I often interact with businesses and frequently hear their candid assessments of the government.

For example, a local leader in Region A is “quite professional”; the investment promotion director in County B “really understands the industry”; and City C has set up a “safety net” service window for businesses.

It is clear that the importance of investment promotion has once again been elevated.

From a micro perspective, it involves carefully assessing the needs and potential of investing enterprises. On a macro level, it is a key measure for optimizing industrial structure and driving regional economic development.

In fact, the four characters “investment promotion” themselves embody profound meaning and essence.

Careful consideration, deep reflection, and sharing these insights are worthy of every investment promoter’s thoughtful deliberation and dedicated practice.

01 Recruit — Don’t Forget Your Son After Recruiting a Son-in-Law

Investment promotion work is akin to “welcoming a son-in-law” and “raising a son”—it requires skillful balancing and a dialectical approach.

Simply put, when attracting enterprises, we must never “bring in a son-in-law only to drive away our own son.”

A few years ago, the author encountered this very issue during a research visit. There was a tendency to treat incoming enterprises and talent differently from local enterprises and talent, failing to treat them equally.

A local enterprise in North China recalled that it could often only benefit from general policies, while other industrial support policies remained out of reach.

In the rush to “recruit a son-in-law,” neglecting the care and support of existing enterprises may prevent some local businesses—which already have a solid foundation and have begun to scale up—from developing further. Worse still, they may relocate to other regions, becoming someone else’s “son-in-law.”

In many regions, competition to attract new enterprises is fierce. However, existing enterprises are beginning to face the risk of being lost, and the story of “picking up sesame seeds while losing watermelons” is playing out once again.

We must pursue “new partners” while cherishing “old ones,” balancing external recruitment with internal potential development. Regardless of whether a company is from outside or local, as long as it “orders” what it needs, the government must “serve” it precisely.

Take Chongqing as an example: when we frequently mention “attractiveness,” we refer to the combination of “major strategies, diverse scenarios, and a solid industrial foundation.”

The city consistently invites its local “old friends” to accelerate project commissioning and full-scale production in Chongqing, to deepen their roots, expand investment and operations, and engage in comprehensive cooperation to drive the cultivation and development of related industrial chains.

From a corporate perspective, deepening cooperation is called “stepping up the game”; for the government’s investment promotion efforts, it means tapping into potential and transforming “one-off deals” into closer partnerships with “city partners.”

Therefore, preventing the outflow of high-quality enterprises and existing resources from the local area should naturally be another focal point of investment promotion. The mindset that “securing our home turf is also a form of investment promotion” should be deeply ingrained.

02 Business — Waiting for Customers to Come to You Won’t Work

What is the first challenge facing investment promotion efforts?

The primary challenge is explaining why companies should invest in the local area. When presented with this question, can you provide a simple and clear answer that sparks the company’s interest in continuing the conversation?

I have had the privilege of attending promotional events in various regions and, as a local “external advisor,” have hosted investment firms on site visits. Throughout this process, I have observed a common phenomenon:

At the very first meeting, potential investors simply fail to see, understand, or grasp the “differentiating factors” of the region. In other words, they fail to recognize the comparative advantages of the local investment environment.

In fact, some companies feel that all regions are pretty much the same, with few distinctions. As a result, their final decision comes down to which location offers the best policies—and that’s where they’ll expand their operations.

When meeting with companies during site visits, I always hear the same line: “Whatever your company needs, we will do our utmost to accommodate it.”

However, investment promoters may not fully understand the company’s actual investment needs, and of course, some companies may choose not to disclose detailed investment plans at this stage.

For a company with investment needs, it’s like going to a supermarket to shop. Sometimes, you’re just browsing casually; other times, you’ve already decided what to buy and go straight to the checkout.

Most importantly, accurately assessing a company’s level of interest saves both time and effort.

In investment promotion, “target investors”—whether they are looking to expand production or enter new markets—must have a concrete intention to establish operations.

It is true that some companies seek to establish operations in a specific region because of its natural endowments, but such opportunities are rare and hard to come by.

To prioritize identifying investment-ready companies with both the need and the willingness to invest, one must understand industry research, market trends, and macroeconomic policies.

By understanding and mastering macro trends, local authorities can identify targets and take the initiative in investment promotion. Good projects won’t come knocking on your door; you can’t just sit around waiting for them to come to you.

03 Attraction — Selecting the Right Projects Like a Skilled Craftsman

In the past, investment promotion was often characterized by the approach of “focusing on the big and letting the small go.”

To attract multinational corporations and publicly listed companies, top local government officials would personally lead the charge, devise visitation plans, and offer generous settlement terms—often providing support through “super-national treatment”—for two main reasons:

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.

Today, however, competition among regions is essentially a competition of industrial chains. At the core of these chains, specialized, refined, distinctive, and innovative small and medium-sized enterprises (SMEs) play an indispensable role in securing positions, holding ground, and driving growth.

To be honest, not every region can “accommodate” large-scale projects.

Land resources are finite, inherent geographical conditions are limited, and the scarcity of certain resources makes some areas unsuitable for the survival and development of large enterprises.

When it comes to investment promotion, we cannot focus solely on the numbers—how many enterprises have arrived. We must strip away the fluff, examine the quality of implementation, and ensure that funds are actually in place.

In recent years, investment promotion has shifted toward “small yet cutting-edge,” “small yet specialized,” and “small yet exquisite” SMEs—enterprises that have long focused on specific niche sectors, honing their expertise in technology, craftsmanship, and product quality. At the same time, these enterprises demonstrate high levels of specialization, strong innovation capabilities, and significant growth potential.

Local efforts to cultivate “specialized, refined, distinctive, and innovative” SMEs are no longer merely a slogan in speeches but have evolved into a long-term investment strategy. By identifying enterprises in niche segments of industrial chains, these initiatives provide crucial support for industrial transformation and upgrading, as well as the transition from old to new growth drivers.

When selecting enterprises, localities must prioritize the long term over immediate gains, carefully screen projects that align with national investment guidelines, and conduct targeted investment promotion based on their own industrial development positioning and transformation needs. They should proactively attract projects with high technological content, strong economic returns, and significant spillover effects.

Of course, businesses ultimately vote with their feet; the fertility of a region’s investment soil depends on the adequacy of various relevant “nutrients.”

Under normal development logic, when a company chooses to invest in and deepen cooperation with a particular region, it serves as the best endorsement of that region’s industrial support systems, business environment, and strategic positioning.

04 Capital — As Proficient as an “Investment Banker”

Some say that capital-driven investment promotion is a rose with thorns.

As an innovative model for attracting investment, local governments have begun exploring new pathways of “attracting investment through investment.”

Most cities are eager to get started, leaving no stone unturned, and have become as adept as “investment bankers.”

However, few have succeeded. It must be said that Suzhou, Shenzhen, and Hefei are the undisputed “Three Musketeers.” These three cities have brought together numerous factors; their success is not simply a matter of replication.

Most concerning is that some regions treat “capital operations” merely as a tool for sowing investment seeds, lacking clear industrial positioning. Their investments are scattered across various sectors, chasing trends and star companies. They bring in “high-tech, high-end, and cutting-edge” projects from Beijing, Shanghai, Guangzhou, and Shenzhen, only to find that these enterprises fail to grow as expected—or even falter midway.

Whether through capital-driven investment promotion or other methods, understanding and thoroughly grasping the local industrial development needs is a prerequisite.

In this regard, the approach taken by the Hefei government is highly值得借鉴.

Frontline investment promotion staff in Hefei are all required to possess comprehensive knowledge of the entire industrial chain.

The development trends, industrial policies, supply chain dynamics, key target enterprises, and investment matching platforms for each industry are clearly presented in the form of text, tables, and charts, making it immediately clear which investors to target, where to conduct outreach, which enterprises to prioritize, and through which channels to attract investment.

The “capital” in capital-based investment promotion is not merely funds; its core lies in the capital markets.

We often hear about so-called “PE investment promotion,” “private placement investment promotion,” “fund investment promotion,” “fund of funds investment promotion,” and some even tout “M&A investment promotion” as a gimmick.

In fact, all of these can be collectively referred to as “capital-driven investment promotion,” with the underlying concept being “industry + capital”—that is, using capital operations to facilitate the establishment of industries.

Most people have not experienced the ups and downs of the capital markets or witnessed the power of market cycles. They tend to view capital operations as sophisticated, trendy, and high-profile, while overlooking their professional demands, complexity, and inherent risks.

Capital-driven investment promotion is not a panacea. Cases where project failures have led to severe losses for state-owned assets are not uncommon nationwide.

If local authorities lack sufficient understanding of the capital markets, or if their talent, funding, and risk tolerance are inadequate, they may make erroneous judgments about projects.

there is a high risk of “paying a heavy price for blind capital-driven investment attraction,” leading to a harsh reality where the once-flourishing fantasy turns into a shambles.

This “investment banking mindset” requires a precise understanding of industrial direction and development patterns.

Localities should engage professional industry analysis teams or appoint seasoned local industry experts as initiators to identify enterprises with high future valuation potential. They should establish a professional process and plan to broadly select key projects and provide comprehensive feedback to decision-makers.

Given that local economic conditions, leading industries, and corporate landscapes vary across regions, if localities rush to imitate one another while merely skimming the surface of blind trend-chasing, they will likely end up in failure—a perilous outcome!

In Conclusion

Ultimately, investment promotion boils down to the business environment.

By avoiding “showpiece projects,” “new officials ignoring past commitments,” and “cutthroat competition and redundant construction,” and ensuring that new projects and enterprises resonate in harmony with the local industrial foundation and resource factors, we can continuously drive economic development.