China promotes city clusters for more regional integration

City clusters are China’s new administrative units to break local barriers and promote regional integration. Market integration and transportation inter-connectivity will be the two major policy focuses for the next five years, with land and labor reform measures to be first piloted in major city clusters. MNCs operating in China need to review synergies across their locations in China from the lens of the city cluster policies. They also need to pay close attention to the policy dynamics and coordinated regulatory enforcement within this “expanded” administrative boundary.