This year, investment promotion has seen a new surge of activity.

Just how intense is it? Overseas investment promotion, organized delegations, and international outreach... Sitting in the office, how could any companies possibly come to us?

At night, the section chief is editing investment promotion presentations, while the director is hosting business guests...

In fact, making international calls at two or three in the morning to discuss partnerships has become routine. So says an investment promotion official from Suzhou.

Amid this boom, critical issues are also constantly emerging.

When it comes to investment promotion, is getting a head start enough? Does going out on the road guarantee projects? Will industries really take off?

01 Busyness Is the New Normal

Before we know it, the year is drawing to a close. This year has offered a glimpse into the broader landscape of investment promotion across China’s provinces and cities:

Localities are rolling out new strategies and setting new trends in investment promotion. Top officials are frequently rolling up their sleeves to get involved—just look at how busy they’ve become!

For example, the Yangtze River Delta is focusing on solving practical problems, specifically reforming management mechanisms and strengthening industrial investment and financing platforms.

In the central region, authorities are seizing the opportunity presented by the “empty the cage to attract new birds” strategy, focusing on attracting projects that strengthen, fill gaps in, and extend industrial chains. Investment targets have become clearer, with emerging industries such as biopharmaceuticals and advanced manufacturing becoming highly sought-after.

Most notably, top officials in many regions are personally leading delegations to visit entrepreneurs, emphasizing their commitment to serving private and foreign enterprises with the dedication of a dedicated waiter.

A friend in the investment and financing sector told me that in the past, attracting businesses simply required cheap labor, affordable land, and generous fiscal subsidies.

But things are different now. Companies first assess risk, then consider costs, and finally evaluate their expectations for the next 3 to 10 years.

Even if a company is successfully attracted, retaining it is even more challenging. Local governments across the country are making concerted efforts to optimize the business environment.

Rather than competing for projects, the Yangtze River Delta region is focusing its efforts on “institutional appeal.” For example, Anhui has implemented a three-tiered (provincial, municipal, and county) tracking and support system through its commerce departments for the 85 proposed investment projects this year, while Shanghai and Zhejiang are also continuously stepping up their efforts.

It is now said that investment promotion must be market-oriented and law-based; while the former is gradually being realized, the latter requires significant effort to achieve. After all, government integrity is the region’s greatest guarantee of credibility.

Put simply, this means building a positive reputation. Businesses operate within networks; if a region is constantly complaining, who would dare to invest there?

Furthermore, policy continuity is crucial.

Beyond top-level officials, the attitude of mid-level and grassroots investment promotion staff toward enterprises is also crucial. Truly putting enterprises first and minimizing disruption is the best form of support.

Simply put, this must be elevated to the institutional level. After all, once the initial enthusiasm fades, fatigue inevitably sets in.

Looking back, the more aggressive the investment promotion efforts, the greater the difficulty.

02 Standards for Attracting Investment

Whenever I open investment promotion news, I always see reports from various localities boasting about “targeting Fortune 500 companies,” “another Fortune 500 company setting up shop,” and “major projects driving major industries.”

Clearly, attracting large and strong enterprises is one of the key directions for local investment promotion.

In the past, investment promotion was all about “prioritizing the big and letting go of the small.” To attract multinational corporations and listed companies, top local government officials would lead the charge, draw up visit plans, and offer generous settlement terms—often providing support through “super-national treatment.”

There are essentially two reasons behind this:

First, large enterprises possess advanced technology, state-of-the-art equipment, mature operational models, and stable supplier networks.

Second, such enterprises are large in scale, involve substantial investment, and generate high returns, capable of driving local employment and fiscal revenue.

In fact, judging projects solely by their size is one-sided; selecting projects that are highly compatible with regional development is more beneficial for local growth.

The fervor surrounding “attracting major and strong enterprises” is not the key; what matters is whether the projects can actually be implemented.

During the initial planning phase, pay attention to the following points:

• Project planning must be closely integrated with industrial positioning. Analyze the current status of completed, under-construction, and major projects across various industrial chains to identify opportunities for extending these chains.
• Projects must be highly feasible. Many industrial parks plan projects that are detached from actual industrial conditions, blindly pursuing high-investment, high-value-added projects that ultimately fail to materialize.
• Projects should have promising market prospects. Project planning should integrate national policies, market growth potential, the market capacity of surrounding regions, and feasibility analyses regarding the localization of the industry.

Scale is merely one dimension for evaluating high-quality projects, while alignment is the decisive factor in whether a project can be implemented and sustainably developed after implementation.

To assess alignment, first consider whether the project conforms to local policy and planning; second, evaluate market prospects and capacity; and third, assess the feasibility of localizing the industry.

03 The Boundary Between Government and Business

When discussing the relationship between government and business, it is akin to the support crew and the driver in a rally race.

The driver drives, and the support team handles maintenance—each fulfilling their respective roles and excelling in their areas of expertise.

The government’s primary role is to provide services and support for enterprises within its scope of responsibility and expertise—building roads, constructing bridges, and ensuring a full tank of fuel.

It’s understandable that when leaders see the “driver” moving slowly, they want to overtake quickly. Leaders can sit in the “back seat” to offer reminders, or even take the “passenger seat” to provide guidance.

However, under no circumstances should they attempt to direct the driver without even holding a driver’s license or understanding traffic rules—or, out of impatience, slam the accelerator to the floor.

If this continues, the chances of successfully overtaking are slim; instead, the vehicle is likely to roll over.

Once, a local government launched a semiconductor project, appointing a capable administrative official as chairman. They provided whatever resources and policies were requested, mobilizing the entire province to support the company.

However, this chairman lacked corporate management experience and had zero industry expertise. He selected an inadequate technical team, and corporate management was chaotic—naturally, the project could not succeed.

Take the semiconductor industry, for example: it is a highly specialized, technology-driven sector where a deep understanding of industry dynamics and expertise in corporate management are the most critical factors for development.

Whether the government is offering advice to a company or making an investment, it must first assess whether its own expertise in corporate management and industry experience surpasses that of the entrepreneur.

As an observer, it is clear that internal problems in some companies are often the result of external interference.

Excessive external interference ultimately manifests in corporate governance. With conflicting demands from various parties—different departments, commissions, and local governments—each pushing their own agenda,

Within the enterprise, the focus shifts from corporate interests to personal interests, exacerbating internal divisions and conflicts and making the problems even more pronounced.

Consequently, senior government officials, observing major problems within the enterprise, intervene with even greater intensity. This cycle repeats itself, creating a vicious cycle.

Given this, when local governments develop any industry—from planning and investment attraction to cultivation—it is crucial to ground efforts in reality, take a holistic view, and plan with foresight, thereby creating a sustainable, self-sustaining ecosystem with unimpeded circulation.