Not only major city clusters. China’s provinces and smaller cities are moving up the value chain. And these 5 regions have proved to be a valuable asset in the Dragon’s economic development
With an urban population on course to hit 1 billion by 2030, China is planning a coordinated development of regions to sustainably manage its rapid urbanization. 19 city clusters have been built around the largest hubs with the goal to support the national economy and the country’s growth but other regions are now demonstrating to be a valuable asset in the Dragon’s economic development.
On one hand, China’s 19 city clusters have transformed into the growth poles and innovation hubs of national and regional economies, as well as an important source of economic competitiveness. On the other hand, the city cluster system is allowing smaller cities, which tend to be at earlier stages of industrialization, to move up the value chain, building new competitive economic realities in China’s unexpected provinces.
Here are five of the Chinese provinces that are going through rapid evolution and are likely to drive the Dragon’s next phase of development.
1. Anhui: the small Chinese province that attracts foreign talents
Located in eastern China, Anhui is one of China’s smallest provinces. It is situated in the Yangtze River Delta, which, together with the Pearl River Delta and the Beijing Tianjin Hebei cluster, is one of the three “super” regions expected to drive national future economic development.
Anhui was long one of the country’s poorest and most undeveloped areas. Since 1949, it has been through numerous successful attempts to leverage the region’s resources such as China’s first large-scale water-conservation project in the Huai River basin.
Then, in recent years, the province has been the protagonist of rapid economic growth thanks to the presence of abundant deposits of coal and methane gas, which has turned the area into an important energy production base in eastern China. Moreover, since the ’60s, Anhui has developed the automotive sector and, after the creation of Chery Automobile in Wuhu at the end of the ‘90s, is now one of the country’s largest car exporters.
Even Anhui’s capital is recording shining results. Not only is Hefei the fastest growing city in the Middle Kingdom but when it comes to attracting foreign talents, it also ranks third, beating international hubs such as Shenzhen and Guangzhou. In 2017, the capital even became the province’s center for research in information technology (IT) when the city launched the second comprehensive national science center in China.
As well as Hefei, many lower-tier cities grew rapidly as the province became industrialized, notably Huaibei, which has developed around coal-mining operations.
2. Fujian: the strategic gateway to the global market
In addition to the 19 city clusters, China also plans to develop other interregional clusters to boost regional economies and contribute to China’s balanced development. Among these, there is the Fujian Coastal urban cluster, whose innovation hubs like Fuzhou and Xiamen are turning the province into a strategic gateway to southeast China and the global market.
Located on the Taiwan strait, Fujian is surely one of the most promising local economies of the Middle Kingdom. Today, the region’s GDP ranks 10th among China’s provinces and it is the 6th most digitized region, having given birth to many of the country’s most successful startups.
Since the pilot Free Trade Zone (FTZ) in the Fujian province was implemented in 2015, cities like Fuzhou and Xiamen could benefit from the possibility of importing goods without the application of customs duties.
In particular, Xiamen is the primary international port of the region. Much of the economic success of this city comes, in fact, from its nomination as one of the first four Special Economic Zones that engaged in trade with the outside world, an advantage that still pays off after thirty years.
Cifnews 雨果网 has established its headquarters right here, where, last August, it hosted the 2019 Xiamen China Cross-border E-commerce Exhibition. As the natural gateway to the global market, Xiamen is indeed the symbol of Chinese cross-border trade. It represents also a strategic outpost for the Belt and Road Initiative (BRI) that will connect the region’s huge market and impressive growth potential with the global market.
3. Zhejiang: the Chinese Silicon Valley is now connected to Europe
Nestled between Shanghai and Fujian, Zhejiang is one of China’s smallest but richest provinces. Just like Anhui, it belongs to the Yangtze River Delta region and its capital is now believed to drive the 21st-century Chinese technological revolution.
Known as the “Chinese Silicon Valley,” Hangzhou is the headquarters of e-commerce giant Alibaba, which has made it earn the title of “e-commerce capital of China”. In April 2016, the government even designated the city as one of the country’s ten cross-border e-commerce pilot cities giving it preferential status to facilitate tax policy and handle foreign goods.
Recently, Zhejiang became extremely important for the BRI as a crucial hub for the China-EU connection. Although the first China-Europe freight train service was launched in Zhengzhou, Henan province, in 2017, the China Railway Corporation – Beijing’s national rail network operator – officially inaugurated a new direct freight train connecting the Zhejiang province with Europe. The train travels from Yiwu to the eastern suburbs of London via Kazakhstan, Russia, Belarus, Poland, Germany, Belgium, and France.
Among these European countries, Belgium represents a real partner for what concerns the development of the BRI. Since last year, a new important route is now connecting the People’s Republic with the Belgian region of Wallonia, where next December, Cifnews will host the first edition of the EU Cross-Border E-Commerce Forum.
4. Guizhou & Guangxi: leveraging natural resources to catch up with Beijing
Both Guizhou and Guangxi, in southeastern China, once were considered among the least developed provinces of the country. Today, although the two regions only host lower-tier cities, their urban centers are growing fast to compete as China’s next Silicon Valley.
The Guizhou government, for example, has been promoting and developing the big data industry and its efforts have enticed big tech companies to build data centers here. Ironically, its negative attributes – including mountains that deter travel and poor weather – make it ideal to store sensitive data indeed. Moreover, there are few cities in Guizhou but its electric-power generation is a major component of its economy.
The southern Autonomous Region of Guangxi, instead, is not only one of the six newly established FTZs but it is also one of the three sustainable development zones approved by the Chinese government in 2018.
Guilin particularly focuses on innovations to face the threat of desertification while the whole area promotes cross-border trade, logistics, and labor cooperation to boost both the region’s opening-up and the country’s economic development. Guangxi is also part of the Beibu Gulf Megalopolis that lies on the China-Vietnam border, which is a major center of international trade.
Recently, Guangxi has made considerable progress in its economic development. Its rural industries have been developed in an effort to diversify the village economy. The region also has tremendous hydroelectric potential so much so that numerous facilities have been installed.
Being left behind by the Dragon’s early development, these two provinces are now running fast to catch up with Chinese standards. Their regions full of resources and their location at the southern borders of China make them important partners in the country’s economic boom.
5. Sichuan: Chengdu is ready to become China’s next startup hub
The Southern province of Sichuan includes the Chengdu-Chongqing – Chengyu – city cluster, which represents one of the privileged corridors of the BRI. Sitting in the upper reaches of the Yangtze River, the Chengyu city cluster benefits, in fact, from both the development opportunities of the BRI and the construction of the Yangtze River economic belt.
Compared to other Chinese clusters, the area boasts numerous advantages such as fertile lands and rich resources, complete transportation systems, manufacturing, and finance industries.
Indeed, the province’s capital, Chengdu, is one of the richest and most populous cities in China. Its international airport is one of the busiest in the PRC and the city also hosts a direct train to Europe, thanks to which thousands of trains have reached the Old Continent from the Middle Kingdom so far.
Chengdu has the most successful economy of any city in mainland China, considering factors such as employment growth, foreign investment, and high value-added industries. Its long history of electronic and technological industries has easily led the city to be the center of high tech that attracts numerous multinationals including Nokia, Microsoft, IBM, and Cisco.
Growing internationally and integrating into global industrial networks, Sichuan’s capital has already become the 4th pole of the IT industry in China, after Beijing, Shanghai, and Guangzhou but it now aims to become a startup hub, planning to produce at least seven Unicorns by 2022.
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