- Traditional “water town” aims to build its first trillion-yuan industrial ecosystem through advanced chemicals and new materials
- Homegrown champions and global companies anchor a push toward higher-value manufacturing
Jiaxing, a manufacturing hub in Zhejiang province, is accelerating plans to build a 500 billion yuan ($74 billion) global advanced manufacturing cluster centered on fine chemicals and new materials, as the city seeks to move up the industrial value chain.
The push is symbolized by the construction of Satellite Chemical’s Future R&D Center in Jiaxing Economic and Technological Development Zone.
The listed firm’s 2.38 billion yuan project, currently under construction, will include a 137,000-square-meter research complex and a 64,000-square-meter residential facility for experts.
Once completed this year, the center is expected to bring together more than 2,000 researchers and serve as an open innovation platform connecting upstream and downstream companies.
Cornerstone industries
The project represents more than an expansion by a single company. It reflects Jiaxing’s broader effort to upgrade its chemical and materials industries, which have become a cornerstone of the city’s manufacturing economy.
In July, Jiaxing overhauled its “135N” advanced manufacturing cluster strategy, designating fine chemicals and new materials as the city’s first globally oriented advanced manufacturing cluster.
The city has set a target of building a 500 billion yuan industrial cluster by 2030. The ambition is backed by a substantial industrial base.
Fine chemicals and new materials are already Jiaxing’s largest industrial sector. In 2025, the sector’s output value generated by industrial companies with annual main business revenue of 20 million yuan and more reached 379.5 billion yuan, ranking second in Zhejiang province.
In the first half of this year, output rose 11.8% year over year to 212.61 billion yuan.
A group of powerhouses
The cluster has attracted 15 listed companies, seven national-level “single champion” manufacturing enterprises, and multinational corporations including Shell plc and BASF.
Major domestic players include Tongkun Group (桐昆集团), Xin Feng Ming Group (新凤鸣集团), Huayou Cobalt (华友钴业) and Satellite Chemical (卫星化学).
Leading companies are expected to serve as the cluster’s growth engines. Satellite Chemical’s high-end polyolefin catalyst technology has been selected for China’s Ministry of Industry and Information Technology’s “challenge-based innovation” program.
The company has invested nearly 10 billion yuan in R&D over the past five years and plans to invest another 10 billion yuan over the next five years to tackle bottlenecks in advanced materials.
Meanwhile, China Jushi (巨石集团), a new materials developer, leads globally in production capacity for three major products — thermoset roving, thermoplastic reinforced fiberglass and electronic fabrics.
These fiberglass-based materials are essential inputs for modern industries — strengthening wind turbines and industrial equipment, reducing weight in vehicles, and enabling advanced electronics such as circuit boards.
Huayou Cobalt’s cobalt products account for about 21% of global output and 27% of China’s production.
Challenges ahead
But building a 500 billion yuan cluster will require overcoming significant constraints.
One challenge is the shortage of land available for chemical industry pilot-scale testing platforms. Jiaxing’s economic and information technology authorities have openly acknowledged that limited industrial land resources currently make it difficult to establish multiple provincial-level comprehensive pilot service bases.
Infrastructure upgrades also remain a challenge. Some industrial parks face aging public pipelines and utility corridors, while renovation projects are complicated by high operating loads, construction risks and rising costs.
Environmental management is another hurdle, with some companies needing to improve waste gas collection and treatment facilities amid continued public scrutiny.
To address these challenges, Jiaxing has outlined a “one core, three zones” development structure built around four major chemical industrial parks.
The framework positions Jiaxing Port Chemical New Materials Park as the core hub, supported by three additional parks in Pinghu, Haiyan and Nanhu.
Regional integration
Together, the parks form a coastal chemical materials corridor along the northern shore of Hangzhou Bay.
Each segment will focus on a different growth area: expanding chemical materials capacity, strengthening advanced fibers, improving fiberglass composites, and developing new energy battery materials.
A key part of the strategy is regional integration. Jiaxing is seeking to become part of a broader world-class chemical materials cluster around Hangzhou Bay, working alongside petrochemical hubs such as Ningbo-Zhoushan, Shaoxing’s specialty chemicals sector and Shanghai Jinshan Chemical Industrial Zone.
From construction cranes rising at R&D campuses to a coordinated regional industrial strategy, Jiaxing is attempting to transform its long-standing manufacturing base into a globally competitive advanced materials hub.
Its ambition reflects a broader shift among Chinese industrial cities: moving from scale-driven manufacturing toward innovation-led industrial ecosystems.
