(ECNS) -- Hefei, capital of east China's Anhui Province, has once again made headlines, both for venture capital and its booming population.
In 2024, the city’s permanent population surpassed 10 million, making it the fourth in the Yangtze River Delta, one of China's most economically vibrant regions, to reach this milestone, following Shanghai, Hangzhou, and Suzhou.
In the same year, Hefei’s GDP hit 1.35 trillion yuan (about $190 billion), ranking 19th among Chinese cities.
Once having no major railways due to economic struggles, the city has achieved both a trillion-yuan GDP and a population exceeding 10 million. What has it, known for its strong presence in venture capital, done right? And what development strategy lies behind its success?
Economic expansion and talent influx create a positive cycle for population growth
Hefei is now actively competing with top-tier cities for talent. In 2024, it launched targeted recruitment initiatives in emerging industries, including artificial intelligence, quantum technology, and aerospace information.
To attract top talent, the city dispatched 13 specialized teams to 14 major cities, including Beijing, Shanghai, and Xi’an, engaging with 36 top universities including Tsinghua University and Fudan University.
Increasing talent enter key industries to boost the city’s economy, and growing development continues to attract more.
According to the local government, nearly 90 percent of the city’s new residents in 2024 were from migration, with a net population increase of 131,000, accounting for 87.9 percent of its total permanent population growth.
Venture capital mindset drives industrial growth
Hefei’s rise is closely tied to its strategic investment-driven approach, which has fueled the emergence of new industries and generated significant spillover effects.
In 2008, despite financial constraints, the city made a bold decision to invest in BOE Technology Group, an Internet of Things company, establishing China’s first sixth-generation liquid crystal display panel production line. This move was controversial at the time, but it ultimately transformed Hefei into a national leader in the display industry.
Today, the city hosts over 180 display-related companies, employs nearly 40,000 people, and boasts a fully integrated industrial supply chain.
Building on this success, Hefei continued its investment-driven strategy by attracting CXMT, which manufactures dynamic random-access memory chips, to develop its semiconductor sector.
In the automotive industry, the city placed high-stakes bets on NIO, a Chinese multinational automobile manufacturer, and introduced BYD, accelerating the rapid growth of its new energy vehicle sector.
Hefei’s venture capital logic is straightforward: target strategic emerging industries, make decisive investments at critical moments, and leverage industrial chain expansion to achieve scale effects.
This “investment-led attraction and production” model has not only driven economic growth but also created substantial employment opportunities, solidifying the city’s position as a rising economic powerhouse.
Hefei’s milestone of a trillion-yuan GDP and a 10-million population is not just a marker of urban development but a starting point for even greater ambitions. As the city continues to grow, enhancing public services and maintaining quality of life will become critical challenges that require careful planning and innovation.
More than just reaching milestones, the city’s true success lies in its ability to keep evolving, innovating, and exploring new paths for the future.
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