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China's economic recovery
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What are China’s most dynamic cities? New report gives surprising answer

Smaller Chinese cities now have higher growth potential than Beijing and Shanghai, according to the Economist Intelligence Unit

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Hangzhou has emerged as a major Chinese technology hub, nurturing high-profile companies including humanoid robot maker Unitree Robotics. Photo: Handout
Xinyi Wu

China’s most dynamic local economies are no longer metropolises like Beijing and Shanghai, but lesser-known cities including Hangzhou and Hefei, according to a new report by the Economist Intelligence Unit.

The findings reflect a growing shift in China’s economic landscape, as smaller cities emerge as a main engine of growth due to their strength in advanced manufacturing, clean energy and other emerging sectors.

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The annual report by the EIU ranks Chinese cities in terms of their growth potential, with the eastern city of Hangzhou – home to e-commerce giant Alibaba, artificial intelligence start-up DeepSeek, and several other major technology companies – topping the list for the fifth consecutive year.
It was followed in the ranking by Hefei – an eastern city known for being a hub for semiconductor and electric car companies – and the southwestern industrial powerhouse of Chengdu.

Shenzhen, often dubbed China’s Silicon Valley, placed fifth, while Beijing, Guangzhou and Shanghai all failed to make the top 10.

The results “capture the rise of manufacturing and the decline of the service sector” in China, economists Xu Tianzeng and Su Yue wrote in the report, as a prolonged property downturn drags down consumer spending and the economy continues to rely on strong production.
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Most of the top-ranked cities have benefited from China’s advanced manufacturing boom, recording strong economic growth and attracting significant population inflows over the past two years.

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