The Catalogue of Encouraging Industries in Western China (2025 Version) is a policy document that outlines the industries that the Chinese government encourages for investment and development in its western regions. The 2025 version aims to further boost the economic growth in western China by providing attractive incentives for both domestic and foreign investors. The industries listed in this catalogue are considered essential for the region’s modernization and sustainable development. These industries encompass various sectors, including high-tech, clean energy, advanced manufacturing, and ecological protection.
Highlights
The 2025 version of the Catalogue introduces several new areas of focus, reflecting the region’s ongoing efforts to boost innovation, infrastructure, and sustainable development. Some of the key highlights include:
Agriculture and Rural Development
Encouragement for the development of special agricultural and forestry products, such as those rich in selenium (e.g., citrus, editable mushrooms, medicinal herbs), with an emphasis on deep processing.
Advanced Manufacturing
Promotion of industries related to the production of small-scale agricultural machinery, as well as forestry machinery and parts tailored for hilly and mountainous areas.
Clean Energy and Environmental Protection
Incentivizing industries focused on renewable energy, waste management, and environmental engineering solutions.
High-tech and Innovation
Support for high-tech industries including artificial intelligence, biotechnology, and new materials, with a particular focus on technology transfer and commercialization in Western China.
Infrastructure Development
Key infrastructure sectors such as transportation, logistics, and digital infrastructure are also prioritized for development, with a focus on improving connectivity and facilitating economic growth in the western regions.
Tourism and Cultural Industries
Expansion of industries related to eco-tourism, cultural heritage preservation, and local creative industries.
Observations
Tax Exemption Policy
Enterprises in encouraged industries in the western region that meet the criteria will be subject to a corporate income tax rate of 15% from January 1, 2021, to December 31, 2030.
Strategic Location for Foreign Investment
Western China offers a wealth of untapped resources and an emerging market that is ideal for foreign investment. The policies in place aim to make this region increasingly attractive by offering subsidies, tax incentives, and improved infrastructure.
Rising Regional Competitiveness
The government has been focusing heavily on bridging the development gap between the western and eastern regions. With enhanced investment in industries, infrastructure, and technology, the western regions are quickly becoming competitive hubs for foreign enterprises.
Alignment with China’s National Goals
The catalogue reflects China’s broader strategy for economic development, including the “Belt and Road Initiative” and the goal to reduce regional disparities. The sectors listed align with the country’s vision for innovation-driven growth and ecological sustainability.
Challenges of Local Governance and Regulations
While the catalogue offers substantial incentives, challenges related to local governance, regulations, and the implementation of policies remain. Foreign investors may face obstacles related to bureaucracy or regional disparities in the business environment.
Suggestions
Leverage Government Incentives
Foreign investors should closely analyze the incentives provided for industries in the catalogue. These include tax breaks, subsidies, and financial support, which can significantly reduce operating costs and enhance profitability.
Focus on Green Technologies
With China’s increasing focus on sustainable development, investors should consider entering green industries, such as clean energy and environmental protection, which not only promise long-term growth but also align with global trends toward sustainability.
Collaborate with Local Governments
Given the variations in local governance, foreign investors should establish strong relationships with provincial and local governments to navigate regional policies effectively and capitalize on development plans.
Invest in Infrastructure Development
Western China’s infrastructure development is an area with immense potential for growth. Investing in logistics, transportation, and digital infrastructure can provide both short-term returns and long-term strategic advantages.
By aligning with the principles of sustainability, innovation, and inclusiveness, the Catalogue of Encouraging Industries in Western China (2025 Version) presents a comprehensive framework for fostering balanced regional development.
