Hefei has achieved a dominant lead in GDP growth among Chinese cities. The initial public offering of memory chip giant CXMT, which briefly made it the most valuable A-share company, has thrust the city into the spotlight. Hefei's total A-share market capitalization has surged to nearly 5 trillion yuan, propelling it to fourth place nationally, behind only Beijing, Shanghai, and Shenzhen, and surpassing the likes of Nanjing, Hangzhou, and Suzhou.
A decade of patient and substantial investment has paid off handsomely for Hefei. Reports that CXMT generated 1.1 trillion yuan in income for Hefei's state-owned capital are factual. However, claims that this will directly double Hefei's GDP are a misunderstanding. GDP, or Gross Domestic Product, measures the total value of all final goods and services produced within a region over a specific period. Changes in stock prices or market capitalization do not constitute GDP as they involve no creation of goods or services; only transaction fees like brokerage commissions are counted. Therefore, while stock market fluctuations don't directly impact GDP, the underlying business performance does. The production and increased profits of companies like CXMT, which are counted in GDP, are the real drivers of economic growth. CXMT had forecasted a massive revenue surge, which would significantly contribute to Hefei's first-half GDP.
Hefei's official data confirms this. In the first half of the year, the city's GDP reached 707.3 billion yuan, a year-on-year increase of 6.8% in real terms. This growth rate, 2.1 percentage points higher than the national average, is the fastest among all cities with a trillion-yuan GDP, leading second-placed Wenzhou by a significant 0.8 percentage points. Compared to the same period last year, Hefei's GDP increased by 55.83 billion yuan, ranking 11th nationally in terms of nominal growth. This increase allowed Hefei's first-half GDP to surpass Jinan, setting the stage for a full-year lead. At the end of last year, Hefei's GDP had nearly matched Jinan's, and with its current momentum, surpassing Jinan for the full year seems inevitable.
Surpassing Jinan is Just the Beginning
Hefei's remarkable performance is largely driven by its industrial sector. The city's secondary industry (broadly defined) added 255.24 billion yuan in value, growing by 10.3%. The output of industrial enterprises above a designated size surged by an astonishing 25.6% year-on-year, a record high and the fastest rate among all trillion-yuan cities. Specifically, the computer, communication, and other electronic equipment manufacturing sectors, along with automobile manufacturing, saw value-added growth of 92.5% and 16.0%, respectively. High-tech manufacturing, a key indicator of new quality productive forces, grew by 79.0%, maintaining over 30% growth for twelve consecutive months and now accounting for 41.9% of the city's total industrial output. Production of key products like lithium-ion batteries, industrial robots, and LCD screens soared. According to Hefei's 2025 Statistical Yearbook, the city had three industries with output exceeding 100 billion yuan in 2024: electrical machinery and equipment manufacturing, computer and communication equipment manufacturing, and automobile manufacturing. The computer and communication equipment sector is likely now the leading industry, having grown by 60% in 2025 and 92.5% in the first half of 2026. This booming pillar industry is a core factor behind Hefei's sustained economic leadership.
Exports, another key driver of the economy, have also been surging. Hefei's total import and export value in the first half of the year reached 290.26 billion yuan, a 41.5% increase. Exports alone grew by 51.9% to 216.02 billion yuan. This combination of industrial strength and robust trade has propelled Hefei's GDP growth to the top among trillion-yuan cities and enabled it to overtake Jinan. Concurrently, Anhui province's first-half GDP surpassed that of Hunan for the first time, signaling a potential shift in the future pecking order of provinces. This success story is not an isolated event but part of a longer-term trend. Hefei has been the fastest-rising star among Chinese cities over the past two decades, with its GDP ranking jumping from 46th in 2005 to 19th in 2025, a rise of 27 places. Among provincial capitals, its ranking improved from 16th to 10th, making it the fastest-rising capital city. Over those two decades, Hefei's GDP growth of 1,223% was the highest among all 27 capital cities.
This current cycle of surpassing Jinan is just the beginning. Hefei is expected to sequentially overtake Fuzhou, Zhengzhou, and Changsha to become the 15th largest city in mainland China and the second largest in the central region. This optimism is not solely based on CXMT, which operates in a cyclical memory chip market. The true foundation of Hefei's success is its strategic positioning within the most critical industrial chains of the "hard technology era." The city has successfully built a powerful industrial matrix encompassing display panels, new energy vehicles, artificial intelligence, and memory chips. This stands in stark contrast to cities like Changsha and Zhengzhou. Changsha, for instance, has been criticized for over-investing in its image as a trendy, internet-famous city, neglecting the core driver of urban development: a strong industrial base. In 2025, Hefei's industrial revenue was 1.606 trillion yuan, significantly higher than Changsha's 977.5 billion yuan in 2024. Changsha's industrial sector remains heavily reliant on traditional industries like construction machinery, lacking a strong grip on emerging sectors. While consumer-focused economies can create buzz, true and lasting competitiveness for a city is built on robust industrial chains, innovation capacity, and high-income jobs.
What is the Key to Hefei's Success?
The success of Hefei can be attributed to a combination of timing, effort, strategic vision, and unwavering persistence. No single factor is sufficient without the others. Without the right timing, great effort and vision can be wasted. Without effort, even the best opportunities can be missed. Without a clear vision, it's difficult to choose the right path, where choice is often more important than effort. Without persistence, it's easy to give up halfway, as demonstrated by the decade-long commitment to CXMT.
Beyond these fundamental principles, four key tactical factors in industrial development have been decisive:
First, adhering to long-termism and not easily switching paths once a sector is chosen. Since declaring its "Industrial City" strategy in 2005, Hefei has rarely wavered from developing advanced manufacturing. From the initial focus on new displays to integrated circuits, new energy vehicles, and now quantum technology and commercial aerospace, the city has consistently pursued hard tech rather than chasing short-term trends. Notably, the industries highlighted in government reports over a decade ago—new displays, semiconductors, and new energy vehicles—remain the city's pillars today. This strategic consistency, even through industry downturns, is more critical than any promotional slogan.
Second, the focus is not just on attracting individual companies but on building complete industrial chains. Many cities focus on landing a single major project, but Hefei builds an entire ecosystem around a chain. In 2008, when the city invested a third of its annual fiscal revenue to support Boe Technology Group Co.,Ltd. (then known as a risky investment), the true value wasn't just the capital but the subsequent chain reaction. As Boe Technology Group Co.,Ltd. grew into a global display leader, over 70 upstream and downstream companies followed, creating a world-class display cluster. Later, CXMT drove the semiconductor chain, and NIO galvanized the new energy vehicle chain, with these three chains intertwining to form the city's renowned "Core- Screen- Auto- Integration" industrial ecosystem. The strategy is not "introducing a company" but "cultivating an ecosystem."
Third, using patient capital to invest in the future rather than chasing quick profits. The investments in Boe Technology Group Co.,Ltd. , NIO, and CXMT all shared a common trait: long investment cycles and extremely high risk. Many local governments were hesitant, but Hefei was willing to take the risk. This was not gambling, but a long-term investment based on professional judgment. Hefei has refined its investment mechanisms, from fund-based attraction to industrial funds and now patient capital, insisting on "investing early, small, long-term, and in hard tech." It is willing to support companies through their most difficult years, understanding that truly large-scale industries rarely emerge in a short cycle.
Fourth, letting professionals handle professional matters and allowing the market to play a decisive role. A key, often overlooked aspect is that the government did not attempt to control the industries. Decisions to invest in Boe Technology Group Co.,Ltd. or CXMT were not made by administrative fiat but were based on professional due diligence, expert assessments, and market-oriented fund operations. The government was willing to enter and also to exit. Once Boe Technology Group Co.,Ltd. matured, state capital gradually reduced its stake. After NIO completed its buyback, the government's shareholding decreased, returning the company to the market. The government supports during the crucial early stages but does not overstay its welcome, providing a clear boundary that many other places struggle to establish.
Therefore, what is truly replicable about Hefei is not a single successful investment, but its entire logic of industrial development. It didn't chase fads but adhered to long-termism. It didn't just attract a leader but built an ecosystem. It didn't seek short-term fiscal returns but cultivated patient capital. It didn't let administration replace the market but let professionals do their work. Boe Technology Group Co.,Ltd. , CXMT, and NIO are just the fruits of different stages, supported by a development logic that has remained largely unchanged for over two decades. Today, Hefei is channeling funds into future industries like artificial intelligence, quantum technology, and commercial aerospace. The listing of CXMT is not an end but the beginning of the payoff from this latest round of industrial planning. For a city, the ultimate competitive advantage is not just catching a single wave, but possessing the ability to continuously create the next one.
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