Haikou Tops the Milken Institute's Best-Performing Cities China Index

The city of Haikou – the capital and most populous city of the Hainan province – exemplifies the Chinese government's efforts to facilitate provincial international free trade and investment in key locations of the country's One Belt, One Road initiative. This has been driven by greater activity from Hainan's first socialist system-based free trade port, in addition to several industrial projects across the region.

Following the same developmental vein as Haikou, while coming in second and third place in the Milken Institute's index for first- and second-tier cities, respectively, are Guangzhou (the capital of Guangdong province) and Xi'an (the capital of China's central Shaanxi province). Meanwhile, Shanghai and Beijing – two of China's perennial economic centers – were ranked sixth and eighth, respectively.

"This year's index highlights the successes China is achieving through its regional development strategy, shifting the burden of economic output away from highly developed regions like the Greater Bay Area," said Perry Wong, Managing Director of Research at the Milken Institute and author of the report.

"Underlining these milestones have been China's integration of urban economies nationwide as well the continued expansion and improvement in transportation infrastructure such as high-speed rail – guided by the nation's Five-Year Plans. Altogether, this year's top-performing cities reflect China's strong commitment towards reducing economic disparities between regions for broader-based, long-term growth – which will be vital in reinvigorating its pandemic-stricken economy," he added.

First- and Second-Tier Cities

The 2021 index also highlights several interesting trends between the first- and second-tier cities:

• Haikou (jumping up 19 spots in the rankings), Shanghai, Wuhan, and Changsha entered the top 10 list for the first time
• Guangdong's rising economic importance is also shown with two of its cities making the top 5 spots – Shenzhen (fifth place) and Guangzhou (second place), which are also China's third- and fourth-largest economies, respectively, after Shanghai and Beijing. Guangzhou has particularly benefited from a growing advanced technology economy driven by artificial intelligence applications
• Third-placed Xi'an's rise reflects the city's strategic position within the Belt and Road network and status as one of China's current aerospace industry powerhouses
• Fourth-placed Chengdu has expanded from its reputation as an industrial and manufacturing base for China's national defence sector to now also being known as an important creative and innovative hub

Rounding up the remaining top 10 positions in the 2021 index are Shanghai (sixth), Wuhan (seventh), Beijing (eighth), Changsha (ninth), and Zhengzhou (tenth).

Third-Tier Cities

The best-performing third-tier city (classified as either a small- or medium-sized city) in this year's index is Chuzhou, which retained its position within the top 5 for two consecutive years. Bordering the provincial capital of Hefei, Chuzhou's economic rise has been influenced by its geographic advantage – which the city is leveraging by closely integrating itself into the Nanjing Urban Agglomeration, located along the Yangtze River delta. Coming in at second, third, fourth, and fifth are Fuyuan, Dongguan, Jiaxing, and Xuancheng, followed by Zhuhai (sixth), Ji'an (seventh), Bozhou (eighth), Lijiang (ninth), and Maanshan (tenth).

This 2021 index for third-tier Chinese cities also showcased multiple notable trends:

• Chuzhou, Xuancheng, and Dongguan retained their position in the top 10 from the 2020 index
• Heyuan – the best performing third-tier city in 2020 – fell out of the list and all the way down to 92nd
• Five of the top 10 cities in 2021 are all located within the Anhui province (Chuzhou, Fuyang, Xuancheng, Bozhou, and Ma'anshan). Fuyang, in particular, moved up 19 positions to clinch second place

"China's comprehensive nationwide development strategy is continuing to bear fruit, as reflected in the performances of its third-tier cities. While the 2021 index shows that only a handful of cities have had staying power, the shifting positions also highlight that thriving economic activity is now happening across the board. This means that the country's third-tier cities are also being leveraged as economic fulcrums – as much as their larger peers – and will continue to be relied upon to help the country collectively respond to both internal and external pressures such as the COVID-19 crisis and geopolitical tensions," said Yeen Chong, Communications Lead at the Milken Institute Asia Center.

To download the full report of the Milken Institute's Best-Performing Cities China 2021 Index, visit the link here. For more information, please click HERE.

Methodology

The 2021 Milken Institute Best-Performing Cities China Index divides 238 Chinese cities into two groups, one for first- and second-tier cities and one for third-tier cities. The first- and second-tier group comprises 33 cities, while the third-tier group is made up of 205 cities. The two groups are ranked separately based on economic performance, with an emphasis on growth measurements. Its ranking index for this 2021 version comprises nine indicators— one-year (2018–2019) and five-year (2014–2019) periods growth for jobs, wages, and gross regional product (GRP) per capita; three-year (2016–2019) foreign direct investment (FDI) growth; FDI/GRP ratio (2019); and the location quotient (LQ) for high value-added industry employment (2019). This index categorises Chinese cities into large and small groups to yield more meaningful comparisons and insights.

About the Best Performing Cities China Index

The Milken Institute's Best-Performing Cities (BPC) China Index analyses the latest and most comprehensive official data found in the China City Statistical Yearbook to track the recent economic performance of Chinese cities. The primary purpose of this series is to offer a tool to policymakers to monitor and evaluate the economic dynamics of cities in China and improve their performance. In addition, this work provides businesses with insight into economic trends to explore potential investment opportunities in China.

Milken Institute's Best-Performing Cities China Ranking

Rank	First- and second-tier cities	Rank	Third-tier cities
1	Haikou, Hainan (海南省, 海口市)	1	Chuzhou, Anhui (安徽省, 滁州市)
2	Guangzhou, Guangdong (广东省, 广州市)	2	Fuyang, Anhui (安徽省, 阜阳市)
3	Xi'an, Shaanxi (陕西省, 西安市)	3	Dongguan, Guangdong (广东省, 东莞市)
4	Chengdu, Sichuan (四川省, 成都市)	4	Jiaxing, Zhejiang (浙江省, 嘉兴市)
5	Shenzhen, Guangdong (广东省, 深圳市)	5	Xuancheng, Anhui (安徽省, 宣城市)
6	Shanghai (上海市)	6	Zhuhai, Guangdong (广东省, 珠海市)
7	Wuhan, Hubei (湖北省, 武汉市)	7	Ji'an, Jiangxi (江西省, 吉安市)
8	Beijing (北京市)	8	Bozhou, Anhui (安徽省, 亳州市)
9	Changsha, Hunan (湖南省, 长沙市)	9	Lijiang, Yunnan (云南省, 丽江市)
10	Zhengzhou, Henan (河南省, 郑州市)	10	Maanshan, Anhui (安徽省, 马鞍山市)

About the Milken Institute

The Milken Institute is a nonprofit, nonpartisan think tank that helps 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. For more information, visit https://milkeninstitute.org/.

About the Milken Institute 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 Institute's global network to tackle regional challenges, as well as to integrate the region's perspectives into the development of solutions to persistent global challenges.

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