"How does the canal remain so clear? Because of the fresh influx of foreign investment."

When it comes to the top destination for foreign investment, the Yangtze River Delta is the obvious choice. Shanghai, as the leader of the pack, goes without saying, and provincial capitals naturally carry their own aura.

Yet there is one small city that has achieved “Jia” speed in the highly competitive Yangtze River Delta.

That’s right—this small city is Jiaxing.

As a major hub for foreign investment, why has Jiaxing been so successful? How has it defied convention to become virtually “surrounded” by foreign enterprises?

The answer lies in the convergence of “timing, location, and human factors,” and the secret to its high level of foreign investment lies in the concept of “supply chain.”

As China’s economy develops, news of foreign-funded factories relocating is constant. It cannot be denied that the relocation of some manufacturing sectors out of China is an inevitable trend.

However, China’s focus is not on what has been transferred out, but on what has been retained—and what exactly constitutes maintaining “manufacturing competitiveness”?

Why Are Foreign Investors Increasing Their Investments?

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Similarly, since the integration of the Yangtze River Delta has been elevated to a national strategy, Jiaxing’s development has benefited from fully immersing itself in the vast expanse of this “integration.”

Foreign investment is flocking here—Jiaxing possesses the perfect trifecta of favorable timing, location, and human factors.

Timing: The perfect moment to seize the opportunity

Late last year, a Jiaxing investment promotion delegation, led by the Jiaxing Municipal Bureau of Commerce, departed from Hangzhou Xiaoshan International Airport for a six-day European market expansion and investment promotion tour to Germany and France.

On the third day of the Jiaxing delegation’s visit to Europe, following the release of the State Council’s “New Ten Measures,” investment promotion agencies and delegations from provinces and cities across the country began traveling thousands of miles to attract investment both domestically and abroad.

When it comes to investment promotion, face-to-face meetings are the most effective approach. This time, Jiaxing took the initiative, and its overseas “order-securing” mission has already yielded substantial results.

At the time, certain points in the meeting report stood out: “We will spare no effort to help enterprises secure orders and expand markets, especially following the optimization and adjustment of epidemic prevention and control policies, by taking the lead in launching a ‘double-push’ campaign to attract investors and secure orders…”

As you can see, the Jiaxing Municipal Party Committee encouraged enterprises to go abroad to “secure orders.”

As a result, Jiaxing Ruili Home Textiles Co., Ltd. plans to establish a factory in Poland, and Jingxian Garment Technology Co., Ltd. has decided to set up an office in Japan... With its bold openness, Jiaxing has “secured” a leading position and “captured” the attention of both domestic and international audiences.

Openness is a stance, one inseparable from the “outward-looking” DNA inherent in the city of Jiaxing. To attract high-quality foreign investment through openness, a mere stance is not enough; substance is also required.

In Jiaxing, this substance encompasses a solid industrial foundation, abundant innovative vitality, and a high-quality business environment...

Geographical Advantage: Located at the Golden Center of the Yangtze River Delta

Jiaxing is a core city within the Greater Hangzhou Bay Area, a key city in the Shanghai metropolitan area, and a sub-center of the Hangzhou metropolitan area. It sits at the confluence of rivers, lakes, and the sea, controlling the strategic gateway to the Taihu Lake Corridor.

It is less than 100 kilometers from Shanghai, Suzhou, Hangzhou, and Ningbo, serving as a transportation hub for the Shanghai-Hangzhou and Suzhou-Hangzhou corridors and situated at the golden geometric center of the Yangtze River Delta.

After years of development, it has become a key city in the Yangtze River Delta’s high-end industrial chain. By continuously deepening industrial cooperation within the Yangtze River Delta integration, various counties, districts, and cities have established industrial parks related to the digital economy, photovoltaic industry, automotive industry, new energy sector, electronic information, equipment manufacturing, and telecommunications industries.

Talent and Foreign Investment: Increased Investment and Expansion

Behind the new trend of foreign-funded enterprises increasing their investments in Jiaxing, the “large market” is becoming an even more compelling reason for the city’s appeal. In the first quarter, a total of 36 enterprises in Jiaxing made additional investments amounting to $1.58 billion, and 18 new foreign investment projects exceeding $100 million were signed. An increasing number of enterprises have indicated that they will maintain or expand their existing operations in Jiaxing.

In February of this year, global industry leader Hormel continued to increase its investment in Jiaxing by $100 million, marking its third capital injection since establishing operations there.

Since establishing operations in the Jiaxing Economic and Technological Development Zone in late 2014, over the past eight years, Hormel Foods has expanded from manufacturing to R&D, and from frozen foods to ambient-temperature foods, allowing more and more local residents to experience the appeal of its high-quality products.

It must be said that Jiaxing’s vast customer base and expansive market are key factors driving foreign investors to favor deepening their presence here.

Attracting Investment: What Drives Success?

Behind the establishment of foreign investment projects lies not only investors’ “real money” but also a service philosophy of “everything for the investor,” which helps projects settle, commence construction, and begin production as soon as possible.

Simply “bringing in” high-quality projects is far from enough; a superior business environment serves as Jiaxing’s “golden calling card” for attracting foreign investors and is the “secret” behind the mutual attraction between foreign enterprises and Jiaxing.

This is precisely why the Danish LEGO toy project, which typically requires 236 days for approval from land acquisition to construction start according to regulations, was approved in just two months by the Jiaxing Economic and Technological Development Zone; the construction of Abbott’s Jiaxing factory set a record for the fastest factory construction in Abbott’s history; and the Singapore-based BreadTalk regional headquarters and production base project went from initial negotiations to formal signing in just two months…

Moreover, global industry leader Zopas Group of Italy has chosen to increase its investment, expand production, and strengthen its presence in the Jiaxing Economic Development Zone precisely because of its favorable business environment.

As early as March 2021, Zopas began production in the Jiaxing Economic Development Zone by leasing standard factory space in the International Innovation Park. Two years later, a groundbreaking ceremony was held for a new project with an annual production capacity of 90 million electric heating elements.

This marks Zopas Group’s largest single investment project outside of Europe to date.

The realization of this project stems from Zopas’s unwavering confidence in the Chinese and Asian markets, a confidence rooted in the Jiaxing Economic Development Zone’s visionary investment policies and high-quality, responsive services.

Zopas’s establishment marks yet another successful case of “industrial chain investment promotion” for the Economic Development Zone.

Zopas’ heating products are widely used in heating control units for equipment manufactured by companies introduced to the Economic Development Zone, such as Philips home appliances, Panasonic kitchen and bathroom products, and KLAUSMAFF.

Once local production is established, it will reduce transportation costs for numerous internationally renowned enterprises in Jiaxing when procuring heating equipment, while also promoting the clustering of upstream and downstream industries and enhancing the overall competitiveness of enterprises in the Economic Development Zone.

Clearly, Jiaxing’s approach to attracting foreign investment centers on the concept of “chains”; focusing on “industrial chains” to conduct targeted investment promotion is the fastest path to accelerating the aggregation of foreign capital.

In recent years, Jiaxing has implemented “map-based investment promotion” centered on building the “135N” advanced manufacturing industrial cluster, highlighting the city’s orientation toward utilizing foreign investment to serve the real economy.

In 2022, Jiaxing’s manufacturing sector attracted $1.283 billion in actual foreign investment, ranking first in the province and accounting for 40.6% of the city’s total; the high-tech industry attracted $1.723 billion, accounting for 54.6% of the city’s total—an increase of 8.0 percentage points compared to the same period the previous year.

At the same time, the city is accelerating the attraction of foreign-funded R&D institutions to drive industrial and innovation chains toward the mid-to-high end.

Dewokang, a leader in smart home technology, has relocated its global headquarters and some R&D functions from Germany to Jiaxing, aiming to establish the company’s largest global R&D center; Hormel’s Asia-Pacific R&D Center, along with its China Finance Center, Sales Center, and Financial Center, have successively settled in Jiaxing; foreign-invested enterprises such as Minth Group, KraussMaffei, DSM Zhongken Biotechnology, and Jinshang Precision have all established foreign-invested R&D centers in Jiaxing…

From directly attracting foreign-funded R&D centers and headquarters-type projects to encouraging foreign-funded enterprises to establish their own R&D centers—facilitating the transformation of these enterprises from “pure manufacturing plants” to “foreign-funded R&D hubs”—Jiaxing has charted a path of “chain-based” upgrading in its foreign investment attraction efforts, driving industrial and innovation chains toward the mid-to-high end.

Meanwhile, a new trend is emerging among foreign-invested enterprises in Jiaxing: bringing their “network of partners” along.

In February of this year, Nidec RIDEC’s new construction project began operations in Jiaxing, with an annual production capacity of 1,000 units of new energy vehicle drive testing equipment. Some of the equipment’s downstream customers are located just 2 kilometers away—Nidec Automotive Motor’s flagship factory for new energy vehicle drive motors.

This demonstrates how major foreign investment projects play a leading and driving role in building, strengthening, supplementing, and extending industrial chains, reflecting Jiaxing’s strategic approach to attracting foreign investment.

The Chinese Market: Where to Relocate?

Looking beyond Jiaxing to the national picture, the relocation of Apple’s supply chain from China could result in missing out on new opportunities in the Chinese market.

First, such industrial relocation is an inevitable trend in industrial development.

Second, key production components still need to be imported from China.

It is understood that the removal of 13 Chinese suppliers from the supply chain, coupled with the transfer of up to 300 billion yuan worth of production capacity to India, has attracted significant attention from all sectors.

For Apple, which has long regarded China as a key market, these supply chain adjustments raise questions.

When it comes to the supply chain, what is the core competitive advantage?

An often-overlooked factor: time.

Most people understand smart manufacturing as "high variety, low volume," but the challenges of producing products the market needs in the shortest possible time are entirely different.

Once a time constraint is introduced into any manufacturing problem, the complexity increases exponentially.

For example, Tesla’s next-generation 4680 battery, announced in 2022, is a prime example.

The silicon-carbon anode technology claimed to be used in the 4680 battery has actually already been mass-produced by domestic manufacturers, so it is not particularly novel.

However, Tesla’s pursuit of mass production comes with an additional qualifier: “high speed.”

At its Berlin factory, the company requires the production speed of 4680 batteries to reach 16 units per second.

This implies that even the traditional dry-process graphite anode technology—which is already quite mature—could become an immature technology requiring adjustments to processes and manufacturing workflows, let alone the dry-process technology for “silicon-carbon anodes,” which is still in the exploratory phase.

It must be said that for Chinese companies reliant on Apple orders, this is undoubtedly a heavy blow. Of course, the smartphone market will not come to a standstill simply because Apple has left.

On the contrary, the quality and value-for-money of domestic smartphones may well fill the void created by Apple’s supply chain adjustments. The rise of domestic smartphone brands has made the market realize that even without Apple as a major client, Chinese manufacturing can still maintain strong competitiveness.

This undoubtedly underscores that Chinese supply chain companies should not over-rely on any single client but should actively seek new partners to enhance their resilience against market fluctuations. This is particularly true in the tech industry, where constant vigilance is essential—market conditions are unpredictable, and challenges can arise at any moment.

Overall, as the domestic economy continues to develop, the relocation of manufacturing operations has become an inevitable trend. However, just as “Made in China” was once a guarantee of quality, we may one day see “Created in China” become synonymous with cutting-edge technology.