Other BriefingsWhere to Invest in China in the Next Five Years – Breaking Down Priority Industries by Province
The 31 mainland provinces’ 15th Five-Year Plans are a treasure trove for investors looking at where to invest in China. This article breaks down China’s provincial priority industries, highlighting where foreign investors can find the strongest opportunities in emerging fields such as green hydrogen, embodied AI, semiconductors, and biomanufacturing.
The 15th Five-Year Plans of China’s 31 mainland provinces, autonomous regions, and municipalities (hereinafter collectively referred to as “provinces”) reveal close alignment on a set of priority and strategic industries for the country’s industrial development over the next five years. High-tech sectors such as AI technologies, green energy, semiconductors, biomanufacturing, and aviation now appear in almost every provincial plan, outlining how China’s national-level industry priorities have filtered down to nearly every corner of the country.
For foreign investors considering entry into China’s high-tech and emerging fields, the plans provide unique insights into where new investment opportunities lie, as each province is tasked with advancing breakthroughs in the same core set of strategic technologies, tailored to local advantages, specialisations, and niches.
This the first in a two-part series on China’s provincial industrial priorities. Read Part 2 here: Where to Invest in China – Analysing Four Priority High-Tech Sectors
China’s strategic industries
Priority industries in China’s 31 provincial-level FYPs are generally distributed according to local industrial strengths and unique geographic advantages and characteristics.
However, a growing number of high-tech industries have become ubiquitous across the country, with AI, new energy, semiconductors, biomedicine, and aviation, among others, now appearing in almost every provincial plan regardless of local strengths. This illustrates how China’s national-level industry priorities have filtered down to almost every inch of the country, and how every province is now tasked with advancing and achieving breakthroughs in certain strategic high-tech and emerging industries.
There is nonetheless still considerable industry specialisation across the country. Provinces with rich mineral and rare earth deposits naturally include an emphasis on mining, processing, refining, and the production of select downstream products, while provinces with abundant clean energy resources, such as wind, solar, and hydrogen, are differentiating themselves by positioning themselves as suppliers of low-cost green energy infrastructure and power.
Specialty agricultural industries remain concentrated in a handful of provinces, such as dairy in Inner Mongolia and Qinghai, tropical fruit in Hainan, tea in Fujian, Zhejiang, and Yunnan, grain processing in Heilongjiang, and wine and goji berries in Ningxia.
Meanwhile, the country’s most developed provinces, in particular Shanghai and Beijing, are moving even further away from these resource-based industries, relying on high-value technology and cutting-edge sci-tech fields as their primary drivers of growth.
All of the provincial plans outline three major focus areas for industrial development:
- Upgrading traditional industries: Digitising, automating, and greening legacy sectors such as steel, petrochemicals, textiles, and shipbuilding, and transitioning them toward production of higher-value commodities, goods, and services.
- Expanding emerging or new industry pillars: Expanding new sectors that have already gained commercial traction and market share, such as EVs, batteries and new energy storage, industrial robots, and high-end equipment manufacturing, so that they can become larger and more competitive growth engines.
- Fostering “future industries”: Fostering nascent, cutting-edge technologies, such as quantum technology, embodied AI and humanoid robots, hydrogen energy, 6G, brain-computer interfaces (BCIs), and biomanufacturing.
China’s united front in high-tech development
Many cutting-edge “future” and high-tech industries have achieved broad consensus across China’s 31 mainland provinces, appearing in all or almost all of the provincial plans. These are industries that are now clearly a top priority for the central government, with all provinces having been called upon to advance their development. They include:
- Biopharmaceuticals and advanced medical devices
- Biomanufacturing
- Semiconductors/integrated circuits (ICs)/chips
- Quantum technology
- Robots and embodied AI
- Aerospace & aviation
- AI
- 6G tech
- New materials
- New energy, especially green hydrogen
AI is mentioned in all 31 plans in some capacity, with most provinces calling for direct development of the technology, while a smaller number focus on its implementation as a tool for industrial upgrading.
Biopharma is mentioned in 30 out of 31 plans, with Tibet instead highlighting “Tibetan medicine”. Biomanufacturing has also become an important focus industry in its own right, with 29 out of 31 provinces outlining it as a distinct priority area.
Semiconductors, ICs, and chips, in terms of direct development, are mentioned in 28 out of 31 plans, with focuses and niches varying by province. Given China’s ongoing push for technological self-sufficiency, particularly amid tightening export controls from the US, semiconductors have become one of the most strategically sensitive and closely watched industries in the country’s industrial policy.
New materials are mentioned in all plans as well, reflecting their role as a foundational input for many of these other high-tech sectors and applications.
Hydrogen energy, and green hydrogen in particular, has become a particularly important industry priority, named by all 31 provinces as part of the push to diversify China’s energy mix and support decarbonisation in hard-to-abate sectors.
What next? Deciding on where to invest in China
While many provinces now converge on these priority industries, each region will often specialise in different sub-industries and niches. Jiangxi, for instance, focuses on semiconductor materials and packaging rather than manufacturing, while Shanxi’s AI ambitions lean heavily toward computing power and smart terminals tied to its energy and metallurgy base. Sectors that are closely tied to green energy, such as the production of green hydrogen, are concentrated in provinces with rich clean energy resources, such as the northeastern, northern, and western provinces.
Identifying the right province and the right niche ultimately requires precise, on-the-ground intelligence rather than simply scouring the development plans. Dezan Shira & Associates‘ Market Research and Market Study services combine rigorous data analysis with local insight into demand, competition, compliance, and distribution networks, helping investors prioritize the right opportunities and plan for sustainable, region-specific growth as they navigate China’s next phase of industrial development. Contact our experts today to get advice on how to get started.
With the region’s rapid economic growth and diverse regulatory environments, businesses must navigate shifting costs, complex compliance frameworks, and conflicting information. Our professionals support investors with actionable data on Asia’s industrial landscape, location analysis, supply chain diversification, and market entry strategy. We also offer business partner matching services and assist in identifying optimal investment destinations through cross-country competitiveness benchmarking.
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China Briefing is one of five regional Asia Briefing publications. It is supported by Dezan Shira & Associates, a pan-Asia, multi-disciplinary professional services firm that assists foreign investors throughout Asia, including through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Haikou, Zhongshan, Shenzhen, and Hong Kong in China. Dezan Shira & Associates also maintains offices or has alliance partners assisting foreign investors in Vietnam, Indonesia, Singapore, India, Malaysia, Mongolia, Dubai (UAE), Japan, South Korea, Nepal, The Philippines, Sri Lanka, Thailand, Italy, Germany, Bangladesh, Australia, United States, and United Kingdom and Ireland.
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