Hangzhou, the capital of the eastern Zhejiang province, has emerged as a frontrunner in China’s tech industry, being home to tech giants like Alibaba. This year, Hangzhou secured the top spot in the Milken Institute’s best performing cities China index. The city’s success can be attributed to its growth as a hub for e-commerce, manufacturing, and finance. However, Hangzhou’s rise to the top spot may not be easily replicated due to the local property sector’s outperformance, leading to increased living costs.
On the contrary, Zhuhai, once considered a “rising star,” experienced a significant drop in the rankings in the latest index. Located in the southern province of Guangdong, near Hong Kong, Zhuhai plummeted 32 places to 157th place, primarily due to the slump in the real estate sector. Builders faced financial constraints, resulting in halted projects and a decline in house purchases, ultimately dragging down the city’s economic growth prospects.
Impacts of U.S. Sanctions on Dongguan
Dongguan, known as the city of factories and home to Huawei’s sprawling European-style campus, faced challenges due to U.S. sanctions. The city dropped 15 places in the Milken index rankings to 199th place. Despite its historical significance as a hub for manufacturing, Dongguan struggled with the repercussions of U.S. sanctions, impacting its economic performance and growth prospects.
Zhengzhou, the capital of the Henan province and home to iPhone manufacturer Foxconn, experienced a decline in its ranking from 3rd to 22nd place. The city’s reliance on exports and exposure to geopolitical pressures contributed to its lower position in the index. In contrast, nearby metropolis Shenzhen saw an improvement in its ranking, landing in 9th place. However, U.S. blacklisting of Chinese companies based in Shenzhen has posed challenges for the city’s economic outlook.
Wuhan, in Central China’s Hubei province, surged in the index rankings by nearly 30 places to second place. The city’s ability to keep factories running during the pandemic enabled a quick rebound in economic growth. Similarly, Hefei, located in the Anhui province, remained among the top ten cities in the index. Direct government support for technological development at a local university contributed to Hefei’s economic resilience and growth prospects.
China’s property struggles and U.S. sanctions have brought about significant economic challenges for several Chinese cities. While some cities have managed to navigate these hurdles and emerge stronger, others have faced setbacks in their economic performance. The interplay of geopolitical factors, technological advancements, and government support will continue to shape the trajectory of Chinese cities in the coming years.