Either I’m recruiting investors, or I’m on my way to recruit them. I’m on business trips every week, traveling across most of China.

—In mid-July, an investment promotion officer posted a summary of the first half of the year on their social media feed.

Introduction

1. In the first half of the year, corporate investment became more cautious, especially among private enterprises.

2. While the national economy is recovering and showing positive trends, many investment promotion officers still feel an invisible pressure. The intensity of this pressure varies slightly depending on the region and the age of the officers.

3. Investment promotion officers who didn’t achieve good results in the first half of the year are determined to work hard in the second half.

01

In the first half of the year, private enterprises became more cautious in their investment.

From January to June 2023, national fixed-asset investment grew by 3.8% year-over-year, but private investment declined by 0.2% year-over-year, and the downward trend in profits for large-scale industrial enterprises has not been reversed.

To ensure every penny is spent wisely, an increasing number of companies are beginning to engage intermediary agencies to assist with site selection decisions.

During a site selection project in the first half of the year, Guchuan United selected over 10 industrial parks based on the investor’s requirements, collected and carefully compared the parks’ proposals, narrowed the list down to five candidates for the investor to evaluate, and then negotiated with three of these parks repeatedly to finalize the partnership.

With enterprises approaching investment with extreme caution, government investment promotion staff have had to redouble their efforts.

“If I’m not out recruiting investors, I’m on my way to do so. I’m on business trips every week, having traversed nearly half of China.” In mid-July, an investment promotion officer posted this summary of the first half of the year on their social media feed.

During the day, they rush from place to place for site visits and research; when not out and about, they hold video conferences in hotels, repeatedly reviewing experiences and analyzing projects. Amid endless chat logs, packed itineraries and flight records, and several WeChat groups with clearly defined roles, the story behind the investment promotion efforts gradually comes into focus.

He recalls that the days spent negotiating with a Fortune 500 foreign-funded enterprise were the busiest period of his career. Within a week, colleagues worked day and night to produce a thick bilingual (Chinese-English) document. It included detailed information on land prices, power supply, labor costs, and the natural environment, providing a comprehensive overview of the local resource endowments and industrial characteristics to maximize the region’s appeal to the company.

The professionalism of investment promotion and negotiation has now spread from first-tier cities to the district, county, and even town and street levels.

An investment promotion officer based in Shenzhen noted that government agencies coming to Shenzhen to register and seek projects range from first-tier to fourth-tier cities, including districts, counties, and even sub-districts—and every one of them comes well-prepared. Even a remote small county’s investment proposal is highly professional and meticulous, in no way inferior to those from Beijing, Shanghai, or Guangzhou.

Most leading enterprises or rapidly growing companies have firsthand experience with this “intensified competition” in investment promotion. The head of a Shenzhen-based machinery and equipment company planning to expand production has personally witnessed the head-to-head competition among government investment promotion services.

Upon learning of the company’s expansion plans, local governments in the surrounding areas rushed to extend olive branches. The company not only received detailed investment proposals from Dongguan, Huizhou, Foshan, and other locations, but officials from other provinces and city leaders even paid personal visits to invite the company for site inspections, offering attractive incentives such as preferential land prices and financial subsidies.

The caliber of leadership, the sincerity of the investment offers, and the business environment—these key factors that drive project implementation—actually serve as a protective wall built brick by brick to bolster the company’s confidence.

This year, CATL’s subsidiary, Bangpu Recycling, invested over 20 billion yuan in Foshan’s Sanshui District to build a new materials industrial project—marking the company’s fourth capital increase in the region.

According to the company’s president, when Bangpu Recycling first settled in Sanshui, Foshan in 2016, the project required significant power and needed to come online urgently. However, the industrial park was already densely populated with enterprises, leading to tight power supply. The municipal, district, and town authorities actively coordinated with the power supply department, ultimately allocating seven dedicated power lines with a total capacity of 40,000 kVA.

These customized services resolved the company’s urgent needs and boosted its confidence. However, most investment promotion staff generally feel that corporate decision-making cycles have become longer.

To alleviate entrepreneurs’ concerns, in addition to continuing to strengthen the service mindset of investment promotion staff, pragmatic policy measures must also be implemented in a timely manner. However, before introducing policies, it is essential to identify the root causes.

Just like the business philosophy of private enterprises, private investment prefers substance over empty promises. Breakthroughs are what matter. Without them, even the most numerous policies are merely window dressing.

02

The 5.5% GDP growth in the first half of the year was hard-won.

Fu Linghui, a spokesperson for the National Bureau of Statistics, described the challenges facing China’s economy as follows: the global political and economic landscape remains complex and volatile, and the foundation for sustained economic recovery and development within the country is still fragile.

However, reactions to today’s GDP data vary widely.

In the elevator lobby of an office building in Tianjin, one employee opened a news app and said, “Second-quarter growth was 6.3%”; another replied, “Was it really that high?”

While the national economy is recovering and showing positive trends, many business development professionals still feel an invisible pressure.

It has become harder to identify new projects. Many companies have put their investment plans from the beginning of the year on hold, and the tendency to “keep a tight grip on the purse strings” remains evident.

Projects on the verge of signing always fall just short; even after analyzing and reviewing them multiple times, it’s hard to pinpoint exactly where things went wrong.

Even the topics of conversation over drinks with friends have shifted—from “how to make more money” to “living in the moment.”

Investment promotion professionals in different regions and of different ages may experience this in slightly different ways.

Investment promotion officers in central and western regions, particularly in less economically developed areas, may feel this pressure more acutely. Due to sluggish consumer demand, companies have less incentive than in the past to relocate to or expand their markets in these regions.

Investment promotion officers in the eastern regions feel more optimistic. Although the task of stabilizing foreign investment is daunting, as gateways to openness, the Pearl River Delta and major cities in the Greater Bay Area remain the top investment destinations for many companies looking to expand their business.

Younger investment promotion officers feel this pressure more acutely. Although the national urban surveyed unemployment rate has fallen to 5.3%, the rate for those aged 16–24 stands at 21.3%.

Compared to peers facing layoffs and having to endure the sweltering heat to go from one job interview to another, the challenge of last-place elimination brought about by the “Management Committee + Company” reform may not be as brutal as imagined.

According to statistics from multiple institutions, young people’s desire to join state-owned enterprises and public institutions has reached a new high; they seek a more certain future.

Although investment promotion work is hard and tiring, it clearly offers more security. The process of communicating with entrepreneurs across various industries is indeed more rewarding than tightening screws.

03

Investment promotion officers who failed to achieve good results in the first half of the year are determined to give it their all in the second half.

A grassroots investment promotion officer in central China, who was named an outstanding individual in 2022 after securing 14 projects worth over 100 million yuan each, came up empty-handed in the first half of this year. For the second half, his goal is to “follow up on every project with full force, regardless of the investment amount.”

However, to restart business negotiations with companies, one certainly cannot simply wait for them to show goodwill. Investment promotion officers must identify the companies’ latest needs or secure new bargaining chips to attract them back to the negotiating table.

June’s economic data showed signs of recovery, and the National Bureau of Statistics described the current economic situation as “recovering and improving.”

At the core of the overall policy direction remains: stabilizing growth and safeguarding employment. These two priorities are not only essential for resolving most issues but are also closely tied to the well-being of the general public.

As the key to achieving these two goals, infrastructure investment has maintained strong momentum. You have surely noticed the frequent “groundbreaking ceremonies for major projects” being held across the country. However, infrastructure development is not without its pressures. Investment promotion officials within the system have clearly felt the strain on local governments’ fiscal expenditures—while tax and fee reductions continue unabated, land revenue continues to shrink.

Although their available resources are limited, local governments must still shoulder the main responsibility to boost confidence. While some measures may seem somewhat “radical,” many policies have successfully stabilized economic growth and stimulated corporate vitality.

In Foshan, facing the expansion needs of Xingyuan Materials—the “chain leader” in the lithium battery separator sector—state-owned enterprises at both the municipal and district levels swiftly invested to take a stake with a 40% fixed-asset investment ratio, securing a project worth tens of billions of yuan.

In Suzhou, the “Regulations on Promoting Scientific and Technological Innovation,” which took effect on July 1, raised the distribution ratio of revenue from the commercialization of scientific and technological achievements by universities and research institutes funded by public finances from no less than 70% to no less than 80%—the highest in the province and a national leader.

At the same time, we have observed significant disparities among different enterprises. While upstream enterprises are growing rapidly, mid- and downstream enterprises are under immense pressure; large enterprises receive substantial support, yet the business sentiment index for small and medium-sized enterprises (SMEs) hovers near a critical threshold; and the recovery of the service sector has not been as robust as anticipated.

In the second half of the year, it will be particularly important to ensure that mid- and downstream enterprises and SMEs—which account for half of the market—can thrive.

These enterprises impact more than just tax revenue and employment; in every aspect of daily life, they are the primary forces directly involved in the supply of services and goods. A breakfast shop that whets one’s appetite, or a murder mystery game venue with a unique atmosphere—while their closure might not lead to any “shortage” of supply, it inevitably leaves people feeling as though they have lost a little bit of joy.

However, if tens of thousands—or even hundreds of millions—of people lose that little bit of joy, it will undoubtedly pose a significant obstacle to the ongoing strategy of “expanding domestic demand and boosting consumption.”

While the efforts of business development staff cannot directly transform these enterprises from saplings into towering trees, every act of careful nurturing adds a measure of resilience to help them weather the storms.

As we move into the second half of the year, these saplings will face many pressures and challenges.

Yet, as Fu Linghui stated: “With improvements in employment, increases in household income, the gradual strengthening of domestic demand, the optimization of the supply structure, and the growth of new drivers of growth, the economy will recover steadily, and the quality of development will continue to improve. Therefore, we are fully confident, well-equipped, and capable of achieving the annual targets and tasks for economic and social development.”