Ma Xiaohe, deputy chief of the Academy of Macro-economic Research with the National Development and Reform Commission, pointed out that local governments' policies to woo outside investment are another factor driving the trend.

Eager to catch up with the coastal areas, local authorities in the less developed areas have scrambled to roll out a string of generous policies, including tax breaks and cheap land, to attract investment from far and wide.

Ma characterized the tide as a significant boon to ease the development imbalance in China, provided local authorities attract clusters of industries that are in line with their development strategy and keep upgrading and innovating to boost competitiveness.

"Industries will always move toward places where costs are low. Local authorities should try to enhance their competitiveness to prevent jobs from flowing out to southeastern countries where costs are even lower," he said.

Zhou Hongchun, an analyst with the Development Research Center of the State Council, views the jobs created by the industrial transfers as very important for China's urbanization plan, under which the country is aiming to make 60 percent of its population urban residents by 2020.

"Urbanization is not just about urban status numbers, it is more about whether enough jobs can be created in the cities," he said.