Published by ChinaMNC · Haiyan
Haiyan’s Chain-Based Investment Promotion: A Guide for Foreign Founders in China
Haiyan County in Jiaxing, Zhejiang, has built a cluster-driven investment model that turns anchor firms into magnets for suppliers. For foreign founders, this offers practical insights: align with local industry chains, leverage existing foreign enterprises, and tap into tailored support services. This article distills the key facts from an official government report and translates them into actionable guidance.
Haiyan’s Chain-Based Investment Promotion: A Guide for Foreign Founders in China
For foreign founders considering setting up operations in China, choosing the right location is about more than incentives—it’s about finding an ecosystem where your business can plug into a ready-made supply chain. Haiyan County, located on the northern shore of Hangzhou Bay in Zhejiang Province, offers a compelling case study. Its investment promotion strategy focuses on attracting anchor enterprises that then draw in their suppliers, creating a “snowball effect” that benefits newcomers. This article summarizes the key facts from a recent government report and extracts practical lessons for foreign entrepreneurs.
Remarkable Results from a Chain-Based Approach
From January to September this year, Haiyan secured 40 industrial projects each with an investment of over 100 million yuan, totaling 9.004 billion yuan. Two of these projects were valued at over 1 billion yuan (or over 100 million USD). Notably, 10 of the 40 projects—one in four—came through “business-to-business” referrals, where existing enterprises introduced their partners to the county.
This success is not accidental. The report highlights several anchor companies that have expanded repeatedly in Haiyan: Amphenol has increased its investment 10 times over nine years, bringing 22 upstream and downstream firms to the area; Danfoss has added investment 10 times over 20 years and has set up its largest production base in China there; Würth repurchased its factory earlier this year for a “second landing” and received media attention. In the nuclear medicine sector, global leader Novartis and China Isotope & Radiation Corporation have both established operations, accelerating the formation of an isotope industry cluster. Industry observers call this the “grape cluster effect.”
How Haiyan Identifies and Attracts Anchor Firms
Haiyan’s strategy is deliberate. Rather than indiscriminately welcoming any investor, the county first maps out industry chains—focusing on nuclear power-related and isotope industries, 5G electronic information, and high-end equipment—and then identifies gaps. The goal is to attract “chain leaders” that can bring their entire supply chain with them.
“Choosing the right anchor is half the battle,” says the local investment team. A poorly chosen project, even with generous policies, can result in an isolated factory. Amphenol and Novartis were not one-off deals; they came with extensive supplier networks. A representative from the Haiyan Economic Development Zone (Xitangqiao Subdistrict) explains: “Foreign companies choosing a location in China place great importance on industry alignment and will carefully examine the local supply chain.” By matching supply and demand through industry fit, the government finds chain leaders and firms find the right space to grow.
Turning Anchor Firms’ Networks into a Resource Pool
Haiyan actively converts the business networks of anchor enterprises into a local investment resource pool. Under a “chain leader + chain chief” mechanism, leading firms are invited to participate in industry assessments and identify missing links. The government provides the platform, and enterprises recommend suppliers. This shifts the investment promotion model from government-led to enterprise-led referrals.
Amphenol’s story is a prime example. In 2017, the first Amphenol company settled in Haiyan. The following year, it recommended Yongyi, and soon after, Sanpu and a high-end connector project followed. Today, Amphenol has 12 factories in the county. The high-end connector project, which began production in September 2025, is expected to generate an output value exceeding 1.9 billion yuan in its first year. Yongyi’s third factory, scheduled to start production this month, is projected to add 2 billion yuan in output value once fully operational.
Existing anchor firms also serve as the best calling card. For instance, Danish pump manufacturer Grundfos, with a 120-year history, considered Nantong and Suzhou before choosing Haiyan. Instead of leading with incentives, the local team took the CEO to visit Danfoss and other Danish companies already in Haiyan. The CEO remarked, “Our factory here will be built like Danfoss’s.” After settling in 2024, the company is expected to exceed 30 million yuan in output value by 2026, with orders booked through 2029.
Cluster Formation and Specialized Support
With anchors in place, clusters accelerate. Along Zhonggang Road in the core area of the 5G Industrial Park, nine enterprises generated 10.111 billion yuan in output value in the first half of this year, a year-on-year increase of 78.7%. In 2025, the county’s 5G communication and electronic information industry is expected to reach 22.79 billion yuan in above-scale output value, up 32.5%, forming a 30-billion-yuan cluster. In the Qinshan area, 31 isotope projects have settled, with total investment exceeding 10 billion yuan and an expected annual output value of 22 billion yuan once fully operational.
Haiyan’s project services go beyond construction and production. The “one project, one task force, full escort” mechanism ensures dedicated support. During Novartis’s recruitment, the task force responded to 184 questions within two hours and closed the loop. For Yongyi’s AI-related project, the construction period for a high-standard factory was compressed from 360 days to five months.
For the specialized isotope sector, Qinshan Subdistrict built standard factories in advance that meet nuclear medicine standards for load-bearing, radiation protection, and safety, allowing companies to “move in with their bags.” In May, two nuclear medicine firms, Qintuo Pharma and Yaohu Sukang, were the first to move into the Tongchuang standard factory. Yaohu Sukang’s CEO Gu Shengdong said that the complete nuclear industry ecosystem and upstream-downstream supporting facilities were key factors in choosing Haiyan. With a three-tier service mechanism at the provincial, municipal, and county levels, Haiyan has provided front-loaded services to over 70 nuclear medicine and isotope enterprises.
Practical Takeaways for Foreign Founders
- Choose a location with an industry chain that matches your business. Haiyan’s success shows that foreign firms prioritize supply chain readiness. Look for clusters where your suppliers and customers are already present or can be easily attracted.
- Leverage existing foreign enterprises. Anchor firms often serve as references. Visiting established foreign companies can help you assess the local ecosystem and build confidence.
- Engage with local investment teams early. Haiyan’s teams are proactive in understanding your needs and can facilitate introductions to potential partners or suppliers.
- Take advantage of tailored support services. From fast-tracked factory construction to specialized infrastructure for regulated industries, local governments may offer customized solutions.
- Consider referrals from your network. As shown by Amphenol and others, a recommendation from an existing business can open doors and streamline the process.
This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.
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