Jinan and Weifang: the Shandong Tier 2 Cities to Keep An Eye On

05/12/2018

While preparing for its leadership role in the hi-tech industry, China is investing in tier 2 cities. Among these growing local economies, there are Jinan and Weifang, Shandong’s most promising cities

 

When talking about China, we are used to identifying the country business area as well as its wealth with the Chinese cities we studied at school 30 years ago. Beijing and Shanghai are the best-known first-tier cities, even if Guangzhou and Shenzen are well-known as well.

However, while first-tier cities still rank first for what concerns GDP in China, second-tier cities are quickly moving up the ladder. Tier 2 cities refer to provincial and sub-provincial capital cities with GDP between $ 68 billion and $ 299 billion and a population between three to 15 million people.

In the not-so-distant future, more than half of the rich Chinese will live in second-tier cities, which are now considered “first-class opportunities” by both Chinese and foreign investors. Thanks to a huge amount of investments and a constant influx of new talents, these areas are quickly developing new industries attracting worldwide enterprises.

 

The Made in China 2025 plan is rewriting the geography of Chinese industrial development by placing the new high technology hub in cities located along the renewed “silk road”, Belt and Road Initiative, including second-tier cities such as Chongqing and Chengdu.

 

Many of the tier 2 cities, located primarily in central China, have been boosted by Chinese investments that provided better highways and faster trains to increase access to these areas, positively influencing its growth and the country as a whole.

Among these growing local economies, there are Jinan and Weifang, two promising second-tier in the Shandong province.

 

Jinan and Weifang, shandong tier 2 cities - confucius statue - cifnews

© Pixabay. Shandong area is one of the centers of the Chinese civilization as the birthplace of a great number of historical and cultural figures who still have influences on today world culture such as Confucius.

 

The province, situated on the central coast of China, has now emerged as one of the most populous and the third wealthiest area of the PRC with a total output value that reached $ 579.97 billion in the first half of 2018, and a year-on-year growth of 6.6 %.

 

In 2015, the central government announced a five-year plan with 27 goals to improve by 2020 such as economic development, innovation drive, people’s welfare, and the environment.

 

Shandong recently has been in the news for its Environmental Protection Bureau’s release of a three-year action plan to change to cleaner energy. The goal is to cut steel and coal production capacity and to eliminate updated aluminum smelters by 2020 as part of a broader nationwide “war on pollution”.

Known as the Spring City, Jinan 济南 is the capital of the province. With a population of 7 million people, it is one of the first three China software cities honored by the State Government, together with Nanjing and Chengdu.

 

With an annual GDP that represents about 1/10 of the amount of Shandong, Jinan is one of nine financial centers in China and one of Top 50 powerful economic strength cities.

 

The focus on technology-intensive industries has transformed Jinan from a city supported by heavy industry and textiles to an IT-related economy enough to be one of the first city to found a hi-tech zone approved by the State Council in 1991. Since its foundation, the Jinan High-tech Industrial Development Zone has attracted international enterprises as LG, Panasonic, and Volvo. The area now represents a showcase, exhibiting the growing hi-tech industry of Shandong province.

 

Jinan & Weifang, Shandong tier 2 cities - jinan olympic stadium - cifnews

© Weibo. Jinan Olympic Sports Center Stadium in Jinan, Shandong. Jinan conducted major renovations in transportation and services in 2009 when it hosted the selection games for the Chinese Olympic champions.

 

For what concerns innovations, with over twenty thousand enterprises, Jinan focuses on ten sectors including new-generation IT, quantum science and technology, modern logistics, culture, and tourism becoming increasingly important for the total industrial output value with a potential industry value of $ 14.7 for each sector by 2020.

Moreover, China became the first country in the world to implement quantum technology for commercial ends last year when the world’s first quantum communication network was fully operational in the Shandong’s capital.

“Jinan will accelerate the construction of such innovation platforms as a national supercomputing center, a healthcare big data center and a drug research and production center to develop itself into a regional science and innovation hub,” said Wang Zhonglin, Party chief of the city.

As well as Jinan, leading businesses of another Shangdong’s important city – Weifang – are encouraged to strengthen their cooperation with top research institutes, in order to enhance research and development capacity. Located in the center of the province, Weifang 潍坊 is regarded as the world kite capital. The population now reached more than 9 million people while the city ranks 10th in the world in terms of economic growth rate. 

 

It is estimated that by 2020 the number of hi-tech industries in Weifang will reach 170 and they will generate more than 80% of the output value for the area.

 

Weifang High-Tech Industry Development Zone was approved by the State Council in 1992. The area has developed four hi-tech industrial clusters, including IT, modern equipment manufacturing, bio-medicine, and new materials. It has become an important platform for the city to carry out international science and technologic exchanges as well as economic cooperation. It was also listed by the Ministry of Science and Technology as one of the Top five most innovative hi-tech development zones in China.

 

Jinan & Weifang, Shandong tier 2 cities - weifang - cifnews

© JingDaily. Changle in Weifang, Shandong. Weifang became famous during the ‘80s when many sapphire deposits were discovered in the area, which is now one of the top four sapphire producers in the world.

 

In addition, in 2014, Weifang established a smart city department to improve urban management, promote digitalization, and build a new type of future-ready smart city. It recently released the Weifang V app to provide public resources, such as education, healthcare, and transportation services through mobile. The app was then implemented with the Zhiji platform based on the public security census information system from which users receive an electronic ID in the form of a dynamic QR code.

 

After Shenzhen and Hangzhou, Weifang is the third city in China to enable mobile payments for medical cards and the first to implement e-ID cards.

 

In 2016, Weifang also became the first city in China to build an urban smart lighting control system using Huawei’s IoT technology with a view to developing a Smart City IoT Industry Alliance.

In an attempt to invest in local living standard enhancement projects, as part of the urban upgrade process, some residents living in rural areas have been relocated to new apartments. Then Weifang Hi-tech Industrial Development Zone built subdistrict-level and village-level museums to give the younger generations the opportunity to learn the past local traditions and culture.

Currently, Jinan and Weifang are facing great development opportunities. The two second-tier cities benefit from the strategies of the Central Government on the development of “three areas”: the Yellow River Delta High-Efficiency Bio-Economic Development Area, the Jiaodong Peninsula High-End Industrial Concentration Area, and the Shandong Peninsula Blue Economic Area, of course.

In order to grasp these opportunities, the two growing cities speeded up their development becoming the future hub for Beijing’s new plans of innovation. The Made in China 2025 plan thus seems to rely on ambitious local economies.

The two cities once famous for their historical heritage now embrace Beijing innovation development plan becoming a strategic area for both Chinese and foreign enterprises. Moreover, their locations far from first-tier overcrowded centers make Jinan and Weifang new pillars not only for the local economy but also for Chinese consumptions.

 

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