Against the backdrop of urban development, constraints such as limited land resources and rising land costs are becoming increasingly apparent. At the same time, as the manufacturing sector reaches a certain stage of development, issues such as insufficient industrial land development and low utilization rates have emerged.

Consequently, this has given rise to a new model of industrial development—vertical industrialization—which has attracted the attention of local governments. To alleviate the current tension between economic growth and land scarcity, these governments have introduced relevant policies specifically targeting "vertical industrialization."

1. What is "Industrial Upward Expansion," and how did it come about?

Simply put , “industrial verticalization” refers to companies conducting industrial production within high-rise buildings, rather than in the traditional, single-story factory buildings spread out on the ground as commonly imagined.

While "industry in high-rises" significantly improves the efficiency of industrial space utilization, it is also constrained by factors such as the load-bearing capacity of high-rise buildings. Consequently, the enterprises that move into these buildings are generally those in high-end manufacturing sectors with relatively light production equipment and minimal noise and pollution during the production process.

In the late 1950s, Hong Kong’s light industry developed rapidly and gradually occupied vast amounts of land. To facilitate standardized management, the Hong Kong government decided to construct industrial buildings and implement a “vertical layout” for manufacturing, completing the first industrial building in the Cheung Sha Wan area of Kowloon in 1957.

In contrast, the Pearl River Delta region, which followed Hong Kong’s lead, initially continued to pursue industrial production along traditional paths. Under the “three-comes-one-processing” industrial division of labor system, haphazard factories sprang up everywhere.Unplanned manufacturing enterprises sprang up like bamboo shoots after rain. While this significantly boosted local economic development, it also fostered an extensive production model characterized by “every village lighting a fire, every household emitting smoke,” and led to the construction of many “garden-style” factories featuring large-scale landscaped grounds.

This situation not only resulted in a haphazard distribution of industrial enterprises, making it difficult for the government to effectively plan and manage them, but also prevented land resources from being fully utilized.

To conserve land, tap into the potential of industrial facilities, and achieve sustainable development, Guangdong issued a formal ban on “garden-style” factories in 2005 and encouraged the construction of multi-story factory buildings. Tight land resources and rising land costs have forced manufacturing enterprises in the Pearl River Delta region to undertake a “vertical expansion revolution.”

In 2019, the *Shenzhen Bao’an District Guidelines for Industrial Vertical Development (Trial)* sparked a wave of industry-wide discussion on “industrial vertical development.” It provided design standards and operational guidelines for this model, prioritizing the relocation of strategic emerging industries—including but not limited to light manufacturing enterprises in next-generation information technology, biopharmaceuticals, high-end manufacturing, and smart materials—among enterprises meeting the vertical development criteria.

2. Which industries are suitable for moving into high-rise buildings, and what new requirements are there for factory facilities?

The primary reason enterprises struggle to relocate to upper floors is that production processes such as injection molding, stamping, extrusion, and metal die-cutting require large, heavy production equipment. Additionally, these processes must be located on the ground floor, primarily affecting industries such as mechanical equipment, electronics, hardware, and robotics. Secondly, industries like packaging and functional materials also involve large-scale production equipment; in some cases, environmental regulations require the installation of pipelines, necessitating the placement of production processes on the ground floor.

Generally, machinery manufacturing enterprises (such as home appliances, furniture, electronics, robotics, and hardware) can occupy up to the 6th floor, while labor-intensive industries (such as apparel and footwear) or knowledge-intensive industries (such as pharmaceuticals) can occupy up to the 8th floor.

New Requirements for Factory Buildings

Ground Floor Ceiling Height: Determined by Industry

For the packaging, printing, and functional materials industries, due to the unique specifications of their equipment, the first-floor ceiling height must be no less than 12 meters. For the machinery and equipment industry, due to the height of the equipment, the first-floor ceiling height must be no less than 10 meters.

Floor Load Capacity: Adjusted as Needed

For industries such as machinery and equipment, home appliances, robotics, packaging and printing, and hardware, the ground floor floor load capacity must be 2 tons per square meter; for other industries, the standard is generally 1.5 tons per square meter or less.

Sterile and Dust-Free Environments: Implemented with Precision

Industries such as biopharmaceuticals, printing inks, and electronic films generally cannot be housed in the same building as production spaces for other industries. These sectors not only prohibit businesses on adjacent floors that generate significant vibrations but also require production spaces to be cleanrooms to ensure product precision.

3. What policy support is available for industrial relocation to upper floors, and where is it located?

Shenzhen

In July 2019, Bao’an District in Shenzhen took the lead in issuing China’s first detailed operational guideline for “industrial relocation to high-rise buildings,” titled *Shenzhen Bao’an District Guidelines for Industrial Relocation to High-Rise Buildings (Trial)*. The guideline explicitly defines “industrial relocation to high-rise buildings” as “high-rise factory buildings with a height exceeding 24 meters but not exceeding 100 meters.” It serves as a practical implementation manual covering requirements for industrial layout, building standards, design considerations, and fire safety management.

Suzhou

In September 2019, the Suzhou Industrial Park released the *Action Plan for Optimizing the Business Environment in the Suzhou Industrial Park*. Among the nine measures outlined in the plan, it explicitly calls for “improving the efficiency of land and building use. Encouraging the development of underground (and above-ground) space to maximize the level of land conservation and intensive use. Encouraging industrial vertical development to increase the floor area ratio of industrial land.”

Qingdao

In December 2019, Chengyang District, Qingdao, issued a notice regarding the "Implementation Opinions on Accelerating the Economic Development of High-Rise Industrial Buildings in Chengyang District." The Implementation Opinions stipulate that "high-rise industrial buildings (industrial complexes) must occupy a land area of at least 30 mu or have a total floor area of at least 50,000 square meters; contiguous development of 50 mu or more is encouraged; the floor area ratio should generally be around 3.0, with a minimum of no less than 2.5."The Implementation Opinions clearly define the industrial orientation of “moving industry into high-rise buildings,” the entities responsible for development, operation, and investment, basic requirements for development and construction, the proportion of self-held space, and requirements for subdivision and transfer.

Foshan

In early 2019, the “Leping Town, Sanshui District, Foshan City ‘Industry in High-Rise Buildings’ Support Measures (Trial)” (hereinafter referred to as the “Measures”) were issued. The main content of this policy concerns the definition requirements and incentive measures for “Industry in High-Rise Buildings” construction projects.The “Industrial Upward Expansion” construction projects referred to in the “Measures” must fully meet the requirements of “six or more stories, a construction area of 30,000 square meters or more, a floor-to-ceiling height of 4.3 meters or more, and a load-bearing capacity of 0.75 tons per square meter.” The policy also encourages smart upgrades, headquarters economy development, capital increases and production expansions in key industries, and the establishment of foreign-invested projects.

Dongguan

In May 2019, Dongguan issued its "Document No. 1," titled "Several Opinions on Expanding and Optimizing Urban Development Space to Accelerate High-Quality Development." This document identified "expanding and optimizing urban development space" as a strategic pillar for Dongguan’s pursuit of high-quality development and proposed measures such as "developing and constructing high-standard factories and industrial buildings" under the "Implementation Pathways" section. Expanding upward and promoting land use intensification have become the inevitable path for Dongguan to optimize its industrial structure, advance industrial upgrading and transformation, and pursue high-quality development.

Conclusion

Over the past decade or so, it has become evident that “industry going vertical”—as an innovative model for industrial space—is gradually gaining traction. In developed cities such as Beijing, Shanghai, and Guangzhou, as well as in the Yangtze River Delta and Pearl River Delta regions, where land use is already highly intensive, even higher demands will be placed on the efficiency of industrial land in the future.