No one expected this year to fly by so quickly.
In 2021, the industrial structures across various regions have quietly shifted. One core change is this: emerging industries are gaining momentum, niche sectors reign supreme, sharp turns demand a slowdown, and straight stretches inevitably lead to overtaking. In every industrial sector, there has never been a shortage of development opportunities or resource allocation; what is lacking is the use of a global perspective and forward-thinking vision to plan for investment promotion.As the saying goes, to plan for a county, one must have a provincial perspective; to plan for a province, one must have a national perspective; and to plan for a nation, one must have a global perspective. As 2021 draws to a close, which industrial “stars” have captured your attention the most? Which sectors serve as both key pillars of the “new economy” and represent the trends in industrial investment promotion?
01 Software and Information Technology
Expanding Horizons: Teaching People to Fish
Today, information technology provides crucial support for the transformation and upgrading of traditional industries. By leveraging information tools and industrial software to interconnect production lines, a customized, centralized operational model is formed, driving a “bottom-up” production revolution. In short, by entering from the market consumption end and aligning production with sales—combining demand with manufacturing—we can avoid the problem of “pursuing the wrong goal.”
Undoubtedly, the software and information services sector is one of the key areas in investment promotion. Within this framework, localities must intensify efforts to attract industrial, sector-specific, and embedded software, and promote the deep integration of software and information technology with real-world enterprises. Local leaders, much like athletes in a relay race, must drive the transformation and upgrading of traditional industries such as textiles, steel, and agriculture, expand diverse application scenarios, and enhance the value-adding, empowering, and intelligence-enhancing effects of the software and information industry.
02 Integrated Circuits
Close Collaboration: Interdependent and Interconnected
The integrated circuit industry is highly globalized. Current strong demand coupled with insufficient supply indicates vast room for growth, and enthusiasm for “chip manufacturing” is surging across regions—from governments and markets to enterprises. The integrated circuit sector involves numerous stages, with midstream manufacturing being the weakest link; China’s presence is virtually nonexistent on the global stage. However, this may become the direction for the development of domestically produced chips.
Is it possible for any single entity to strangle others and become irreplaceable? This is inevitably impossible. From materials, manufacturing, and packaging to final applications, every stage of the integrated circuit process is interconnected. As regions develop their integrated circuit industries, they are moving away from the “introduce-absorb-re-innovate” approach and gradually embracing a path of openness, cooperation, and alliances. It can be said that a model capable of mutual benefit is a good model; we should explore a stage of development where “we are in each other, and each other is in us.” Local governments should assist enterprises in identifying benchmarks for independent innovation, refining core technologies, and introducing private capital to boost industrial funds, thereby providing more direct support for “high-end, cutting-edge” industries.
03 Biopharmaceuticals
At the Forefront: Seize the Opportunity
Undeniably, “black swan” events have accelerated transformation in the biopharmaceutical sector, giving rise to a surge of pharmaceutical technology companies in niche markets. This demonstrates that deep specialization in specific segments can, to some extent, mitigate competitive intensity. As one of the seven strategic emerging industries, biopharmaceutical clusters have emerged in regions such as the Bohai Rim, the Yangtze River Delta, the Pearl River Delta, and central and western China. From upstream to downstream, the biopharmaceutical industry involves numerous steps in R&D and testing, with factors such as technical talent, medical equipment, and administrative approvals collectively influencing pharmaceutical companies’ site selection. Of course, no single region can offer a comprehensive set of all these conditions, so pharmaceutical companies typically weigh a range of factors when choosing a location. Today, driven by capital, policy guidance, and supporting industrial chains, the entire sector is moving toward innovation and domestic substitution. In this process, talent serves as the industry’s “moat”—reflecting not only the concentration of talent but also testing a region’s ability to attract and retain it. Only in this way can the biopharmaceutical industry enter its “golden age.”
04 Energy Storage Industry
Energy Transition: Poised for Action
Before the troops move, provisions must be secured. A wave of power outages has swept across the nation and even the globe, making energy the “provisions” of economic development—its role is self-evident. Against the backdrop of dual-control energy consumption policies and the “dual carbon” goals, the proportion of thermal power generation must inevitably be reduced. Consequently, wind and solar power are gradually becoming standard solutions for electricity demand across various industries. However, sunlight and wind are not always available.PV generation is concentrated during the day and cannot meet peak electricity demand at night. Wind power is subject to seasonal and regional variations, which limits its effectiveness to some extent. This necessitates the use of energy storage systems to store excess electricity generated during peak production periods and release it during peak consumption periods, thereby achieving the goal of “peak shaving and valley filling.” Regarding the "new energy + energy storage" development path, Shandong Province’s approach offers valuable insights. In various scenarios, local authorities should develop comprehensive plans for front-end energy storage and raise the entry thresholds for investment projects. By establishing market mechanisms and providing policy support from both short-term and long-term perspectives, they can adopt a two-pronged strategy to seize the new opportunities arising from this "transition period."
05 Defense and Military Industry
Selective Sectors: The Strong Will Grow Stronger
Driven by external pressures, the defense and military industry is entering an unprecedented period of rapid advancement. Furthermore, mixed-ownership reforms in state-owned enterprises are expected to serve as a core driver for the sector, positioning the defense and military industry to usher in a new normal of robust growth in 2022. The defense and military industry primarily encompasses six major sectors: aerospace, aviation, shipbuilding, electronics, armaments, and nuclear industry. The focus here is not on large enterprises, but rather on specialized, innovative, and distinctive small and medium-sized enterprises (SMEs). Companies like Gaode Infrared, which specializes in infrared detectors, and Jingjiawei, a GPU manufacturer, have deeply penetrated their respective niche markets while demonstrating unique innovative capabilities. Local investment promotion efforts are focusing on core basic components, electronic parts, and key materials in this sector. They are mapping out industrial landscapes across different branches, identifying leading enterprises that control the industrial chain, as well as competitive "hidden champions," and striving to attract a batch of complementary and value-enhancing projects to settle in the region.
06 New Materials
l Vast Potential, Forging Ahead
New materials form the foundation of all industries and represent one of the key strategic emerging sectors. With technological advancements and market maturation, the new materials industry is gradually permeating every sector. Currently, graphene, nanomaterials, polymers, and superconductors are among the fields with the most promising prospects. In investment promotion efforts, we identify the stages within various downstream industries that involve new materials, focusing on comprehensive tracking of raw materials, purification processes, and major equipment and machinery to pinpoint missing links in each industrial chain. Investment promoters not only demonstrate early sensitivity to potential projects but also prioritize support for intermediate stages. Activities such as material performance testing and quality control inspections—unlike upstream processes—are highly time-consuming and capital-intensive. If these stages fail to connect seamlessly, the industrial chain cannot be established.
07 Aerospace
Let the Capable Take the Lead; Unite in Common Purpose
Shenyang Aircraft Corporation, Xi’an Aircraft Industrial Corporation, Chengdu Aircraft Industry Group, Harbin Aircraft Industry Group, and China Aerospace Science and Industry Corporation… China’s aerospace industry is marked by these illustrious names. Characterized by high technology, high growth, and high potential, the aerospace sector—as a key focus of military-civilian integration—is a priority area for the accelerated cultivation and development of China’s strategic emerging industries. The aerospace industry is a high-end manufacturing sector. Upstream, it relies on a series of industries—such as manufacturing and electronics—that supply components, raw materials, and electronic technologies. Downstream, it encompasses expansion industries closely linked to transportation and communications, effectively integrating high-end manufacturing with modern services. It is not hard to imagine that this rapid development is inseparable from talent in high-end technology.In response to major investment projects, local governments are widely issuing “calls for heroes,” inviting all types of talent to “step forward” and take on these projects. They entrust these initiatives to those who truly want to work, are capable of working, and can deliver results—allowing competent leaders to “step forward” and take command.
08 Artificial Intelligence
AI-Driven Future, Within Reach
The rapid development of the artificial intelligence industry has benefited from government prioritization and supportive policies. Today, the sector has accumulated substantial depth in both the industrial chain and technological capabilities, having crossed the critical threshold of the “chicken-and-egg” dilemma. It is worth noting that a common phenomenon across provinces and cities is the scarcity of listed companies in the upstream and downstream segments; most are concentrated in the midstream, forming what is known as an “olive-shaped” structure.For regions lacking industry leaders, it is advisable to start by developing supporting industries. Once the entire industrial chain is fully established, expanding into core sectors will be much easier. Not every project involving data should automatically be classified as artificial intelligence. The key lies in the fact that the more data is analyzed, the smarter the system becomes; when applied to specific scenarios, it can fundamentally replace “manual labor.” When investment promoters are initially identifying project leads, they should remain vigilant regarding certain exploratory directions in artificial intelligence.
09 Energy Conservation and Environmental Protection
Green DNA: Sprouting Like Spring Bamboo Shoots
To strictly control the production capacity of high-energy-consumption and high-emission industries, the energy conservation and environmental protection sector has experienced rapid growth by focusing on green manufacturing, energy conservation and carbon reduction, and recycling. Among these, the environmentalization of industries represents a key trend in the sector. This approach not only emphasizes corporate indicators for pollution and energy consumption during production but also encourages key industries to proactively integrate with the energy conservation and environmental protection sector, thereby reshaping the competitive landscape.At the same time, this trend presents numerous opportunities for certain sectors, such as boiler retrofitting, desulfurization and denitrification, and dust removal. Currently, an increasing number of traditional industry giants are transitioning into the energy conservation and environmental protection sector, which is undoubtedly a sound strategic direction. This also indicates that the energy conservation and environmental protection industry holds promising prospects; appropriate competition and market entry can continuously elevate the industry’s technological standards, fostering a new landscape of diverse and thriving development.
10. Fine Chemicals
Breaking Through and Transforming: Ready to Take Off
The fine chemicals industry produces specialized chemical products. Due to their high value-added nature, low pollution, and low energy consumption, these products have become a key focus for governments worldwide and major chemical conglomerates. Local authorities are formulating detailed investment promotion plans, extensively collecting information on the fine chemicals industry and related enterprises, and intensifying efforts to identify target companies and key industry associations. They are establishing databases on the fine chemicals industrial chain to comprehensively understand the current status and trends of the industry.Through extensive on-site research, key data is accumulated to grasp industry dynamics. This facilitates the analysis of supply-demand relationships across the industrial chain and aids in investment decisions for specific projects, ultimately leading to the identification of high-quality projects that meet expectations. At present, capacity expansion is a complex challenge that the fine chemicals industry must confront as it reaches a certain stage of development, involving issues such as energy, supporting infrastructure, and transportation. Localities should increase investment in research and development to create high-value-added specialized products that meet the demands of new application areas and serve emerging downstream markets.
Stay True to Our Original Aspirations
Conclusion
As 2022 draws near, a new batch of “leading players” is set to take the stage in investment promotion… Undoubtedly, the top ten trending industries will likely guide future industrial investment strategies. However, in the short term, we must avoid setting expectations too high; otherwise, we risk ending up with “a mess.”
Frankly speaking, hot industries are like a shaken bottle of beer: while you can taste the malt, you can also see the foam floating on the surface. In this new era, what we must continue to do is move forward without forgetting our original aspirations.
