In the office, I often hear our business development colleagues discussing site selection criteria with clients over the phone.

Location, land prices, ceiling height, floor area, load-bearing capacity...

Digging deeper, there are local policies, the current state of the industry, and whether there are any leading enterprises in the area. Are there fast-track approval processes, or does the government offer R&D subsidies?

When selecting a location, companies need to interact with government-run industrial parks. However, many companies lack experience in site selection and are unfamiliar with the local environment, often leaving them completely at a loss.

How can companies avoid detours and choose the right industrial park? This feature will briefly explore these questions.

01 Transportation + Economy: The Primary Factors

Transportation infrastructure, as the primary consideration in site selection, is like the lifeblood of a business, permeating every aspect of daily operations.

For a business, a location with convenient access and a well-developed transportation network makes it easier to attract and retain top talent.

More importantly, such a location ensures efficient information flow and timely logistics services.

Imagine a manufacturing enterprise situated at a major transportation hub, with seamless connectivity via road, rail, waterways, and air.
Such a location will undoubtedly boost talent attraction and resource flow while ensuring a stable and efficient supply chain.

Of course, simply considering road accessibility is far from sufficient; it is necessary to delve into every detail of the transportation network.

Are there traffic restrictions on the roads? How far is the industrial park from expressways and national highways? What are the throughput capacity and frequency of rail freight stations? Do the port’s clearance level, throughput, and loading methods meet requirements? Are airport routes and flight frequencies sufficient? Is the location near transportation hubs for water, land, air, and rail?

These factors will directly impact a company’s operational efficiency and cost control.

For example, the benefits of being close to customers and raw material sources are obvious. Shorter distances naturally reduce delivery times.

Take a dairy plant as an example: since most of its products are sold locally, it needs to be located near densely populated cities. This proximity to the market not only saves on transportation costs but also reduces unnecessary expenses.

In addition to transportation conditions, economic strength is another crucial factor that cannot be overlooked during the site selection process.

A region’s economic data serves as a calling card for the city, not only showcasing its overall strength but also reflecting the quality of the external business environment.

Data such as GDP, per capita GDP, and local fiscal revenue are all key indicators for measuring a region’s market vitality and consumer spending power.

Choosing a region with strong economic strength means the company can access more market opportunities and enjoy broader room for growth.

02 Industrial Factors: A Multi-Dimensional Approach

When selecting a location, a company cannot rely solely on the quality of the site; it must also consider multiple dimensions, such as the industrial chain, industry clustering, and the scale of surrounding businesses.

First, a comprehensive review of the local industrial chain is necessary.

A complete industrial chain provides businesses with a stable supply-and-demand environment. Companies should gain a deep understanding of upstream suppliers’ production capacity and downstream market consumption capacity to accurately plan inventory and formulate reasonable production schedules.

At the same time, it is essential to understand the local industrial cluster dynamics, actively integrate into the business ecosystem, and become an integral part of the industrial cluster.

This approach not only increases opportunities for collaboration with other businesses but also allows for the effective utilization of local resources, fostering a win-win outcome.

Furthermore, it is crucial to have a clear understanding of the number of local enterprises.

In particular, the number of large-scale and leading enterprises—whose activities often reflect overall market trends—can help us adjust our strategies in a timely manner.

It’s worth paying close attention to your “neighbors” in the area; they may become important partners for future development.

Of course, construction conditions and land costs are factors that must be considered.

Factors such as complex topography and geological conditions can impact construction costs, operational efficiency, and even future expansion plans. Some plots that appear ideal may harbor economic risks, such as high foundation treatment costs.

For example, a listed company that selected a national-level development zone as its location in 2020 discovered, due to insufficient preliminary research, that there were karst cavities beneath the plot only after signing the investment agreement. This led to a sharp increase in foundation treatment costs, ultimately forcing the company to relocate.

Additionally, the prices of basic utilities—such as water, electricity, and natural gas—are significant components of production costs. For energy-intensive enterprises in particular, these costs directly impact long-term profitability.

For enterprises seeking to establish operations in national-level, provincial-level development zones, or high-tech zones, additional factors must be considered.

For example, the ability to secure foreign capital, the scale of the project investment, industry alignment, and the company’s standing within the industry. Meeting even one of these criteria significantly increases the likelihood of successfully securing land.

03 Park Infrastructure: The Devil Is in the Details

Different industries place varying emphasis on the supporting facilities within an industrial park.

Take the currently booming medical device industry as an example: when selecting a site, companies prioritize factors such as site area and spatial layout.

An ideal medical device industrial park should provide spacious and well-designed warehouse space to ensure proper storage of large quantities of medical devices; offer efficient cleaning equipment to maintain a hygienic production environment; and provide advanced office facilities to enable more efficient and seamless business management.

Such a comprehensive environment not only boosts work efficiency but also reserves room for the company’s future growth.

Speaking of future development, a production facility compliant with GMP standards typically requires 2,000 to 5,000 square meters of space.

This requires the park to consider the company’s growth potential and expansion needs during the initial planning phase.

During the site selection process, companies need to maintain thorough communication with the government and the industrial park authorities. From building ceiling height, load-bearing capacity, and electrical load to exhaust and plumbing conditions, every detail can impact subsequent production and R&D activities.

For example, to ensure the construction and daily maintenance of clean laboratories, the ceiling height must be at least 4.2 meters; to support the operation of heavy equipment, the load-bearing capacity should range from 500 kg to 1 ton; and the electrical load requirements for medical device companies far exceed those of traditional office spaces.

Site selection is no easy task, and for some projects, it can be difficult to determine which industrial parks are best suited to their needs.

Take the Swiss company Trate AG as an example. When selecting a site in China for the first time last year, the company was unfamiliar with the site selection process, methods, and regional characteristics in China, leaving them with little to no understanding of how to quickly invest in the country.

In response, they actively sought the assistance of GuChuan United, a market-oriented investment promotion agency, to precisely screen for suitable industrial parks.

During the site selection process, Guchuan United’s service staff communicated with the company regarding their preferred regions, production environments, and supporting facilities, and based on their needs, analyzed the development status of the medical device industry in the surrounding areas of each region.

After comparing the evaluation results multiple times, they recommended several industrial parks with high industry compatibility.

Throughout this process, the service team accompanied Trate AG’s representatives on multiple site visits to the industrial parks, engaged in detailed discussions with government officials regarding investment plans and foreign investment requirements, and helped Trate AG resolve its site selection challenges.

Ultimately, after careful consideration, Trate AG’s management selected the Gaochun Economic Development Zone Medical Device Industrial Park as its production base in China.

It is worth noting that several other leading high-quality enterprises, including Mitchell, Neusoft Medical, Leo Electronics, and Winoc, have also found highly suitable industrial parks through the introduction of Guchuan United.

In Conclusion

In addition to hard infrastructure, soft factors such as the business environment are equally important. They are like soil, and their fertility can influence the speed of a company’s growth.

When selecting a location, companies must also consider the efficiency of local administrative approvals, as well as policies regarding land, factory buildings, and warehouses.

Site selection is a complex process that requires a comprehensive evaluation of multiple key factors. Only by doing so can a company find a “home” that truly suits its needs and thrive there.