The electronic information industry is a strategic, foundational, and pioneering pillar of the national economy. It is not only highly pervasive but also exerts a significant driving force, playing a vital role in advancing smart manufacturing.

Currently, China’s electronic information industry is at a historic juncture of transformation and reshaping of its supply and ecosystem chains: next-generation information technologies, represented by 5G, are driving industrial chain upgrades, while U.S.-China trade frictions are reshaping the global industrial landscape.

It is foreseeable that for a long time to come, the development of China’s electronic information industry will follow this trajectory.

Over the years, GuChuan United has continuously facilitated the establishment of a series of electronic information enterprises across various regions, and has been fortunate to promote the orderly transfer and clustering of the industry. Through practical experience, our investment promotion team has conducted in-depth research on the industry and gained a solid understanding of its development trends.

Actively Facilitating the Relocation of the Electronic Information Industry

Central and Western Regions Entering a New Normal

China’s electronic information industry supply chain is shifting from “labor-intensive” to “capital- and technology-intensive,” with a trend of moving from the eastern regions to the southeastern coastal areas, and then to the central and western regions as well as Vietnam.

Currently, central and western regions are actively absorbing this industrial shift, and a new development pattern centered on key cities such as Chengdu, Chongqing, Wuhan, Changsha, and Hefei is gradually taking shape.

Taking Chengdu as an example, from 2008 to 2020, the scale of Chengdu’s electronic information industry achieved a leapfrog development from 100 billion to 1 trillion yuan over the course of 12 years, consistently ranking first among cities in the central and western regions.

In the past two years, Guchuan United has successively introduced electronic information enterprises such as Fuhuan Microelectronics, Yadex, Hongsheng Electronics, Jiajiatong, Jiaqishi, Dongzheng Optics, Dimang Technology, and Fucheng Microelectronics to Chengdu, assisting the local area in expanding and strengthening its electronic information industry.

Fuhuan Microelectronics specializes in video-centric chip design and development and is a gazelle enterprise in the AI smart chip sector. This high-tech enterprise not only facilitates the relocation of labor-intensive industries but also drives the electronic information industry’s value chain toward high-end segments.

▲ In 2021, GuChuan United assisted Lushengda Industrial Co., Ltd. in establishing operations in the Louxing Industrial Park of Loudi City. Once the project is fully operational, its annual output value is expected to reach 2 billion yuan.

Lushengda Industrial, which has established operations in Loudi City, Hunan, is another representative case of GuChuan United’s efforts to promote the relocation of the electronic information industry to central and western China. This initiative holds significant importance for the local area in building an electronic information industrial chain, stimulating industrial agglomeration effects, and achieving high-quality development.

The electronic information industry clusters in the Beijing-Tianjin-Hebei, Yangtze River Delta, and Pearl River Delta regions continue to exert a powerful pull on technology and talent.

With the promotion of GuChuan United, electronic information enterprises such as Visteon (U.S.), Srix (U.K.), Caplin Optoelectronics, and Donghang Optoelectronics have chosen to establish operations here, driving the electronic information industry toward further development as a “technology-intensive and high-value-added sector.”

Global Industrial Chains Are Accelerating Their Restructuring

The Electronic Information Industry Faces Severe Challenges

From the perspective of global industrial distribution, developed economies such as the United States, Europe, and Japan remain dominant in the electronic information industry, continuing to maintain their advantages in technology R&D and product design.

Emerging economies such as China, India, and Southeast Asia, relying on continuous improvements in production capacity and technological expertise, are gradually upgrading from the low-end to the high-end segments of the electronic information industry chain.

The global electronics and information technology industry

is gradually taking on a pattern of value chain division of labor

• The United States holds a leading global position in cloud computing, internet services, software, and semiconductors;

• Japan and South Korea specialize in electronic components and semiconductors, with Japan focusing on electronic components and South Korea on semiconductors;

• Taiwan, China, focuses primarily on semiconductor foundry services and electronic components;

• Mainland China focuses primarily on telecommunications equipment, electronic components, and internet services;

• Vietnam and India handle some assembly and component manufacturing.

China’s electronics and information technology market is the largest in the world

but its value-added remains at a relatively low level

Since 2014, driven by both policy and capital, China’s electronics industry has developed rapidly, achieving continuous breakthroughs in high-end electronics manufacturing and semiconductors.

As China’s electronics and information technology industry as a whole is positioned in the middle and lower segments of the industrial chain—where value-added is low—domestic manufacturers are primarily labor-intensive, with most products having low value-added, resulting in relatively low overall industry profit margins. According to statistics from the China Electronics Information Industry Federation, the average profit margin for China’s electronics and information technology manufacturing sector (for enterprises above a certain scale) was approximately 4.40% in 2019.

The restructuring of the electronics and information industry chain has already begun

Currently, a global technological revolution and industrial transformation centered on the electronics and information industry is sweeping the world.

Although Sino-U.S. trade tensions have eased somewhat, the United States has not relaxed its restrictions on China’s high-end manufacturing sectors, such as semiconductors and artificial intelligence. Coupled with China’s demographic dividend, labor costs, and business and demand dynamics, some foreign enterprises have chosen to relocate their factories to Southeast Asian countries with lower production factor costs, such as Vietnam and Thailand.

U.S. export restrictions on critical materials and core components for China may result in China losing its competitive edge in contract manufacturing. Over the next decade, China’s electronic information industry will continue to evolve into a “technology-intensive and high-value-added sector.”

Seizing Opportunities in “New Infrastructure”

Driving the Electronics and Information Industry Toward High-End Development

At the end of 2021, the Central Economic Work Conference proposed “moderately advancing infrastructure construction.” From a medium- to long-term perspective, moderately advancing infrastructure construction is an objective requirement for developing the digital economy.

Unlike traditional infrastructure development, the vigorous development of the digital economy—centered on new infrastructure—represents the future trend of global industrial development. Laying a solid foundation will help shape the development landscape.

It is not difficult to foresee that the significant opportunities presented by new infrastructure will bring vast market potential and development prospects to the electronic information industry.

For local governments, attracting high-quality projects that align with regional leading industries is the primary goal of investment promotion; enterprises are also becoming increasingly cautious in their decisions regarding site selection and investment, requiring a systematic evaluation of factors such as policies, markets, and talent.

With 12 years of deep expertise in investment promotion, Guchuan United has earned the mutual trust of both government and business sectors through its accurate grasp of industry trends. Over the years, Guchuan United has consistently facilitated the establishment of domestic and international electronic information enterprises in regions best suited for their development, which serves as a testament to this.

Moving forward, GuChuan Alliance will approach investment promotion with groundbreaking innovative thinking to foster industrial chain clustering, accelerate the commercialization and implementation of research outcomes, and propel China’s electronic information industry toward high-end development.