must keep pace with industrial development, and Shenzhen is no exception. Since the beginning of this year, Shenzhen has been implementing a program to lease and renovate urban villages. Although this initiative has balanced the interests of multiple stakeholders, it will still indirectly lead to rising housing costs for low- and middle-income groups.

From an industrial development perspective, this move may be intended to drive the upgrading of traditional industries or their relocation to central and western regions by raising labor costs for labor-intensive manufacturing enterprises.

Cafeterias: The presence of on-site cafeterias in industrial parks significantly impacts a company’s production efficiency. After all, you wouldn’t want employees spending time every day starting at 11 a.m. debating what to eat for lunch—every minute spent on such discussions represents real money lost by the company.

It is worth noting that areas with a high concentration of factories often see the emergence of mobile food stalls offering large quantities at low prices. The local government’s approach to regulating such situations can also indirectly affect employee retention.

Parking Spaces: Limited parking is a common issue in many industrial parks. Therefore, before moving into a park, companies must assess the number of available parking spaces within the park and check for accessible parking lots in the surrounding area.

Internet: Modern business operations rely heavily on network infrastructure. When evaluating a park, you can test connectivity via phone calls, video calls, or voice calls. After assessing communication and Wi-Fi coverage, you should further investigate whether the broadband provider offers stable service and if gigabit broadband is available on-site.

Other

Clean Energy Infrastructure: In the future, “carbon footprints” may influence a company’s ability to enter international markets. Manufacturing companies planning to export products to Europe and North America should address this issue early on.

Carbon footprint refers to the total carbon emissions generated throughout a product’s lifecycle—from raw materials, manufacturing, storage, transportation, and sales to use, disposal, and recycling. Currently, carbon footprint assessment is gradually becoming a mandatory requirement for product exports, particularly to Europe.

Therefore, a park’s clean energy infrastructure is a critical factor for companies required to track their carbon footprint. All else being equal, locating in a park with renewable energy supply provides a competitive advantage for companies looking to expand into new markets and achieve their carbon reduction goals.

Due to space limitations, this article provides only a partial overview. Follow Guchuan United and reply with the keyword “I Want to Select a Site” in the comments section to receive a free digital copy of the *Corporate Investment Site Selection White Paper*.