Hangzhou, the capital of eastern China’s Zhejiang province and a burgeoning hub for e-commerce, has been ranked as China’s best-performing city for 2023-2024, according to the latest Best-Performing Cities China Index compiled by the Milken Institute, a nonprofit think tank based in the U.S. 

Home of tech giant Alibaba, Hangzhou has successfully transitioned into a leader in livestream e-commerce, the report says. The city’s economic strength is further bolstered by flourishing sectors such as entertainment, finance and manufacturing. Its commitment to innovation is evident in its substantial investments in science and technology, according to the report.

“Best-performing does not mean overall economic prowess, but refers more to growth potential,” said Perry Wong, managing director of research at the Milken Institute, and author of the report. He explained that the report uses 15 indicators to gauge the cities, including employment growth, gross regional product, and real estate sales.

Ranking second in growth potential is Wuhan, which has seen a remarkable recovery after being heavily hit by the COVID-19 pandemic. The central Chinese city climbed 27 spots to secure second place among China’s first- and second-tier cities, largely due to its robust manufacturing sector and the growth of the Optics Valley of China, a high-tech cluster driving Wuhan’s innovation and economic expansion, the report says. 

Cities that have strategically invested in emerging technologies have thrived and dominated top rankings despite domestic and international challenges, demonstrating higher economic resiliency, the report says. Nine out of the top 10 best-performing large cities boast a strong technological presence.

In addition to evaluating 33 first- and second-tier cities, the report also examined 217 third-tier cities, with Hainan’s Danzhou emerging as the leader in this category. Danzhou has become a critical logistics hub for international trade, largely due to the strategic importance of Yangpu Port, according to the report.

Perry Wong, managing director of research at the Milken Institute, speaks at the launching of the report in Beijing on Sept. 3, 2024. [Photo courtesy of Milken Institute]

“Despite geopolitical headwinds impacting China’s economic growth trajectory and momentum, this year’s index sheds light on the success China is achieving through boosting investment in science and technology, as well as strategically refocusing its efforts to enhance its capabilities in emerging industries including Al, autonomous vehicles and electric vehicles, which is the key to reinvigorating China’s growth engine,” said Wong.

He also emphasized the importance of Chinese cities developing locally tailored strategies to stimulate their economies, and he called for further financial and tax reforms to support sustained economic growth.

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