China advances inter-regional industrial transfer amid high-quality development

XI'AN -- No longer a migrant worker, Chen Guofei, 27, found a job at a photoelectric device manufacturer last year in his hometown of Ankang City, northwest China's Shaanxi Province.

"I can't keep drifting now that I'm married and have my parents at home to look after. Ankang's recent development has created new job opportunities, which is good news for those of us who used to work far away from home," said Chen.

The company he works for, the Shaanxi Xuan Yi Photoelectric Technology Co., Ltd., serves as a prime example of China's ongoing efforts to step up inter-regional industrial transfer and optimize industrial layout. Originally established in Dongguan, a manufacturing hub in south China's Guangdong Province, the company relocated its manufacturing operations to Ankang in 2019.

Over the past four years, the company has played a pivotal role in the city's consumer electronics industrial chain. In 2023, its output value surged to 210 million yuan (about 25.60 million U.S. dollars), generating over 500 jobs.

As an inland city south of the Qinling Mountains, Ankang faces challenges in terms of transport and market conditions compared to the traditional production bases along China's southeast coast. Nevertheless, the city offers advantages for labor-intensive industries due to its relatively low operating costs and policy incentives.

According to Gao Yadan, deputy general manager of Xuan Yi Photoelectric Technology, over 80 percent of the company's employees work on the assembly line, with labor cost savings being one of the primary motivations for relocating inland.

"The new industrial chain is much less susceptible to time and space," said Gao. "Our company is willing to move wherever the combination of production factors is optimal."

Ankang also offers subsidies for factory renovation, tax and fee reductions, financial support for key projects, and accommodations for technical specialists, among other beneficiary policies.

Gradual improvements to transportation infrastructure have created a more favorable business environment. The Xi'an-Chongqing High-speed Railway, which is currently under construction, passes through Ankang and will cut travel time between Ankang and Xi'an to under one hour upon completion.

Xi'an, the provincial capital of Shaanxi, has emerged as a major hub for China-Europe freight trains, operating 17 international routes.

In just one year of development, a newly established textile and garment industrial park in Ankang has already attracted 29 companies, generating over 2,500 job opportunities. The park aims to become the largest industrial chain base in western China and hopes to attract more companies from coastal regions to establish operations there.

Lu Xuemei, a mother of two, found employment at a textile company within the park last June after working for over a decade in Zhejiang Province in east China.

"Now I can spend more time with my kids and take better care of them," said Lu, expressing satisfaction with her current life.

In southwest China's Chongqing Municipality, the Wankai new materials technology co., ltd. stands as a premiere food-grade PET production enterprise with an annual production capacity of 1.2 million tonnes of PET bottle chips. Headquartered in Zhejiang, the company settled in the Three Gorges Reservoir area just three years ago and has achieved an annual revenue of more than 10 billion yuan.

According to Zang Honghui, the rotating general manager of the company, Chongqing's advantages in water transportation, power supply, and labor resources are highly valued by the company.

Furthermore, the cost of producing one tonne of PET in Chongqing is over 100 yuan lower compared to the eastern regions. "Such a significant cost reduction is highly attractive to the company," emphasized Zang.

In recent years, China has issued a series of guidelines to promote industrial transfer. The 14th Five-Year Plan (2021-2025) delineates strategies for optimizing regional industrial chain layouts, ensuring key links of industrial chains remain domestic, and bolstering the capacity of central, western, and northeastern regions to undertake industrial transfer.

This year's government work report also noted that China will boost the capacity of these regions for absorbing relocated industries.

According to Wu Gang, a researcher at the Shaanxi Academy of Social Sciences, industrial transfer from the coastal east to the inland west is an inevitable trend under China's ongoing industrial restructuring aimed at generating high-quality development.

"This presents a win-win situation for both regions," said Wu. "For the eastern regions, it allows for more land to be freed up for industrial upgrade, while for the western regions, undertaking industrial transfer can leverage advantages such as lower labor and land costs, thereby driving regional economic growth."

This will also enhance the dynamics of the dual circulation of domestic and international markets, accelerate the development of a modern industrial system and regional coordinated development," added Wu.