HEFEI/BEIJING – Hefei is a historical city known as the birthplace of the upright Song dynasty judge Bao Zheng, or Bao Gong, as he is more popularly known.
This city of 9.85 million people, the capital of the agricultural province of Anhui and a one-time backwater, has been making waves in China in recent years as a high-tech production hub and a model for developing new industries. The city was China’s fourth-largest producer of NEVs in 2023. Brands like Nio, BYD and Germany’s Volkswagen produce such cars there.
An autonomous guided vehicle manufactured by Anhui Forklift Group, seen here in a factory setting. JOYCE LIM China met its GDP target with 5.2 per cent growth in 2023, but its 2024 goal of around 5 per cent is widely seen as ambitious, given challenges such as a still-weak property sector and muted domestic consumption.Amid a nationwide push for innovation, Hefei’s success in developing high-tech industries, dubbed the “Hefei model”, is one that other localities in China have been keen to learn from, if not replicate.
The city halted a subway project to invest in the Beijing-headquartered Boe, which built factories in Hefei and is now a world leader in LCD displays. This created for Hefei an industrial cluster in display devices whose annual output exceeds 100 billion yuan. Battery cells being assembled at lithium-ion battery maker Gotion High-Tech’s production facility in Hefei. PHOTO: GOTION HIGH-TECH
Together with other research and engineering institutions in the city, the university also produces a rich pool of talent, which companies say is one of the factors that attract them to Hefei.Even if cities across China channel Hefei in their pursuit of “new quality productive forces”, replicating its success will not be straightforward, analysts say.
Battery-maker Gotion Hi-Tech has a similar problem. Its senior vice-president Wang Qisui sees a shortage not just of experts, but also of blue-collar workers equipped to work in the new energy industry. The country’s overcapacity in its “Big Three” green technologies has been the subject of scrutiny by the United States and the European Union, with the EU launching an anti-subsidy probe in 2023 that could lead to additional tariffs on Chinese electric vehicles exported to the bloc.