China’s property sector struggles and U.S. sanctions have had a significant impact on the rankings of cities in the Milken Institute’s best performing cities China index. Hangzhou, the capital of Zhejiang province and a hub for tech companies like Alibaba, has secured the top spot in this year’s rankings. The city’s success is attributed to its growth in e-commerce, manufacturing, and finance sectors.
On the other hand, cities like Zhuhai, once considered a “rising star,” have witnessed a decline in their rankings. The slump in the real estate sector has caused Zhuhai to drop 32 places to 157th place. Similarly, Dongguan, known for its factories and Huawei’s campus, has also suffered a setback due to U.S. sanctions. Dongguan fell 15 places in the rankings to 199th place.
Despite the challenges faced by some cities, Shenzhen has managed to climb up the rankings to secure the 9th position. Beijing continues to dominate the rankings, coming ahead of Shenzhen. However, both cities have been impacted by U.S. sanctions, with many blacklisted Chinese companies based in these regions.
Cities like Wuhan and Hefei have shown resilience in the face of challenges. Wuhan, known for being the epicenter of the COVID-19 pandemic, has surged in the rankings, nearly 30 places to the second position. The city’s efforts to keep factories operational during the pandemic have contributed to its quick rebound. Similarly, Hefei has remained among the top ten cities, receiving direct government support for technological development.
Are Hangzhou’s Successes Replicable?
While Hangzhou’s success as a hub for various industries is commendable, replicating it in other cities may prove challenging. The outperformance of the local property sector in Hangzhou has significantly increased living costs, making it difficult for other cities to emulate its success. However, cities like Zhuhai have the potential to excel in service and high-end production jobs in biotech, excluding the real estate sector impact.
China’s property struggles and U.S. sanctions have reshaped the rankings of cities in the Milken Institute’s index. While some cities have faced setbacks due to real estate slumps and geopolitical challenges, others have managed to thrive through innovation and government support. It is crucial for cities to adapt to changing economic landscapes and leverage their strengths to ensure sustainable growth and development.