PERRY WONG, MICHAEL C.Y. LIN, AND JESSICA JACKSON BEST-PERFORMING CITIES THE NATIONS MOST SUCCESSFUL ECONOMIES CHINA 2019BEST-PERFORMING CITIES THE NATIONS MOST SUCCESSFUL ECONOMIES CHINA 2019 PERRY WONG, MICHAEL C.Y. LIN, AND JESSICA JACKSONAbout the Milken Institute The Milken Institute is a nonprofit, nonpartisan think tank. For the past three decades, the Milken Institute has served as a catalyst for practical, scalable solutions to global challenges by connecting human, financial, and educational resources to those who need them. Guided by a conviction that the best ideas, under-resourced, cannot succeed, we conduct research and analysis and convene top experts, innovators, and influencers from different backgrounds and competing viewpoints. We leverage this expertise and insight to construct programs and policy initiatives. These activities are designed to help people build meaningful lives, in which they can experience health and well-being, pursue effective education and gainful employment, and access the resources required to create ever-expanding opportunities for themselves and their broader communities. About the Center for Regional Economics The Milken Institute Center for Regional Economics produces research, programs, and events designed to inform and activate innovative economic and policy solutions to drive job creation and industry expansion. About the Asia Center The Milken Institute Asia Center extends the reach and impact of Milken Institute programs, events, and research to the Asia-Pacific region. We identify opportunities to leverage the Institutes global network to tackle regional challenges, as well as to integrate the regions perspectives into the development of solutions to persistent global challenges. ©2019 Milken Institute This work is made available under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License, available at /creativecommons/licenses/by-nc-nd/3.0/Contents EXECUTIVE SUMMARY .1 INTRODUCTION .4 OVERVIEW: CHINAS ECONOMIC DEVELOPMENT .7 REGIONAL DEVELOPMENT .9 METHODOLOGY . 10 REPORT FINDINGS: Top 10 Best-Performing Cities (First- And Second-Tier Cities) . 13 COMPLETE RESULTS: FIRST- AND SECOND-TIER CITIES . 21 TOP 10 BEST-PERFORMING CITIES (THIRD-TIER CITIES) . 23 COMPLETE RESULTS: THIRD-TIER CITIES . 33 APPENDIX: DATA AND METHODOLOGY . 41 CLASSIFICATION AND DESIGNATION OF CITIES . 41 DATA AND VARIABLES . 42 METHODOLOGY IN DETAIL . 43 ENDNOTES . 44 ABOUT THE AUTHORS . 52BEST-PERFORMING CITIES CHINA 4 BEST-PERFORMING CITIES Tianfu SquareEXECUTIVE SUMMARY 1 Executi ve Summary What was the recent economic performance of Chinese citi es? What are the key drivers of Chinese urban growth? What areas will become growth engines and centers of acti viti es in the vast landscape of the nati on? Since 2015, the Milken Insti tutes Best-Performing Citi es China series has been tracking the economic performance of Chinese citi es. Our ranking index for this 2019 version comprises nine indicatorsone-year (2016-2017) and fi ve-year (2012-2017) growth for jobs, wages, and gross regional product (GRP) per capita; three-year (2014-2017) foreign direct investment (FDI) growth; FDI/GRP rati o (2017); and the locati on quoti ent (LQ) for high value- added industry employment (2017). This index categorizes Chinese citi es into large and small groups to yield more meaningful comparisons and insights. The highlights of the 2019 rankings are as follows (See Table 1 for the Top 10 rankings for the two groups): Chengdu in Sichuan province holds the crown at the top of our ranking in the large citi es group. This is the third ti me the “Land of Abundance” has risen to the top, and the fi ft h ti me it has been ranked in the top 10 large citi es group. With an established industry base and extensive new high-tech build-up, Chengdu bears the fruit of the successful “western development” strategy the city embarked upon 20 years ago. Shenzhen in the Guangdong province secures the second place in the large citi es group, dropping from the top rank last year (2018). As Chinas innovati on economy poster child, Shenzhen has reinvented itself from a low-cost gadget manufacturing center to an innovati on powerhouse. The city is the birthplace of a new generati on of telecom products and the tech- entrepreneur hub of China. Most recently, the Chinese government has deeded Shenzhen with the mission of “building a model city” for the world. Beijing, the nati ons capital and a leader in developing the Tongzhou district, which will become the home to the Beijing municipal government, captures the third spot with the support of an infl ow of FDI. Lanzhou, an ancient outpost and a modern gateway city to the West, takes the fourth place. Infrastructure building is driving the regional economy as the One Belt, One Road Initi ati ve extends via there to Central Asia. Zhengzhou, the central geographic locati on in the nati on, dropped one spot from 2018, ranking fi ft h. This “iPhone City” is not only a producti on center for the internati onal markets, but also a supplier for increasingly affl uent Chinese consumers. Xian in Shaanxi province and Guiyang in Guizhou province are ranked sixth and seventh, respecti vely. Xian advanced three spots from last years rankings, while Guiyang declined by two spots. Both citi es are situated in the western part of China, with Xian in the northwest and Guiyang in the southwest. Both citi es are experiencing an increase in infrastructure building. While Xian is upgrading its industry base and transportati on infrastructure, Guiyang is building the next BEST-PERFORMING CITIES CHINA 2 generation of energy supply, transportation, and electronic storage from the ground up. The rest of the top 10 cities group is Changchun in Jilin province (eighth), Wuhan in Hubei province (ninth), and Xiamen in Fujian province (tenth). Changchun has declined two spots from 2018. With the recent slowing of the transportation sector, the citys automakers may generate less steam powering the city economy, despite healthy demand for high-speed rail carts and engines production. The ongoing industry restructuring in the northeast will continue to impact the citys performance. Wuhan, a traditional industrial powerhouse in central China, advances seven spots this year. High-tech industries, such as chip-making and biomedicine, continue to add growth potential to the citys economy. Xiamen is expanding quickly to make up “lost time” in the last decade and a half. The city was designated as an “economic development zone,” such as Shenzhen in 1979, 1but anticipated growth failed to materialize at the time. As a coastal city, Xiamens economic development focus is the integration of air-ground transportation/shipment hubs and related high-tech components. Dongguan in the Guangdong province takes the number one spot for the second year in a row among the small cities group. The strong showing in the 2018 and 2019 rankings demonstrate the citys economic resilience. In fewer than five years, Dongguan has turned from being labeled as the “Ghost Mall” city in 2012 to become a leading robotic production and artificial intelligence (AI) development center. Nantong in the Jiangsu province takes the second spot. The location of the city has been its most significant asset as the nexus of both a seaport and river port, while also connecting the powerhouse Shanghai and the technology center Suzhou. Industrial activities and commercial services are the key pillars of the regional economy. Zhuhai in the Pearl River Delta cluster ranks third, as the backyard to Asias premium gaming center, Macao. Leisure, retirement, and business services industries define this growing city. Taizhou in the Jiangsu province lands at the fourth spot. The city has been on the top 10 list since the inception of this report series. Ranked at fifth and sixth are Dazhou in the Sichuan province, and Yingtan in Jiangxi, respectively. It is the first time Dazhou and Yingtan have ranked in the top 10 list. Both cities have agriculture- and mining- based economies which are evolving into modern manufacturing and food processing centers. They are both also river transportation hubs in their respective regions. Luohe in the Henan province ranks at the seventh spot,- and is the only agricultural-based economy that has appeared on the top 10 ranking two times. Ranked at the eighth spot is Anshun in the Guizhou province. Both national and local policies and a renewed drive to add technologies into traditional beverage production elevate its economic performance. Suzhou in Jiangsu province is placed at the ninth spot. As the first Science and Technology Park joint-venture between the city and the Singaporean government, Suzhou has been the technology powerhouse in the Yangtze River Economic cluster. Maanshan in the Anhui province rounds off our top 10 list. The city has emerged from an old steel industry base to become a newer, more diversified manufacturing powerhouse. Its proximity to the city of Nanjing, the capital of the Jiangsu province, provides the city with strong R one- and fi ve-year gross regional product (GRP) per-capita growth; three-year foreign direct investment (FDI) growth; proporti on of FDI to GRP; and the locati on quoti ent (LQ) for high value-added industry employment. Given that fi rst- and second-ti er citi es have typically received more support from the central government in the past and are at diff erent developmental stages compared with third-ti er citi es, this index has two categories. The large city group includes fi rst- and second-ti er citi es, while the small city group comprises third-ti er citi es. The large and small city groups are ranked separately to allow for more meaningful comparisons. For the large city group, Chengdu holds the crown. This is the third ti me the prospering city places at the top in our rankings. Located in the western part of China, Chengdu (together with Chongqing) is one of the twin engines powering the economy of the Sichuan province, with economic opportunity spilling over into the Great Western region of China. Chengdu has been a manufacturing center for decades, specializing in defense-related and equipment producti on. Today, Chengdu is one of the top fi ve most populous citi es in China, - and has expanded its economy with a diverse, innovati ve industry base including transportati on equipment producti on, biotech and life science R&D, and consumer electronics products. 2 Shenzhen, “the Silicon Valley of China,” takes the second spot. As Chinas conti nued eff ort on innovati on deepens, the city is a thriving icon and a leading innovati on center across the country. The recent development of the Greater Bay Area will further amplify the citys economic infl uence on regional development. The nati ons capital and a lead in developing the Xiongan New Area and Tongzhou district, Beijing captures the third spot. Lanzhou, as the gateway of the One Belt, One Road Initi ati ve (BRI) to the west, ranks fourth. BRI has brought a windfall of economic benefi ts and more