can ‘chiefs’ forge modern supply chains?
an evolving institution blending state guidance with market dynamics
As Beijing navigates a new era of industrial and geopolitical challenges, one of the clearest indicators of its evolving strategy is the ‘Chain Chiefs’ (链长). This initiative appoints key industry figures—both state officials and leading firms—as stewards of supply chains, tasked with enhancing domestic innovation, securing critical technologies, and ensuring industrial resilience.
The PRC industry landscape has, despite its famed ‘miracle’ growth, spent the last decade navigating persistent challenges—not only from geopolitical tension and dependency on foreign tech but also from internal meddling.
Domestic supply chains warns Cao Qianrui 曹茜芮 China Centre for Information Industry Development (CCID), still face two hurdles
chokeholds: at the mercy of foreign tech and components
quality gaps: failure to produce at the market-leading edge
Despite substantial investments and visible improvements, the core dynamics between state and market—and the institutional frameworks that define their relationship—continue to challenge policymakers and researchers.
Since 2020, Beijing has sought strategic advantage in a ‘dual circulation’ paradigm. One of its features entails appointing heavyweight authorities to reinforce industry supply chain discipline.
These industry chain chiefs (ICCs) now operate at provincial level across the nation, ensuring resilience, driving tech innovation and addressing industry chokepoints. Piloted in Changsha, Hunan, in 2017, they gained traction during the COVID-19 pandemic and have since cemented their bureaucratic status.
ICCs ideally
reduce reliance on foreign key technologies and components
mobilise resources to develop cutting-edge domestic solutions in industries that face foreign restrictions
upgrade efficiency by better liaison with SOEs, private firms, and local governments
strengthen state oversight in key sectors
These functions align with Beijing’s push for self-sufficiency in critical tech and integrate local and corporate interests via a centralised industry strategy. By fostering liaison among SOEs, private firms, and localities, ICCs streamline industry policy and ensure critical sectors get what they need.
Li Yingbo 李应博 and his team at Tsinghua University School of Public Policy and Management say that while they initially intended to extend, supplement, and derisk supply chains in response to external uncertainties, their focus has shifted toward regulating and steering towards defined policy goals.
what's the role of chain chiefs?
Detailed structures and rollout vary by region and industry, with each province or SOE focusing on a few priority industry chains. Overall, there are two main actors.
chain chiefs (链长 liànzhǎng): state officials or major firms placed in charge of a given region or sector. This Chief gathers stakeholders delegated from state agencies, leading firms, industrial parks, or R&D institutions into committees. Each is responsible for strategies, policies, regulations, or incentives to undergird a given supply chain’s security, tech innovation, and industrial modernisation. The chief coordinates investment funds and organises broader industry, knowledge, and social ecosystems within the jurisdiction. Local government chain chiefs are service-oriented, focusing on supporting local industries and addressing region-specific challenges. In contrast, a central SOE chain chief is industry-focused, aiming to align company goals with national strategic objectives and prevent coordination failures.
chain masters (链主 liànzhǔ): market-dominant firms are recruited to serve their respective supply chain segments. Receiving incentives and support from the chain chiefs, they are expected to set standards, spearhead innovation, and coordinate supply chain ecosystems. Chain Masters act as anchor companies, fostering collaboration with smaller firms, startups, research institutions, and supply chain partners to enhance competitiveness.
This provides a structured approach to aligning local, regional, and national industry goals and resources, says Yang Zhen 阳镇 Chinese Academy of Social Sciences Institute of Industrial Economics. They have precedents in ‘river chiefs’ (for water management) and ‘forest chiefs’ (for environment protection), applying the core principles to industry. Unlike previous models that focused on picking market winners, this approach focuses on making supply chains extended and fortified, making them more resilient to vulnerabilities.
strategic vision—uncertain outcomes
Aiming for more industry coordination, enacting the ICC approach is not without risks of its own.
A report from the State Council Development Research Centre (DRC) Institute of International Technology and Economics identifies major pitfalls in rolling it out
regional protectionism trap: many regions pursue duplicate industry agendas (in new energy, advanced materials, biotech, etc.), leading to involution and local protectionism instead of fostering cross-regional synergy
omnipotent state trap: local state structures tend to dominate industry decisions at the cost of the autonomy and leadership role of firms
management over Innovation trap: with investment and supply chain stability fetish, at the cost of addressing core technological bottlenecks
Awaiting a national framework, provinces have gone ahead with ICC appointments. This results in overlapping agendas and regional rivalry, argue Guo Chaoxian 郭朝先 and Zuo Liguo 左立国 CASS Institute of Industrial Economics.
The State Council DRC report urges unity, coordinating industry chains across provinces and averting fragmentation. Demarkation between the state and firms is needed to ensure that chain masters rule the roost. Tech leaders need performance-based incentives to innovate.
Yang Zhen cautions against over-centralising: supply chains are inherently dynamic; bureaucracy could hinder adaptation to global trends.
Another issue arises from SOE dominance in the economy. Xi Jinping repeats that SOEs are to lead in modern industry chains, deeming them the backbone of PRC tech advances. But excessive reliance on SOEs could, warns Wang Yu 王宇 Nanjing University, marginalise private firms, cramping their ability to innovate. ICCs should, he argues, facilitate rather than direct, ensuring that private firms remain active rather than passive subjects of a state-controlled arena.
Properly enacted, ICCs would provide ‘hybrid’ governance, argues Qu Yongyi 曲永义 CASS Institute of Industrial Economics, blending market efficiency with state-led coordination. SOEs would, he agrees, stabilise things, leaving private firms to drive tech advances—provided the state allowed flexibility for both to function.
For ICCs to come into their own, they must dovetail into broader SOE reform under a stronger national framework preventing fragmented, inefficient operation, insist Guo and Zuo. Fully balanced, they will build industry resilience without stifling market dynamics.
industrial policy expertise
Qu Yongyi 曲永义 | CASS Institute of Industrial Economics
Amid external pressure and domestic challenges, Qu maintains that the PRC economy remains resilient, continuing to advance 'high-quality development'. He notes the roles of digitalisation, smart manufacturing, and green energy transformation in upgrading traditional industries, which still account for over 80 percent of the manufacturing sector. He also champions a holistic policy approach, advocating for deeper integration between technology, finance, and industrial strategies to promote sustainable and innovation-driven growth.
Qu specialises in technology innovation theory and policy, SME development, regional economies, and industrial economics. In recent years, he has played a pivotal role in shaping PRC industry strategy, contributing to policy discussions on the evolving role of state-owned enterprises, private sector engagement, and the future of economic modernisation. He is a member of the 14th National Committee of the Chinese People’s Political Consultative Conference (CPPCC) and serves on its Economic Committee.
National Industrial Base Expert Committee (NIBEC) | 国家产业基础专家委员会
Launched in 2021, the National Industrial Base Expert Committee (NIBEC) operates as a specialised advisory body under the National Manufacturing Strategy Advisory Committee. Its primary mission is to strengthen the PRC industrial base, a key pillar of the Made in China 2025 strategy.
The committee functions through its secretariat, housed within the Strategic Advisory Centre of the Chinese Academy of Engineering. It is led by Chen Xuedong 陈学东 China Machinery Industry Group Corporation (Sinomach) chief engineer, and comprises 100 academicians and industry experts.
It is structured into six specialised working groups, each dedicated to a critical area of industrial development: basic parts and components, basic materials, basic industrial software, basic processes and equipment, basic industrial technology, and policy. These working groups provide strategic guidance and technical expertise to enhance industrial self-sufficiency and innovation in foundational sectors.
The committee plays a vital role in advising on national strategies to ensure a robust and resilient industrial base. It identifies key areas where innovation and investment should be focused, offering recommendations to state ministries and financial institutions on resource allocation for industrial support. Additionally, NIBEC develops technical roadmaps and standards to enhance the competitiveness of China’s manufacturing sector.
Starting in 2022, NIBEC publishes the Industrial Base Annual Development Report every three years. This report evaluates the economic impact of the industrial base, updates the inventory of critical industrial components and technologies, and provides a foundation for government agencies, financial institutions, and research organisations to prioritise funding and policy support.