Strategic industries, i.e. 5 year plan ones, local gov will absolutely master plan to excruciating detail for complete industrial chain. Less strategic industries local gov will get a few anchor industries to root and rest is organic. Intercity proximity also brought huge advantages in terms of transportation speed, especially in 90s-00s. The other consideration is scale, a bumfuck tier3 chinese city specialize in xyz will have millions of people which naturally enables greater levels/depths of industrial agglomeration, which is what makes PRC exceptional. Think old Detroit motocity hub that dominated 90% of US car production. PRC has 100s of said cities for different industries. It's not myth/exaggeration that consequence of PRC scale, historically exceptional/aberration tier industrial clusters in other countries, PRC has 100s of, as baseline template.