Transfer of factories to Western China in 2025-2026

Over the past three to five years, China has experienced the largest reallocation of production capacity in two decades: production goes to the interior of China, enterprises massively leave Guangdong and the Pearl River Delta and move to the western provinces. If in the 2000s, the Go West program was mainly infrastructural in nature, then since 2021, the changes taking place have become systemic: government policy, rising labor and land costs in the east, China’s desire to strengthen the sustainability of supply chains, and the energy crisis of 2021-2023 forced thousands of companies to revise the geography of their plants.

According to the Ministry of Industry and Information Technology (MIIT), by 2025 more than 32,000 enterprises They have already moved part or all of the production cycle to central and western China. About 50,000 companies announced relocation plans for 2025-2026. The movement is especially active in Sichuan, Chongqing, Guizhou and Yunnan – regions where the state has created powerful industrial zones, and the cost of resources and labor is much lower than in coastal megacities.

Key reasons:
● shifting factories to western China became more profitable due to reduced costs;
● China moves factories westwardto avoid dependence on congested eastern ports;
Global supply chains require diversification and risk reduction.
● Production goes to internal China in response to rising wages in Guangdong.

Capacity transfer is no longer a temporary measure, a long-term strategic line for China’s industrial development until 2035.

Public Policy: From Go West to the New Wave 2021–2035

The evolution of the “Develop the West” program

The Go West strategy, launched in 2000, had three objectives:

1. Reduce the gap between East and West.
2. Attract investment in infrastructure.
3. Create new points of industrial growth.

However, until 2015, the transfer of production was slow: logistics was weak, the skills of the labor force were lower than in the east.

New Politics 2021–2035

After the pandemic crisis and the global restructuring of logistics, the Chinese government radically revamped its approach.

Key elements:

1. 14th Five-Year Plan (2021–2025)

● enlargement of Sichuan-Chongqing industrial clusters;
development of high-tech zones in Guizhou;
Large-scale investments in highways, airports and railways.

2. Double cycle strategy (ной)

Bet not only on exports, but also on the domestic market. This makes the western provinces key logistics hubs for distributing goods within China.

3. Benefits 2023-2025.

● Tax holidays 5-15 years.
● Electricity subsidies.
● Free land in industrial parks.
Instant processing of permits (terms reduced by 3-5 times).

4. Position of the PRC leadership

Xi Jinping in speeches of 2024-2025 several times stated that “Development of the Western Industrial Belt – the Foundation of Supply Chain Sustainability in China”.

Why factories are leaving Guangdong and the Pearl River Delta

1. Growth in labour costs

Average salary of a worker (yuan/month):

The difference with the western regions is 30-45%.

2. Expensive industrial land and lease

● Shenzhen – up to 3,000–4,000 yuan/m2
Dongguan – 1,800–2,500 yuan/m2
Chongqing/Guizhou – 200–600 yuan/m2

3. Electricity restrictions 2021–2024

Businesses in Guangdong faced:
• consumption limits;
• increased tariffs;
● forced stops.

4. Environmental tightening

New norms have become a problem for textiles, dyeing, electroplating, electronics assembly.

5. Real case transfers

Foxconn has partially moved the lines to Chengdu and Chongqing.
● BYD increased capacity in Sichuan.
● Several furniture clusters have completely gone to Guizhou.

Main provinces-recipients of production in 2025

Comparative table of regions

New industrial zones and mega parks 2023–2025

Chengdu-Chongqing Economic Circle – Main Growth Center

In 2023-2025, more than 1.2 trillion yuan of investments were attracted here.

Top 10 New Industrial Parks:

1. Chengdu Hi-Tech West Zone
2. Chongqing Liangjiang New Area
3. Guizhou Big Data Park
4. Zunyi Advanced Manufacturing Zone
5. Kunming Airport Economic Zone
6. Sichuan Mianyang Electronics Cluster
7. Yibin Power Battery Industrial Park
8. Guiyang High-Tech Industrial Zone
9. Luzhou New Energy Materials Park
10. Qingbaijiang International Railway Port Zone

The industries that are leaving the fastest

● Electronics. Assembly, components, printed circuit boards.
● Semiconductors. Packaging, testing, low-end chips.
● Cars and New Energy - Electric cars, batteries.
● Textiles and clothing. Mass segment.
● Furniture and toys. The entire low-cost segment.
● Data centers -- Guizhou has become China’s new data hub.

Forecast for 2026-2030: the next direction of movement

Where China will move production

The following regions with the greatest potential:

Gansu – proximity to the “One Belt, One Road” corridor
Qinghai – Cheap Solar Energy
Inner Mongolia is the cheapest electricity in China

Risks of Western Provinces

• Lack of qualified engineers;
logistics to ports;
Water resources (relevant to Guizhou and Yunnan).

What it means for business: practical conclusions

2025-2026 is the best time to move the line or open a new plant.
Sichuan and Guizhou – the optimal balance of cost and infrastructure.
● Chongqing is preferred for electronics and new materials.
● For textile and furniture industries – Yunnan and Guizhou.
● In the western regions, benefits are available that actually reduce the cost by 20-30%.

Moving industry west is not a temporary measure, but a new reality for the Chinese economy. Manufacturing is moving into inland China, Guangdong is no longer the only assembly center, and the western provinces have become key growth points for the next 10-15 years.

If you are planning to start a factory or move production, in 2025-2026 it is worth looking not only at Guangdong, but also at Sichuan, Guizhou, Yunnan and Chongqing.