Other BriefingsWhere to Invest in China in the Next Five Years – Analysing Four Priority High-Tech Sectors
This article explores emerging industry investment opportunities in China across four priority sectors highlighted in provincial 15th Five-Year Plans: green hydrogen, embodied AI, semiconductors, and biomanufacturing. It breaks down where each industry is developing fastest and what foreign investors should know before entering.
The 15th Five-Year Plans of China’s 31 mainland provinces, autonomous regions, and municipalities (hereinafter collectively referred to as “provinces”) converge on a set of priority and strategic industries for the country’s industrial development in the period from 2026 to 2030. In this second article of our two-part series on the industrial priorities of China’s provincial governments over the 15th FYP period, we take a closer look at four emerging sectors highlighted in the provincial plans with investment potential: green hydrogen, embodied AI, semiconductors, and biomanufacturing.
Read Part 1 here: Where to Invest in China in the Next Five Years – Breaking Down Priority Industries by Province
Green hydrogen
China is developing its hydrogen industry to support its carbon neutrality goals, strengthen energy security, and reduce reliance on fossil fuels. Hydrogen, particularly green hydrogen produced using renewable energy, is viewed as a key technology for decarbonising hard-to-abate sectors such as steel, chemicals, shipping, and heavy transport, while supporting the country’s broader transition to a low-carbon economy.
Where to invest
With all 31 mainland Chinese provinces mentioning hydrogen energy in some capacity, it can be difficult to ascertain where the industry is truly developing. However, a handful of provinces have highlighted it as a top priority and detailed more concrete tasks and timelines for the sector’s development.
For green hydrogen, potential lies particularly in areas with rich green energy resources, such as wind and solar, as well as access to viable industry applications. Northeast China – Liaoning, Jilin, and Heilongjiang – therefore has a particularly heavy focus on the sector, with the region’s mature industrial infrastructure, expansive green energy resources, and direct access to commercial applications in petrochemical industries and the maritime shipping industry helping to anchor the industry’s potential. Tianjin, with its strong port infrastructure and vicinity to the northeastern producer provinces, is similarly well-positioned for application in the maritime sector.
| Province | Focus Areas |
| Tianjin | Hydrogen production, storage, transport, refueling, utilisation; leverages local university strengths in new energy and storage R&D |
| Hebei | Core hydrogen equipment manufacturing base; large-scale renewable electrolysis hydrogen production; multi-scenario applications |
| Jilin | Changchun as R&D/equipment/testing core; western Baicheng-Songyuan-Siping belt for wind/solar-to-hydrogen production; central Changchun-Jilin-Liaoyuan belt for application; zoned into green liquid fuel, clean energy, and hydrogen-carbon-neutrality zones
Target of green hydrogen production capacity of 800,000 tons/year by 2030, with a goal of 1 million tons/year |
| Heilongjiang | R&D on fuel cells, multi-energy complementary tech, hydrogen equipment; developing fuel cell gas turbines, safety analysis software, PTFE coatings; exploring non-electric uses (e.g. hydrogen-based sustainable fuels, related pipelines)
Target of 1 million tons/year of green hydrogen production/year by 2030 |
| Liaoning | Green hydrogen applications in highway/transport scenarios; full-chain “production-storage-transport-refueling-application” demonstration; green hydrogen/ammonia energy center; new Chifeng–Jinzhou green hydrogen (ammonia/methanol) pipeline.
Dalian positioned as a Northeast Asia green marine fuel bunkering/transshipment hub |
| Anhui | Core technology and commercialisation push: low-cost water electrolysis, hydrogen purification/separation, storage equipment, fuel cells; applications across transportation, power, and industry; full-chain build-out |
| Ningxia | Regional pilot projects in Ningdong Energy and Chemical Base, Yinchuan, and Wuzhong; Ningdong Renewable Hydrogen Carbon Emission Reduction Zone pilot; scaling new-energy-based hydrogen production |
Considerations for foreign investors
Hydrogen energy, and in particular green hydrogen, is still a relatively high-risk, early-stage industry, so investment is likely to be concentrated in research and development (R&D), demonstration projects, and application testing rather than large-scale production and industrial deployment at this stage.
Companies in the shipping and logistics industries may also launch pilot green hydrogen bunkering programmes and trial the use of hydrogen-powered vessels and port infrastructure before committing to widespread commercial adoption. These pilot projects will help assess the technical feasibility, safety, costs, and operational performance of green hydrogen within real-world transport and logistics networks.
Embodied AI and humanoid robots
China’s embodied AI and humanoid robot market has taken off in recent years thanks to breakthroughs in AI and generative models, such as ChatGPT and DeepSeek, as well as major improvements in perception, dexterity, and power efficiency that make human-like mechanics viable and applicable for real-world use.
Government support for the industry, in addition to its potential as a new growth driver, is informed by long-term demographic decline that is leading to a shrinking workforce, rising labour costs, and a rapidly ageing population, threatening the future labour market. Humanoid robots and embodied AI are therefore being positioned as a possible solution for automation in manufacturing, logistics, and elder care, among other sectors.
Where to invest
The embodied AI and humanoid robot sectors are fairly evenly distributed across provinces, although there is notably less focus on them in Western provinces.
The focus of development is in many cases closely tailored to local strengths. For instance, Tianjin leans on university R&D and port logistics, Heilongjiang targets manufacturing applications, Shanxi targets the development of mining-specific robots, Guangxi positions around ASEAN-facing cooperation, and Guangdong leverages its tech ecosystem to push more complex, full-modal models.
At the same time, nearly all provinces outline aims of developing general-purpose humanoid robots and robots for application in public services such as elder care.
| Province | Focus Areas |
| Tianjin | Multimodal perception, intelligent algorithms, motion control; humanoid robot core components and whole-machine R&D/manufacturing; applications in port logistics, industry, elder care |
| Heilongjiang | Embodied AI core (dexterous hands, rotary joints, six-axis force sensors), human-machine interaction, environment perception, whole-body motion control; large-scale training grounds; applications in manufacturing and public services |
| Hebei | Attracting Beijing/Tianjin talent and firms; joint R&D on perception-decision, motion control, embodied coordination, corpus/data, autonomous OS; public service platforms (compute, training, pilot testing, investment, leasing); applications in industrial manufacturing, healthcare, domestic services |
| Shanxi | Mining-scenario robots (rail inspection, explosion-proof); applications in manufacturing, services, education, tourism |
| Zhejiang | Trillion-yuan industry cluster spanning chips, large models, agents, and application services; embodied AI and smart driving as core pillars; target of RMB 1.2 trillion in above-scale AI core industry revenue by 2030 |
| Guangdong | Full-modal perception (vision, hearing, touch, force), embodied large models, general-purpose robotics; province-wide training ground system; applications in logistics/warehousing, manufacturing, home services, healthcare, research; robotics R&D/manufacturing clusters in Shenzhen, Foshan, Dongguan, Guangzhou |
| Guangxi | Humanoid, industrial, service, and special-purpose robots; core components (controllers, dexterous hands, sensors, reducers, lead screws, end effectors); embodied AI systems integrators; ASEAN-facing R&D and standards cooperation |
Considerations for foreign investors
Given the scope of possibilities within this sector, there are myriad opportunities for investors in China’s embodied AI and humanoid robot market. However, there will be stiff competition from local companies, with many of China’s largest technology firms investing in the field and numerous new domestic start-ups entering the market.
Being an emerging industry, there has been limited proof of end-use applications and the commercial viability of many products. As a result, numerous market niches are still in the R&D phase, creating uncertainty but also significant potential for future growth.
The high level of specialisation across different provinces means that foreign investors will nonetheless have a wide range of opportunities depending on their industry niche. In addition, the broad range of potential applications means that new market niches continue to emerge, allowing innovative foreign firms to differentiate themselves and establish a competitive advantage despite the intense local competition.
Semiconductors & ICs
China’s ambitions for technological self-sufficiency are highly dependent on its ability to produce enough chips and advance its high-end chip development to keep up with the pace of technological development, in particular AI, where compute capacity has become a direct constraint on innovation and national competitiveness.
China still relies on imports for advanced lithography equipment and high-end logic and memory chips, particularly at leading-edge nodes, leaving the country exposed to export controls and supply chain disruption even as domestic capacity improves.
Where to invest
Semiconductors, ICs, and chips, in terms of direct development, are mentioned in 28 out of 31 plans, although focus and niches vary considerably by province. That said, industry specialisation is spread across different provinces, with, broadly, Shanghai and Guangdong specialising in design and high-end manufacturing, Beijing, Anhui, and Guangdong focusing on memory and advanced packaging, Shandong, Shaanxi, and Guangdong building out wide-bandgap and compound semiconductors, and Hunan and Shaanxi targeting niche applications like automotive-grade chips and photonics.
| Province | Focus Areas |
| Beijing | Mature process refinement, advanced process manufacturing, key equipment/materials/components, high-performance processors and high-density memory, wide-bandgap and ultra-wide-bandgap semiconductors (gallium oxide, diamond), 3D integration, photonic-electronic fusion |
| Shanghai | Advanced IC design and manufacturing; one of three pioneering industries, anchored by a Zhangjiang-Lingang-Jiading innovation cluster aiming to be a world-class IC hub |
| Shandong | Ultra-wide-bandgap semiconductors, power semiconductor devices, new display materials, carbon-based semiconductors; large-scale projects spanning wafer fab expansion, photomasks, large silicon wafers, SiC substrates, advanced packaging, AI chip design, and high-frequency materials |
| Hunan | Automotive- and aerospace-grade chips, key materials and core production equipment, EDA tool adoption, full design-manufacturing-packaging/testing-application chain |
| Guangdong | Chips for AI and smart manufacturing, compound semiconductors, optical chips, AI chips, high-bandwidth memory, advanced packaging, RISC-V, SiC/GaN materials, lithography equipment and photoresist |
| Shaanxi | Full IC chain upgrade (design, manufacturing, packaging/testing), wide-bandgap materials, photonics (photon manufacturing, photonic chips/materials/sensing) |
| Anhui | Memory, advanced packaging, lithography masks, new semiconductor materials, chiplets/3D integration, compute-in-memory and 3D DRAM architectures, new memory types, silicon photonics, quantum and neuromorphic chips |
Considerations for investors
China still has an acute need for foreign technology and expertise in key areas of the semiconductor value chain. Reflecting this, the Catalogue of Encouraged Industries for Foreign Investment specifically encourages foreign investment in advanced semiconductor activities, including IC design, manufacturing of 28nm and below digital ICs, analogue and mixed-signal ICs, MEMS and compound semiconductors, advanced semiconductor packaging and testing, as well as semiconductor equipment and key component manufacturing.
It is important to note that as semiconductors are strategically sensitive, the industry is and has been highly susceptible to geopolitical tensions and government intervention. Export controls, investment screening, and technology restrictions, such as those arising from US-China tech competition, create significant regulatory and political risks for foreign investors.
As a result, foreign investors are advised to carefully assess export control exposure and licensing requirements before committing capital, particularly for technologies with dual-use or military applications, and to consider prioritising lower-risk segments such as materials, equipment components, and packaging where appropriate.
Biomanufacturing
China’s biomanufacturing industry is entering a decisive moment, moving from a niche segment within biotechnology to a strategic pillar of the country’s next phase of industrial upgrading, backed by national policy, accelerating regional cluster development, and rising demand for bio-based materials and sustainable production.
Biomanufacturing is being positioned as core to China’s dual-carbon and ecological-civilisation agenda, seen as key to cutting resource intensity and building long-term economic resilience, with fast growth expected particularly in agriculture and healthcare. The national 15th FYP reflects this, calling for breakthroughs in enzyme preparations, germplasm design, and smart fermentation, alongside advances in bio-breeding, biochemicals, biopharma, bioenergy, and cell/gene therapies, antibody and nucleic acid drugs, and emergency vaccine production capacity.
Where to invest
A majority of provinces highlight biomanufacturing as a distinct pillar, covering synthetic biology, cell and gene therapy production, and bio-based materials and chemicals as substitutes for petrochemical inputs.
Specialisation varies by local strength. Beijing, a centre of China’s biopharma industry, focuses on advanced biopharma applications such as cell and gene therapies and radiopharmaceuticals, while Anhui focuses more on upstream R&D and pilot-scale validation infrastructure. Provinces such as Guangxi and Hainan lean into their agricultural and marine resources to develop bio-based food, feed, and materials, as well as biopharma products.
| Province | Focus Areas |
| Anhui | Bio-food, bioenergy, bio-materials, biochemicals, enzyme preparations; bio-component R&D, strain performance optimisation, bio-based platform compound creation; scaling up bench-scale and pilot-scale validation capacity toward commercialisation |
| Beijing | Enzyme preparations, intelligent germplasm design, smart fermentation; bio-breeding, biochemicals, biopharma, bioenergy; cell and gene therapies, antibody drugs, nucleic acid drugs, radiopharmaceuticals; emergency vaccine/drug production capacity |
| Guangxi | Biochemicals, bio-pharma, bio-food, marine biomanufacturing; bio-based chemicals and materials; biopesticides, biofertilisers; blood products, recombinant growth factor, bio-enzymes, animal vaccines; genetically engineered vaccines, recombinant protein drugs, novel antibody drugs; functional sugar alcohols, amino acids, natural products, cultured meat, microbial protein foods |
| Yunnan | Synthetic biology, bio-breeding, gene editing, cell engineering, core enzymes and strains; pilot-scale testing platforms; applications across medicine, agriculture, food, chemicals, materials, energy, environmental protection |
| Hainan | Diversified bio-feedstock supply; bio-food, bio-agriculture, bio-materials, biochemicals, bioenergy; tropical/marine bioproducts and future foods; bio-breeding, biofertilisers, biopesticides, veterinary drugs; biodegradable materials, bio-cellulose, synthetic biomaterials; bio-based chemicals, enzymes, and biofuels |
Considerations for foreign investors
For foreign companies, this growing industry signals a genuine new frontier. However, the sector’s pace and regulatory sophistication mean success requires a thorough understanding of where the real opportunities lie.
Demand is strongest for foreign suppliers of lab equipment, bioreactors, and strain-engineering tools, while fermentation-derived proteins and novel food ingredients stand out as some of the fastest-growing commercial segments. Most foreign firms enter through joint ventures, university R&D collaborations, or licensing agreements rather than establishing an independent entity, which helps investors navigate the sector’s compliance demands around biosecurity, data governance, and genetic-resource rules.
Next steps – How to enter the market
China’s provincial FYPs show where the opportunities are, but turning that into a viable entry strategy requires more than identifying a priority sector on paper. Each industry, and each province, has its own regulatory approval process, incentive structure, and competitive landscape, and informed market entry requires comprehensive on-the-ground intelligence.
Dezan Shira & Associates helps companies entering China with this kind of practical intelligence, combining rigorous data analysis with local insights into demand, competition, compliance, and distribution networks. Whether you are assessing market entry, refining positioning, or scaling across China’s priority industries and provinces, our research helps you prioritize the right opportunities and plan for sustainable, region-specific growth. Contact our experts for a consultation.
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