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A comparative analysis of the world’s top 3 science and technology clusters: Beijing’s performances and strategies

Cloud River Urban Research Institute

Editor’s note:

In September 2022, the World Intellectual Property Organization (WIPO) released the Global Innovation Index report, ranking Tokyo-Yokohama, Shenzhen-Hong Kong-Guangzhou, and Beijing as the top three global science and technology innovation clusters. In response to this, the Counsellor’s Office of the Beijing Municipal People’s Government and the Cloud River Urban Research Institute collaborated to conduct a comparative study titled “Research on the Science and Technology Innovation Performance of the Top Three Global Science and Technology Clusters.” This article, serving as the second abstract of the report, focuses on the performance of Beijing-based companies, and offers policy recommendations, such as promoting the interaction and collaboration between enterprises and research institutions, establishing a global capital market for innovation and startup, and creating the largest international conference center in Asia.

The Global Innovation Index ranks global technology clusters solely based on two indicators: the number of WIPO’s Patent Cooperation Treaty (PCT) patent applications and scientific publication counts. To provide a more comprehensive evaluation of technological innovation activities, this report broadens its indicators to include economic scale, population size, R&D investment, R&D intensity, as well as the quantity and quality of universities. Additionally, this article draws on a series of enterprise evaluation indicators from the “China Integrated City Index” compiled by Cloud River Urban Research Institute. It conducts a comparative analysis of unique enterprise resources and the interaction between research and industry in the three major science and technology clusters.

1. Shenzhen-Hong Kong-Guangzhou has most companies listed on main boards

Publicly listed companies are the most dynamic economic players, and the number of such companies can reflect the comprehensive strength of a city. On Nov.15, 2021, the Beijing Stock Exchange (BSE) was launched. The bourse is China’s third major stock market after the Shanghai Stock Exchange (SSE) and the Shenzhen Stock Exchange (SZSE). The main board of a stock exchange generally serves as a financing market for larger, longer-established, and profitable enterprises.

Shenzhen-Hong Kong-Guangzhou and Tokyo-Yokohama have 1,596 and 1,517 companies listed on the main boards, respectively. In comparison, Beijing has only 447 such, only one-third of the number in the other two science and technology clusters.

2. Beijing has more Fortune 500 companies than Shenzhen-Hong Kong-Guangzhou

According to the 2022 Fortune Global 500 list, Beijing has 56 Fortune 500 companies, more than the other two clusters. The Shenzhen-Hong Kong-Guangzhou cluster has 20. These two clusters collectively account for half of China’s total Fortune 500 companies (145 companies).

The Tokyo-Yokohama cluster has 36 Fortune 500 companies, making up 77% of Japan’s total (47 companies).

The figures above show that among the three major clusters, Beijing has the fewest number of main board listed companies, but it has the largest number of Fortune 500 companies.

3. Tokyo-Yokohama has most listed innovation-driven companies

The Science and Technology Innovation Board of the Shanghai Stock Exchange (STAR Market), the Growth Enterprise Market (GEM) of the Shenzhen Stock Exchange, and the Mothers Market of the Tokyo Stock Exchange are all primarily financing platforms for innovative enterprises. The Tokyo-Yokohama cluster hosts the largest number of innovation-driven enterprises, with 383. The Shenzhen-Hong Kong-Guangzhou cluster comes second with 210, and Beijing has the fewest, with 169.

Figure. A comparison of three major science and technology clusters in terms of number of main board listed companies, number of innovation-driven listed companies, and number of Fortune 500 companies

4. Number of Beijing’s unicorns 12 times that of Tokyo’s

A unicorn is a privately held startup company with a valuation of $1 billion or more. The number of unicorns reflects a city’s ability to attract venture capital. According to a survey by U.S. data provider CB Insights, in 2022, Beijing had 61 unicorns, while the Shenzhen-Hong Kong-Guangzhou cluster had 30. The two clusters together accounted for 54% of China’s total unicorns (168).

Although the Tokyo-Yokohama cluster had only five unicorns, it represented 83% of Japan’s total (6 companies).

From the above figures, it’s evident that among the three major clusters, Beijing had the fewest number of innovation-driven companies listed on innovation board like the STAR Market, but it had most unicorn companies.

5. Beijing hosts many corporate headquarters, but lags behind in R&D expenditure

Beijing accommodates many headquarters of large enterprises, constituting a feature of the Chinese economic landscape. Beijing is home to the largest number of Fortune 500 companies in China and over half of headquarters of China’s centrally-administered state-owned enterprises. However, the R&D investment by the corporate headquarters in Beijing is relatively low.

According to data from the Beijing Municipal Bureau of Statistics, in 2021, among Beijing’s R&D expenditure, 43.2% was for enterprises, 43.6% for government-backed research institutions, and 11.1% for higher education institutions. At the national average level, 76.9% of R&D expenditure went to enterprises, 13.3% government-backed research institutions, and 7.8% higher education institutions. Compared to the national average, a bigger portion of Beijing’s R&D expenditure was channeled to government-backed research institutions and higher education institutions, rather than enterprises.

According to the Global Innovation Index report, in 2021, 13 Chinese companies made their way into the top 50 in the international PCT patent applicant ranking. Among them, Shenzhen had 7 companies, whereas Beijing had only three. It’s intriguing to note that despite Beijing’s appeal to corporate headquarters, the Chinese capital is eclipsed by Shenzhen in the PCT applicant ranking.

Chinese technology giant Huawei has obtained its top position among Chinese companies in the global PCT applicant ranking for five consecutive years. Shenzhen-based companies such as Huawei, ZTE, DJI, and Tencent, are not only big R&D spenders, but also good at commercializing research outcomes. Driven by these enterprises, the Shenzhen-Hong Kong-Guangzhou cluster races ahead in practical science research activities and sees strong interactivity among companies, which significantly propels technological innovation in the region.

6. Drive R&D capabilities of corporate headquarters through policy incentives, facilitate collaboration between enterprises and research institutions

Japan’s experience in promoting collaboration between industry, academia, and government is something that we should look into. The Japanese government takes policy-driven efforts to facilitate cooperation between industry, academia, and government in R&D in crucial sectors. Such efforts are to foster a collaborative R&D framework where businesses and research institutions work together synergistically. This approach not only helps to form a robust “national team” collectively but also allows research outcomes funded by the government to be shared with enterprises, thereby enhancing the overall strength and capabilities of Japanese companies in this field.

Let’s take the development of hydrogen energy in Tokyo as an example. Tokyo has not only actively collaborated with the National Hydrogen Energy Research Base located in Fukushima Prefecture, but also jointly established the “Tokyo Hydrogen Promotion Group” with over 100 organizations including local district governments, universities, associations, and businesses in the city. This initiative aims to strengthen collaboration between industry, academia, and government. While promoting the widespread adoption of hydrogen energy, it also facilitates the cluster-based development of hydrogen-related enterprises.

We suggest that Beijing should mull over measures such as tax adjustments and R&D funding to enhance the exploitation of research outcomes and further drive the development of technological innovation. On the one hand, Beijing should encourage corporate headquarters located in Beijing to enhance their R&D capabilities through policy incentives. On the other hand, the city should promote collaboration and interaction between companies, research institutions, and universities.

7. Establish BSE and ‘New Third Board’ as global capital market for innovation and startup

Among the three major clusters, Beijing has the fewest number of main board-listed companies and innovation-driven listed companies. One of the reasons for this is that Beijing did not have a securities exchange market in the past, while Shenzhen, Hong Kong, and Tokyo all have stock exchanges. The Chinese old saying – “Proximity to water gives an earlier view of the moon” – underscores the significance of capital markets in facilitating enterprise development, and this role should not be underestimated.

Beijing’s top ranking in the number of unicorn enterprises reflects its capacity to attract venture capital. The development of Beijing’s capital market will provide even more opportunities for innovation-driven companies.

Since the establishment of the BSE over a year ago, small and medium-sized enterprises (SMEs) have accounted for 93% of the companies listed on the bourse, while private enterprises have made up 92%. Over 80% of the listed companies are engaged in the strategic emerging industries and advanced manufacturing sectors. The BSE is emerging as a crucial driving force for innovative development in Beijing.

The National Equities Exchange and Quotations (NEEQ), also known as the “New Third Board,” is positioned as a steppingstone for small and promising enterprises to the BSE. Many companies listed on the BSE originated from the NEEQ. By 2022, the NEEQ hosted trading of 6,580 companies with a combined market value of 2.1 trillion yuan, building up a sizable reservoir of companies poised to go public. There were 913 NEEQ-listed companies, 50% more than the combined total of Guangzhou, Shenzhen, and Hong Kong.

We recommend that Beijing should further emphasize the role of the capital market and embrace more inclusiveness and flexibility, and it should effectively utilize the resources from the NEEQ and respect the growth patterns of innovative SMEs. By doing so, the BSE can be developed into the premier financing market for SMEs.

Moreover, Beijing should foster an ecosystem around the BSE consisting of venture capital firms, securities companies, law firms, and other entities dedicated to nurturing the growth of SMEs. This ecosystem will create a high-quality professional service environment, better equipped to support the development and innovation of SMEs.

The BSE can be a complement to stock markets in Shanghai, Shenzhen, and Hong Kong. Positioned to serve innovative SMEs, the BSE can act as a platform to address their financial woes.

We also suggest that Beijing should consider including countries and regions along the Belt and Road route into its capital market and professional services as soon as possible. This will help establish Beijing as an international platform for the development of SMEs.

8. Build largest international conference center in Asia by further opening up

The exchange-based economy, epitomized by the IT industry, has been a potent engine for the innovation and development of cities. Currently, among the top 10 global companies by market value, seven are IT enterprises.

According to the IT industry’s strength ranking in the China Integrated City Index compiled by Cloud River Urban Research Institute, the top 10 cities are Beijing, Shanghai, Shenzhen, Hangzhou, Guangzhou, Chengdu, Nanjing, Chongqing, Fuzhou, and Wuhan.

Ahead of the pack in the IT sector, Beijing accommodates 19% of the national IT workforce, 28.7% of IT companies listed on the main board, 26.4% of IT companies listed on the SME board, and 26.4% of IT companies listed on the GEM.

This report, based on the China Integrated City Index, conducts separate correlation analyses of the manufacturing industry’s strength, IT industry’s strength, and various elements of cities such as transportation hubs, opening up and communication, and leading power. The findings reveal that in terms of urban transportation hubs, the development of the manufacturing industry emphasizes the conditions of container ports, while the growth of the IT industry relies on international airports. Regarding opening up and communication in cities, the development of the manufacturing industry is closely linked to the import and export of goods, whereas the development of the IT industry is linked to international conferences. In terms of a city’s strength, the highest correlation with the IT industry’s development is found in the restaurant and hotel industry, whereas the correlation coefficient between the manufacturing industry and the restaurant and hotel industry is significantly lower. Moreover, in comparison to the manufacturing industry, the strength of the IT industry exhibits notably higher correlations with higher education and medical care industries.

From this perspective, it’s evident that the manufacturing industry places relatively lower demands on education levels and urban services. On the contrary, the IT industry, which represents the exchange-based economy, has higher requirements for these aspects and is closely related to international airports and international conferences, in which the advantage of metropolises in developing the IT industry constitutes.

Based on the analysis above, we suggest giving full play to the advantage of the density of corporate headquarters and the sheer number of universities and research institutions in Beijing. This will promote and guide the exchange of high-caliber individuals and turn Beijing into the biggest center of international conferences in Asia. We suggest using international conferences as driving force for the exchange-based economy, and facilitating the exchange of ideas, technological innovation, content creation, and the upgrade of business models, particularly in innovative sectors like IT. This will cement Beijing’s effort to pursue opening up and innovative development through exchange-based communication and collaboration as an international metropolis.

(The article was written by the Counsellors’ Office of the People’s Government of Beijing Municipality, Cloud River Urban Research Institute)

The article was first published on China SCIO, China.org.cn on Aug. 29, 2023 and reprinted by other news websites.

A comparative analysis of the world’s top 3 science and technology clusters: Beijing’s strengths and weaknesses

Cloud River Urban Research Institute

Editor’s note:

In September 2022, the World Intellectual Property Organization (WIPO) released the Global Innovation Index report, ranking Tokyo-Yokohama, Shenzhen-Hong Kong-Guangzhou, and Beijing as the top three global science and technology innovation clusters. In response to this, the Counsellor’s Office of the Beijing Municipal People’s Government and the Cloud River Urban Research Institute collaborated to conduct a comparative study titled “Research on the Science and Technology Innovation Performance of the Top Three Global Science and Technology Clusters.” This article, serving as an abstract of the report, focuses on exploring Beijing’s distinct characteristics in terms of patent applications, research paper publications, R&D intensity, the quantity and quality of universities, among other aspects. Addressing Beijing’s strong academic research capabilities and comparatively weaker practical abilities, the article also presents recommendations for leveraging practical applications to drive the cluster development of technological and innovative enterprises.

The Global Innovation Index (GII) has been assessing global science and technology clusters since 2017, quantifying the spatial concentration of technological innovation activities. Looking back at the reports from previous years, it’s clear that the Tokyo-Yokohama and Shenzhen-Hong Kong-Guangzhou clusters have consistently held the first and second positions, respectively, in the global science and technology cluster rankings. In contrast, Beijing has moved up from 7th place in 2017 to 3rd place in 2021, maintaining this position in 2022.

To address the fact that the GII relies solely on two indicators- WIPO’s Patent Cooperation Treaty (PCT) patent applications and scientific publication counts – for ranking global science and technology clusters, this report takes a broader approach by incorporating indicators from the “China Integrated City Index” by the Cloud River Urban Research Institute. This comprehensive analysis allows for a more holistic comparison of the top three science and technology clusters and delves into the distinctive features, strengths, and areas of improvement of Beijing’s technological innovation landscape.

1. The top three science and technology clusters demonstrate distinct advantages in patent applications and scientific publications

The ranking of science and technology clusters in the GII report is based on the identification of clusters through the locations of inventors listed in international patent applications and authors of scientific journal articles. In the initial GII report of 2017, the evaluation of global science and technology clusters relied solely on the indicator of patent applications under the PCT. Starting from 2018, the report incorporated the indicator of scientific publication counts from Science Citation Index-Expanded provided by Clarivate, and this approach has been continuing today.

When comparing the performance of the top three science and technology clusters in these two indicators, it becomes evident that each cluster showcases distinct advantages with different focuses.

① Tokyo-Yokohama: More active in patent applications than scientific paper publications

Tokyo-Yokohama demonstrates a significant advantage in PCT patent applications. In 2018, the cluster filed 104,746 patent applications, accounting for 11% of the global total, which was nearly 6 percentage points higher than the second-ranking Shenzhen-Hong Kong-Guangzhou cluster. Although the number of patent applications increased to 122,526 in 2022, maintaining its world-first position, its lead over the second-ranking Shenzhen-Hong Kong-Guangzhou cluster has significantly reduced to 2.5 percentage points.

However, Tokyo-Yokohama’s advantage in scientific paper publications has noticeably declined over the years. In 2018, the cluster published 141,584 scientific papers, accounting for 1.8% of the global total and ranking second worldwide. However, by 2022, the number of scientific paper publications had dropped by 20% compared to 2018, with a global share of 1.6% and a decline in the global ranking to fifth place.

This indicates that Tokyo-Yokohama is more active in patent applications than in scientific paper publications. The interaction between research and industry stands as a pivotal factor supporting this cluster’s position as the world’s premier science and technology cluster.

② Shenzhen-Hong Kong-Guangzhou: Rapid growth in both patent applications and scientific paper publications

The Shenzhen-Hong Kong-Guangzhou cluster has witnessed rapid growth in both patent applications and scientific paper publications. In 2018, the cluster filed 48,084 PCT patent applications, accounting for 5.1% of the global total and ranking second globally. By 2022, the number of PCT patent applications doubled compared to 2018, with a global share of 8.2%, significantly narrowing the gap with the world’s top science and technology cluster, Tokyo-Yokohama.

In terms of scientific paper publications, the cluster only published 40,920 papers globally, accounting for 0.5% of the global total and ranking 32nd in the world in 2018. However, by 2022, the number of scientific paper publications had surged to more than three times that of 2018, with a global share of 1.9%. This accomplishment surpassed Tokyo-Yokohama, propelling the cluster to third position in global ranking.

The Shenzhen-Hong Kong-Guangzhou cluster’s rapid development momentum poses an increasingly significant threat to Tokyo-Yokohama’s position as the leading global science and technology cluster.

③ Beijing: Prominent advantage in scientific paper publications

Beijing stands out with a significant advantage in scientific paper publications. In 2018, the city produced 197,175 scientific papers, representing 2.5% of the worldwide output. This figure is 1.4 times higher than that of Tokyo-Yokohama, securing the top global position. By 2022, Beijing’s scientific paper publications had grown by 24% compared to 2018, accounting for 3.7% of the global share, and maintaining its strong global leadership.

However, Beijing’s performance in patent applications is relatively lower. In 2018, the city submitted 18,041 PCT patent applications, making up 1.9% of the global total and ranking eighth worldwide. By 2022, its global patent application share had increased to 2.8%, elevating its global ranking to sixth.

The robust foundation of numerous prestigious institutions led by the Chinese Academy of Sciences, Tsinghua University, and Peking University contributes to Beijing’s impressive scientific paper output. The consistent growth in scientific paper publications in recent years has significantly enhanced Beijing’s global position within the science and technology cluster.

2. Beijing enjoys the largest administrative area, second-largest population, and smallest economic scale among the three clusters

Among the three major science and technology clusters, Beijing has the largest administrative area, spanning 16,410 square kilometers. This is 1.3 times the size of Shenzhen-Hong Kong-Guangzhou and 6.2 times that of Tokyo-Yokohama.

In terms of population, Shenzhen-Hong Kong-Guangzhou has the largest population, reaching 43.9 million, which is double the population of Beijing and 2.5 times that of Tokyo-Yokohama.

When it comes to economic scale, Shenzhen-Hong Kong-Guangzhou takes the lead with a GDP slightly surpassing that of Tokyo-Yokohama, amounting to 8.55 trillion yuan. In comparison, Beijing’s economic scale is only about half of the former.

Among these three major science and technology clusters, Tokyo-Yokohama boasts the highest per capita GDP at 463,000 yuan, which is 2.4 times that of both Beijing and Shenzhen-Hong Kong-Guangzhou.

Figure 1. A comparison of three major science and technology clusters in terms of administrative area, population and economic scale

3. Beijing demonstrates highest R&D Intensity, yet lags behind in R&D expenditure and personnel

① R&D expenditure: Tokyo-Yokohama takes the lead

Among the three major science and technology clusters, Tokyo-Yokohama boasts the highest R&D expenditure, reaching 529.5 billion yuan. This surpasses Shenzhen-Hong Kong-Guangzhou by 1.2 times and Beijing by double.

Beijing records the lowest total R&D expenditure within this group.

② R&D intensity: Beijing holds the top spot

Due to economic variations, the “R&D expenditure/GDP” ratio, known as “R&D intensity,” is often used to gauge the commitment to research and development.

Among the three clusters, despite having the lowest total R&D expenditure, Beijing claims the highest R&D intensity at 6.5%. This marginally surpasses Tokyo-Yokohama and leads Shenzhen-Hong Kong-Guangzhou by 1.2 percentage points.

③ R&D personnel: Beijing has the fewest

Regarding R&D personnel, there’s a marginal difference between Shenzhen-Hong Kong-Guangzhou and Tokyo-Yokohama, with 643,000 and 629,000 research personnel, respectively.

Beijing employs the fewest R&D personnel, at 473,000, which constitutes about three-quarters of the workforce in the other two science and technology clusters.

④ Per capita research funding for researchers: Beijing still lags behind

When considering per capita research funding for researchers, Tokyo-Yokohama leads with 842,000 yuan, followed by Shenzhen-Hong Kong-Guangzhou with 684,000 yuan, and then Beijing with 556,000 yuan.

Beijing exhibits a marked difference compared to Tokyo-Yokohama, with its figure only amounting to 66% of the latter’s.

Figure 2. A comparison of three major clusters in terms of R&D figures

4.Beijing boasts Asia’s top-ranked universities, but lags in the number of universities and student enrollment

Universities serve as both the cradle for nurturing innovative talents and essential bases for research and development. This report also compares the higher education resources among the three major science and technology clusters.

① University count: Tokyo-Yokohama takes the lead

Among the three clusters, Tokyo-Yokohama has the highest number of universities, totaling 159. This is 1.4 times that of Shenzhen-Hong Kong-Guangzhou and 1.7 times that of Beijing. Shenzhen-Hong Kong-Guangzhou and Beijing have 113 and 92 universities, respectively.

② Enrolled university students: Shenzhen-Hong Kong-Guangzhou takes the lead

In terms of enrolled university students, Shenzhen-Hong Kong-Guangzhou boasts the highest number among the three clusters, reaching 1.702 million. Tokyo-Yokohama ranks second with 851,000 students, while Beijing has the fewest at only 590,000, equivalent to one-third of the number in Shenzhen-Hong Kong-Guangzhou.

③ Beijing houses Asia’s top-ranked universities, but lags in the number of universities making the top 500 World University Rankings

Among the three clusters, Beijing is home to Asia’s highest-ranked universities, yet it falls short in terms of the number of universities featured in the global university rankings.

According to the 2022 Times Higher Education World University Rankings, Tokyo-Yokohama has an impressive 42 universities featured in the top 500 list. In comparison, Shenzhen-Hong Kong-Guangzhou has 16 universities on the list. While Beijing is home to Asia’s top-ranked Tsinghua University and Peking University, it has only 14 universities listed, marking the lowest count among the three major science and technology clusters.

Figure 3. A comparison of science and technology clusters in terms of university figures

5. Beijing: Strong academic research capacity but relatively weak industrial applications

Based on the analysis above, within the three major science and technology clusters, Beijing possesses the fewest resources in terms of R&D personnel, research funding, per capita research funding for researchers, and the number of universities. Nevertheless, it boasts the highest R&D intensity. Beijing’s consistent top position in R&D intensity among the 297 cities of prefecture-level or above in China underscores its substantial commitment to innovation.

Beijing’s another advantage is its abundance of prestigious universities and top-tier research institutions, hosting approximately one-third of the nation’s key national laboratories and nearly half of its academicians.

While Beijing’s dedication to innovation and its abundant scientific research resources place it at the forefront of scientific publication, it’s also making noteworthy progress in PCT patent applications. However, in comparison to the other two major science and technology clusters, Beijing demonstrates relatively weaker interplay between research and industrial application.

6. Application strategy: Driving cluster development of innovative enterprises through widespread technological implementation

Considering the strengths and weaknesses identified in Beijing’s case above, this report recommends that Beijing embark on expansive application initiatives across sectors such as new energy utilization, urban rail transit systems, including tramways, energy-efficient architecture, and digitization. By enhancing the city’s infrastructure and technological prowess through upgrades, Beijing can effectively drive the synergistic growth of innovative enterprises within these realms.

For Beijing, a city with a substantial market, this strategy of generating real-world demand holds immense importance. It not only fosters the conversion of research accomplishments into products and services but also propels the cluster-based development of enterprises.

Taking high-speed railway as an example, Japan pioneered the world’s inaugural high-speed rail system in 1964. The construction and operation of the Shinkansen bullet trains not only facilitated swift economic development but also catalyzed the growth of a multitude of enterprises associated with the Shinkansen network. Likewise, China’s development of high-speed rail has nurtured a thriving high-speed rail economic ecosystem, even expanding its reach beyond national borders. On the contrary, without the deployment of high-speed railway, the U.S. hasn’t managed to ignite growth in related industries within the high-speed rail domain.

The growth of the new energy industry is also closely related to practical applications. Take Tokyo, for example, which is actively carrying out plans for the real-world application of new energy technologies. To address the current electricity supply model involving extensive generation in nearby regions and transmitting it over lengthy distances for consumption in Tokyo, the city aims to shift from the “large-scale centralized power generation + long-distance transmission” paradigm to a “self-generation and self-consumption system.” This transition involves the widespread installation of solar panels on rooftops. This move not only enhances the energy structure and boosts energy efficiency and security but also propels the cluster-based development of enterprises in sectors such as solar energy, hydrogen energy, and digitization.

As Beijing’s power supply structure is similar to that of Tokyo, it is advisable for Beijing to learn from Tokyo’s ongoing policy and institutional attempts in power structure transformation and implements practical solutions involving the application of new energy technologies to reform its power structure.

By practically applying these new technologies, Beijing can effectively transform its innovation resources into new economic drivers. This approach should be a major strategy for Beijing’s innovation-driven high-quality development.

The article was written by the Counsellors’ Office of the Beijing Municipal People’s Government and Cloud River Urban Research Institute

The article was first published on China SCIO, China.org.cn on Aug. 29, 2023 and reprinted by other news websites.

Who are buyers of global top luxury goods?

Cloud River Urban Research Institute

Editor’s note:

Bernard Arnault, chairman and CEO of LVMH group, and Tesla CEO Elon Musk have been in a rivalry for the crown as the world’s richest person. One thing they have in common is that their empires both heavily rely on China, the world’s largest luxury goods market. How do Chinese cities and megalopolises play in the market? How are these cities and megalopolises different from each other when it comes to luxury spending? How does their spending on luxury goods give a peek into their economic development? Cloud River Urban Research Institute uses the Chinese Cities’ Global Luxury Brand Index included in its annual China Integrated Development Index to provide an analysis and explanation.

In the past 20 years, globalization has significantly driven the growth of global wealth, and also led to an exponential increase in the global luxury goods market. The global personal luxury goods market has tripled since 2000. Such a boom has been mostly driven by China’s economy. In 2019, China made up 33% of the global personal luxury goods market. Despite a slight drop during the pandemic, China’s share is expected to reach 40% by 2030.

Ranking of the Chinese Cities’ Global Luxury Brand Index

Cloud River Urban Research Institute complies the Chinese Cities’ Global Luxury Brand Index in its annual China Integrated Development Index. It conducts an index-linked analysis based on the number of stores of 11 luxury brands – Hermes, Louis Vuitton, Gucci, Cartier, Prada, Fendi, Coach, Chanel, Dior, Burberry, and Bulgari – across 297 Chinese cities at prefecture-level and above.

Shanghai, Beijing, Chengdu, Hangzhou, Xi’an, Shenzhen, Tianjin, Chongqing, Shenyang, and Wuhan make the top 10 in the ranking. These 10 cities host a staggering 53.8% of top luxury brand stores in China, with Shanghai and Beijing contributing the most.

At 11th to 30th places are Guangzhou, Dalian, Ningbo, Changsha, Nanjing, Harbin, Taiyuan, Suzhou, Shijiazhuang, Xiamen, Kunming, Changchun, Jinan, Qingdao, Zhengzhou, Guiyang, Hefei, Wuxi, Nanning, and Urumqi.

The top 30 cities are home to 87% of top luxury brand stores in China. These cities are all core cities, except Suzhou and Wuxi. Undoubtedly, core cities such as municipalities directly under the central government, provincial capitals, autonomous region capitals, and cities specifically designated in the state plan are driving force for spending on top luxury goods in China.

According to the ranking, Chengdu, Xi’an, and Chongqing, all cities in western China, take third, fifth, and eighth spots, and other cities in western China like Kunming, Guiyang, Nanning, and Urumqi make their way into the top 30.

Zhou Muzhi, head of Cloud River Urban Research Institute, said their strong showing indicates that cities in western China are big drivers for the growth of the luxury market.

Zhou pointed out that despite its weak economic growth in recent years, the northeastern China region has a strong appetite for luxury goods, as Shenyang, capital city of Liaoning province, claimed the eighth spot, and other cities in the region like Dalian, Harbin, and Changchun have all move into the top 30.

He added that this indicates that once a city’s economy reaches a certain level, its purchasing power for luxury goods is greatly influenced by its cultural traits.

Characteristics of spending on top luxury brands in megalopolises

Spending on top luxury goods varies in different megalopolises. To make a more straightforward analysis of megalopolis development, this article dissects the deviation values for comprehensive evaluation of 10 megalopolises in China, and analyzes the data with a box and beeswarm plot to display differences of deviation values for comprehensive evaluation of the megalopolises.

The horizontal lines inside the boxes represent the medians of the samples, the top of the boxes represent the upper quartiles (75%), the bottom of the boxes represent the lower quartiles (25%), and the spaces inside the box indicate how 50% of the samples distributes. Beeswarm plot is a statistical chart that plots the distribution of individual data points. A combination of a box plot and a beeswarm plot shows the location of each sample and the distribution of the samples as a whole.

As shown in the figure, among the Pearl River Delta, the Beijing-Tianjin-Hebei region, the Chengdu-Chongqing region, the middle reaches of the Yangtze River, the coastal areas of Guangdong, Fujian, and Zhejiang, the Shandong Peninsula, the Central Plains, the Guanzhong Plain, and the Beibu Gulf, the Yangtze River Delta is home to the largest number of luxury brand stores, accounting for 26.8% of the national total. The region also dominates the top 30 ranking. Specifically, Shanghai comes at first, followed by Hangzhou. Ningbo, Nanjing, Suzhou, Heifei, and Wuxi make their way into the top 30.

The Beijing-Tianjin-Hebei region is home to 16.6% of top luxury brand stores in China. Beijing takes second place, Tianjin at seven, and Shijiazhuang at 20th in the ranking.

In the Chengdu-Chongqing region, top luxury brand stores concentrate in Chengdu and Chongqing, accounting for a combined 9.8% of the national total. The figure is a testament to the region’s strong appetite for luxury goods.

Surprisingly, the Pearl River Delta, one of China’s most developed regions, fares not very well in the ranking. Shenzhen only ranked sixth, after Chengdu, Hangzhou, and Xi’an, and Guangzhou drops out of the top 10. The delta makes up only 6.8% of the total number of top luxury brand stores in China, three percentage points lower than the Chengdu-Chongqing region.

Xi’an stands out in the Guanzhong Plain. The city’s good showing – ranking fifth – has helped the region snap up 4.3% of the nation’s top luxury brand stores, slightly higher than the Shandong Peninsula’s 4.1%.

The coastal areas of Guangdong, Fujian, and Zhejiang, the Central Plains, and Beibu Gulf are home to 2.8%, 2%, and 1.8% of top luxury brand stores, which are mostly concentrated in their core cities.

Zhou said that in contrast to northeastern China, the Pearl River Delta, which is a rich region in China, has a weak demand for luxury goods.

Figure. Performances of Global Top Luxury Brands in 10 Chinese Megalopolises

Who are buyers of global top luxury brands

In order to explain the reasons behind the differences in spending on global top luxury goods, this article utilizes the Chinese Cities’ Global Luxury Brand Index to provide a correlation analysis based on the Index and other key indicators of 298 Chinese cities at prefectural level and above, leading to several sets of comparative data.

Correlation analysis is a measure used to analyze the statistical relationship between two variables. The correlation coefficient ranges from 0 to 1, where a coefficient closer to 1 indicates a stronger correlation. A coefficient between 0.9 and 1 is considered “perfectly correlated;” a coefficient between 0.8 and 0.9 is considered “very strongly correlated;” a coefficient between 0.7 and 0.8 is considered “strongly correlated;” a coefficient between 0.5 and 0.7 is considered “correlated; ” a coefficient between 0.2 and 0.5 is considered “weakly correlated;” and a coefficient between 0 and 0.2 is considered “not correlated.”

The analysis found that the correlation between the Index and the manufacturing industry is low, with a coefficient standing at 0.51. In contrast, the Index has a perfect correlation with the financial industry, with a coefficient of 0.95, and has a quite strong correlation with the IT industry, with a coefficient of 0.87.

Zhou said Spending on luxury goods is closely related with the industries that consumers work for, as most manufacturing industry workers have a low pay, while people working for the financial and IT industries are likely to be professionals and well paid.

The correlation between the Index and the number of domestic and international tourists is at 0.52 and 0.54, respectively. In contrast, the Index has a very strong correlation with cinema spending, with a coefficient of 0.88.

Zhou noted that unlike Paris and Tokyo, Chinese cities’ spending on luxury goods is not driven by foreign shoppers. Therefore, the Index chimes with the indicators that reflect endogenous consumption such as cinema spending. It also indicates that neither domestic nor international tourists have become the main force in purchasing top luxury goods in China.

Bernard Arnault, the world’s second-richest man after Elon Musk and chairman of LVMH group, owner of more than 70 brands (including four in the Index), arrived in China for his first visit to the country recently. His visit reinforced the fact that the luxury empire relies heavily on the Chinese market.

Zhou pointed out that China has transformed from an economy driven by “Made in China” single to one driven by “world’s powerhouse” and “world’s market.”

He asserted that the successes of Elon Musk and Bernard Arnault to some extent are attributed to the Chinese market.

In China, the world’s largest auto market, Chinese EV manufacturers represented by BYD have emerged to compete with Elon Musk’s Tesla. How long does it take for China, the world’s largest luxury goods market, give birth to its own top international brands? We will see.

The article was first published on China SCIO, China.org.cn on Apr. 20, 2023 and reprinted by other news websites.

Strength of megalopolis: An evaluation based on China Integrated City Index

Cloud River Urban Research Institute

Editor’s note:

Megalopolis, including the Yangtze River Delta, the Pearl River Delta, the Beijing-Tianjin-Hebei region, and the Chengdu-Chongqing region, are leading China’s social and economic development. How many megalopolises are there in China? How should their development be compared and evaluated? Which one of them is the most developed megalopolis in China? Cloud River Urban Research Institute has tried to comprehensively evaluate the development of megalopolis in China based on its China Integrated City Index.

Megalopolis is a primary embodiment of new urbanization in China. After releasing the China Integrated City Index 2021, Cloud River Urban Research Institute has conducted an all-round examination of the top 10 megalopolis out of the 19 currently planned by the government, and comprehensively evaluated the strength and development of each one of them. The 10 megalopolises — the Yangtze River Delta, the Pearl River Delta, the Beijing-Tianjin-Hebei region, the Chengdu-Chongqing region, the middle reaches of the Yangtze River, the coastal areas of Guangdong, Fujian, and Zhejiang, the Shandong Peninsula, the Beibu Gulf, the Central Plains, and the Guanzhong Plain — involve 173 cities at the prefecture level and above. With a combined population and GDP respectively accounting for 69.9% and 77.7% of the national total, they constitute the most important platform for China’s social and economic development.

Zhao Qizheng, former minister of the State Council Information Office of China, commented that one of the major features of this edition of the China Integrated City Index is a focused analysis of megalopolis, and an effort in line with my long-held expectations for index-based research.

He said megalopolis have already become a primary embodiment of urbanization in China now, with the radiating capacity of the three major ones — the Yangtze River Delta, the Pearl River Delta, and the Beijing-Tianjin-Hebei region — extensively recognized.

He added that through an analysis and evaluation of the comprehensive strength, development differences, and problems of the 10 megalopolises, the China Integrated City Index offers instrumental value on understanding megalopolis policies and urban development.

“I hope it can arouse the attention of leading officials of Chinese cities and sociologists,” he said.

1. Categorization of megalopolis based on Competitive Advantage Index

The 10 megalopolises can be divided into the following three categories by the Competitive Advantage Index (per capita GDP/average national per capita GDP×100): (1) large megalopolis with a Competitive Advantage Index much higher than 100 and strong economic advantages over other regions of the country; (2) megalopolis with a Competitive Advantage Index around 100; (3) megalopolis with a Competitive Advantage Index much lower than 100.

With a Competitive Advantage Index as high as 171, 158, and 124 respectively, the Yangtze River Delta, the Pearl River Delta, and the Beijing-Tianjin-Hebei region fall into the first category. These three major megalopolis account for 36.6% of the country’s total in terms of GDP, and have attracted a large population from all over the country to seek development with their strong economic advantages. Today, they have 31.98 million, 39.09 million, and 9.08 million permanent residents without urban household registration, respectively, comprising the only group of regions with net population inflows among the 10 megalopolises. In particular, only one out of the nine cities in the Pearl River Delta has a net population outflow. In Shenzhen, the most typical city among them, permanent residents without urban household registration account for 66.3% of all its permanent residents.

With long-term inflow of a large population, permanent residents of these three-megalopolis account for as high as 23.5% of the country’s total.

Professor Zhou Muzhi, head of Cloud River Urban Research Institute, noted that there is no doubt that the three major megalopolis, with nearly a quarter of China’s population, are leading the country’s development.

He commented that thanks to young and middle-aged migrants, working population (aged 15-64) accounts for as high as 72.9% and 65.2% of the total population in the Pearl River Delta and the Yangtze River Delta, respectively, and such a population structure injects strong vitality into the two regions.

Notably, the proportion in the Beijing-Tianjin-Hebei region is merely 62%, even lower than the national average of 63.4%.”

With a Competitive Advantage Index around the national average level — 91, 103, 102, and 101 respectively, the Chengdu-Chongqing region, the middle reaches of the Yangtze River, the coastal areas of Guangdong, Fujian, and Zhejiang, and the Shandong Peninsula fall into the second category. But influenced by the strong appeal of the three major megalopolis, these four megalopolises have all seen net population outflows, at 7.23 million, 7.81 million, 3.59 million, and 200,000, respectively.

With a Competitive Advantage Index far lower than the national average level — 69, 68, and 73 respectively, the Beibu Gulf, the Central Plains, and the Guanzhong Plain fall into the third category. The economic gap has led to large population outflows, at 5.21 million, 24.74 million, and 1.69 million, respectively.

2. Interaction between core cities and non-core cities key to development of large megalopolis

The China Integrated City Index covers 297 Chinese cities at the prefecture level and above, and comprehensively evaluates their development from three dimensions — the environment, society, and the economy — with 882 sets of data. The data falls into 27 indicator groups under nine sub-dimensions of the three major dimensions. To make evaluations, the China Integrated City Index uses deviation values to reflect the position of each city relative to other cities of the country in terms of each indicator group, and converts the scale used in various indicator groups to the uniform one to facilitate comparisons. The national average deviation value for comprehensive evaluation, which integrates deviation values in environmental, social, and economic dimensions, is 150.

To make a more straightforward analysis of megalopolis development, this article divides the deviation values for comprehensive evaluation of the 173 cities involved in the 10 megalopolises, and analyzes the data with a box and beeswarm plot to display the distribution and differences of deviation values for comprehensive evaluation of the megalopolis.

According to Figure 1 that shows the median of deviation values for comprehensive evaluation of 10 megalopolis, only two megalopolises, namely the Pearl River Delta and the Yangtze River Delta, exceed the national average, and the Pearl River Delta fares much better than the Yangtze River Delta.

The Yangtze River Delta has most core cities among megalopolis in China, including Shanghai, Hangzhou, Nanjing, Ningbo, and Hefei. Moreover, Shanghai’s comprehensive ranking is second only to Beijing. In contrast, the Pearl River Delta only has two core cities — Guangzhou and Shenzhen — and their comprehensive rankings are both behind Shanghai. The median of the Pearl River Delta is much higher than that of the Yangtze River Delta, because better comprehensive evaluations of non-core cities such as Foshan and Dongguan help to raise the overall level in the region, with only one city in this region registering deviation value lower than the national average. In comparison, 10 cities in the Yangtze River Delta have lower comprehensive evaluations than the national average.

Tang Jie, former deputy mayor of Shenzhen and board member of the Shenzhen Finance Institute of the Chinese University of Hong Kong (Shenzhen), noted that China has entered the era of megalopolis development, where super-large cities and large, medium, and small-sized cities mutually reinforce, forming a new driving force for China’s economic and social development.

Zhou echoed Tang’s opinion, saying that the development of megalopolis is underpinned by the strength of core cities, and that whether they can bring a large number of non-core cities to a higher level of development is an important gauge of their development.

In this regard, the development gap between cities in the Beijing-Tianjin-Hebei region is relatively prominent. Although the region is led by Beijing, which ranks first in the comprehensive ranking, and Tianjin, its median of the comprehensive valuation deviation is only ranked eighth among the 10 megalopolises. Its poor ranking is also due to the poor performance of the region’s another core city Shijiazhuang as well as the fact that the comprehensive evaluations of all non-core cities in the region are below the national average level.

**Figure 1. Comprehensive evaluation of 10 megalopolis in 2021**

3. Inclusiveness and diversity key to cities’ social development

China is experiencing the largest population migration in human history. Among the 10 megalopolises, only the Yangtze River Delta, the Pearl River Delta, and the Beijing-Tianjin-Hebei region have attracted net inflows of population. They are the first-level reservoirs for the large-scale population migration in China’s urbanization, and have absorbed a large number of people from around the country.

Core cities are the second level reservoir for population migration. Among the 23 core cities in the 10 megalopolises, the 10 core cities in the three major megalopolises have experienced net inflows of population. Among the other 13 core cities in the seven megalopolises, 12 have net inflows of population. These core cities have the “siphon effect” on their surrounding areas, attracting a huge mobile population. Only Chongqing, due to its vast territory and large population base, has a net outflow of population.

Zhou pointed out that the influx of a large population has helped 14 of the 23 core cities in the 10 megalopolises grow into megacities with a population of over 10 million. Some megacities with a population of over 9 million, such as Ningbo, Hefei, Nanjing, and Jinan, are playing catch-up and are set to become super large cities in the near future.”

Yang Weimin, deputy director of the Economic Affairs Committee of the CPPCC National Committee, emphasized that the proposal at the 20th CPC National Congress to accelerate the transformation of the development mode of super large and megacities has charted the course for super large and megacities on China’s new journey of building a modern country comprehensively.

He said, first, we need to strike a balance between economic development, well-rounded human development, and sustainable development in terms of space. That means we should not only focus on economic development and urban construction while neglecting comprehensive human development and ecological environment protection. He pointed out that the China Integrated City Index has taken a science-based approach by taking the indicators of economy, environment, and society into account.

He said, second, we need to enhance the inclusiveness and diversity of cities and develop different occupations on an equal footing. Unbalanced development of occupations will increase the cost of living in cities and ultimately damage the development of cities.

The article was first published on China SCIO, China.org.cn on Apr. 20, 2023 and reprinted by other news websites.

Opportunity and challenge: Carbon dioxide emission ranking of Chinese cities

Cloud River Urban Research Institute

Editor’s note:

At a time when carbon peak and neutrality goals have become one of the most important national strategies, all cities are looking for their own paths to it. Cloud River Urban Research Institute released a carbon dioxide emission ranking of Chinese cities based on the latest results of satellite data parsing and geographic information system (GIS) analysis, and Professor Zhou Muzhi, head of the institute, provided Chinese cities an exhaustive “physical examination report” on carbon peak and neutrality strategy by making a category-based analysis of the top 30 emitting Chinese cities.

In 2022, the Russia-Ukraine conflict interrupted global energy supply, as the global coal output abruptly rocketed to a record high of 8 billion metric tons, and the global carbon dioxide emissions also set a new record. At the same time, the development of new energy and new energy vehicles as well as other efforts to reduce carbon emissions are becoming new engines for global scientific and technological and economic progress. A lot of new unicorns in the world last year came from the new energy sector. In Guangdong province in southern China, unicorns in the new energy sector account for nearly 50% of the province’s total new unicorns. New energy vehicles are even more popular. As early as 2020, Tesla surpassed Toyota to become the world’s largest auto maker by market value. BYD surpassed Volkswagen in June last year to become the world’s third largest auto maker by market value. How to pursue high-quality development through energy conservation and emission reduction has become a challenge facing Chinese cities.

1. Carbon dioxide emission ranking of Chinese cities

The 297 cities at the prefectural level and above in China are home to 94.7% of the country’s population and produce 96.6% of its GDP. Therefore, an analysis of their carbon emissions is vital to truly understand China’s carbon dioxide emissions and seek paths to carbon peak and neutrality.

China Integrated City Index compiled by Cloud River Urban Research Institute offers a multidimensional perspective of and insights into the development of all the 297 cities through a multimodal index analysis based on data resources in different fields, including statistical data, big data, and satellite remote sensing data, elevating the research on metropolises to a new level. The institute has also found ways to accurately calculate carbon dioxide emissions of cities through satellite data parsing and GIS analysis, thus enabling a comprehensive and profound analysis of cities’ emissions.

By monitoring and evaluating carbon emissions of the 297 cities, China Integrated City Index unveiled the top 30 emitting Chinese cities in the pre-pandemic year 2019, as shown in Figure 1. The top 10 cities were Shanghai, Beijing, Tianjin, Suzhou, Guangzhou, Tangshan, Harbin, Ningbo, Qingdao, and Chongqing. Their combined carbon emissions accounted for 16.2% of the national total, 1.1 times that of Russia, the world’s fourth largest emitter, and 1.6 times that of Japan, the world’s fifth largest emitter.

Those ranking 11th to 30th were Dongguan, Wuxi, Jinan, Zhengzhou, Xuzhou, Taizhou, Changchun, Zaozhuang, Zhangjiakou, Taiyuan, Baoding, Ordos, Wuhan, Daqing, Nantong, Xi’an, Nanjing, Hohhot, Hangzhou, and Shenzhen.

The total carbon emissions of all the 30 cities made up for 32.6% of the country’s total, 1.3 times that of India, the world’s third largest emitter. That is precisely why an analysis of their carbon emissions matters a lot.

Figure 1 Top 30 Chinese cities in terms of carbon emissions in 2019

**Source: China Integrated City Index 2020 by Cloud River Urban Research Institute**

2. Category-based analysis of top 30 emitting cities

The top 30 emitting cities in China fall into three categories — first, central cities, including municipalities directly under the central government, provincial capitals, and cities specifically designated in the state plan; second, coastal cities with a developed manufacturing sector; third, oil/coal producing cities or cities with developed energy/heavy chemical industries that emit a large amount of carbon dioxide, such as power, and iron and steel. Some cities may fit into more than one category. For example, Shanghai is not only a central city, but also a coastal city with developed manufacturing sector and sizeable energy/heavy chemical industries.

(1) Central cities

There are 36 central cities in China, among which 18 were in the top 30 emitters, namely Shanghai, Beijing, Tianjin, Guangzhou, Harbin, Ningbo, Qingdao, Chongqing, Jinan, Zhengzhou, Changchun, Taiyuan, Wuhan, Xi’an, Nanjing, Hohhot, Hangzhou, and Shenzhen. As economic hubs with a large population and places with high standards of living, these central cities are responsible for a large proportion of the country’s carbon emissions.

The aggregate carbon emissions of the aforementioned 18 central cities accounted for 22.2% of the country’s total, and for all the 36 core cities, the percentage was as high as 30.3%. In this sense, the key for China to achieving carbon neutrality lies in how China’s central cities realize a low-carbon transition first.

（2）Cities with developed manufacturing sector

China Integrated City Index each year evaluates the manufacturing “radiance” strength of Chinese cities. The “radiance” strength is an indicator to gauge a city’s overall influence, and the manufacturing “radiance” strength is the integrated evaluation of a city’s exports and manufacturing industry.

As Figure 2 indicates, the top 30 manufacturing cities were Shenzhen, Suzhou, Dongguan, Shanghai, Ningbo, Foshan, Chengdu, Guangzhou, Wuxi, Hangzhou, Xiamen, Huizhou, Zhongshan, Qingdao, Tianjin, Beijing, Nanjing, Jiaxing, Jinhua, Zhengzhou, Zhuhai, Quanzhou, Shaoxing, Yantai, Changzhou, Xi’an, Taizhou, Nantong, Dalian, and Weihai. Among them, Shenzhen, Suzhou, Dongguan, Shanghai, Ningbo, Guangzhou, Wuxi, Hangzhou, Qingdao, Tianjin, Beijing, Nanjing, Zhengzhou, Xi’an, Taizhou, and Nantong made the list of the top 30 emitting cities. Except Zhengzhou and Xi’an, other cities are all located in the Yangtze River Delta, the Pearl River Delta, and the Beijing-Tianjin-Hebei region.

As the world’s major industrial hubs for global supply chains, these manufacturing cities that are big exporters are also big emitters. Among the top 10 cities in terms of manufacturing, only Chengdu and Foshan didn’t make the list of top 30 emitters, ranking 34th and 43rd, respectively.

The top 10 Chinese manufacturing cities accounted for 12.3% of China’s total emissions, the top 30 accounted for 30.7%. Therefore, these Chinese manufacturing cities face an arduous task of achieving carbon neutrality.

Figure 2 Top 30 cities in terms of manufacturing in 2020

(3) Chinese cities with developed energy/heavy chemical industries

The top 30 Chinese cities by carbon emissions mostly have developed energy/heave chemical industries. This article is aimed to analyze and evaluate these cities based on the index of power generation.

Coal-fired power generation is the leading contributor to carbon emissions. China Integrated City Index uses the indicator of power generation to monitor and evaluate power generation in 297 cities at the prefecture level and above.

As Figure 3 indicates, the top 30 cities in terms of power generation were Yulin, Yichang, Ordos, Binzhou, Suzhou, Yinchuan, Shanghai, Jiaxing, Chongqing, Shenzhen, Fuzhou, Tianjin, Ningbo, Baotou, Yantai, Huainan, Lijiang, Chengdu, Tangshan, Liaocheng, Zhaotong, Yangjiang, Tongliao, Hohhot, Jining, Dalian, Xuzhou, Ningde, and Ya’an. Among them, 10 cities made the list of the top 30 emitting cities, namely ordos, Suzhou, Shanghai, Chongqing, Shenzhen, Tianjin, Ningbo, Tangshan, Hohhot, and Xuzhou, as these cities are also big emitters due to power generation.

Among the top 10 cities in terms of power generation, Yulin, Yichang, Binzhou, Yinchuan, and Jiaxing also made the list of top 100 emitters at 31st, 44th, 78th, and 84th places, respectively, while Yichang, a city that relies heavily on hydro power generation, doesn’t emit much carbon dioxide, despite being a big power generator.

The top 10 Chinese emitting cities accounted for a combined 9% of the nation’s total emissions, the top 30 accounted for a combined 20.9%. From this perspective, China’s quick shift from its reliance on coal-fired power will be critical to the country’s effort to realize carbon neutrality.

Figure 3 Top 30 Chinese cities in terms of power generation in 2020

3. Multiple steps taken to achieve carbon neutrality

From the analysis above, the top 30 emitters in the ranking included Shanghai, Tianjin, and Wuhan, which are populous central cities with developed manufacturing and energy/heavy chemical industries. The top 30 emitters included Shenzhen, Suzhou, Dongguan, Wuxi, Ningbo, Qingdao, and Nantong that have transformed into manufacturing hubs in a short period of time due to their strong exporting industries which can absorb huge populations. They also included Ordos, Zaozhuang, Hohhot and Xuzhou, which have developed into large power bases due to their rich coal resources, Daqing, which relies on petroleum resources to grow into a major petrochemical city, and Tangshan, the largest steel city in the world. The carbon dioxide emissions of Chinese cities are closely related with populations, living standards, urban structures, industrial structures and energy mix. Therefore, Chinese cities should take multiple steps to reach carbon peak and neutrality goals.

In terms of city structures, improving lifestyle, upgrading public transportation systems, enhancing the energy efficiency of buildings will be priorities for Chinese cities to reduce carbon reductions. How to solve problems that have been left in the rapid urbanization process will be the key to Chinese cities’ high-quality development.

In terms of industrial structures, it is necessary to further improve the technological level, energy efficiency, and industrial structure of supercities with a strong manufacturing industry. At the same time, it is also necessary to accelerate the technological revolution of energy and heavy industries, such as electricity, steel and chemical industries, and strive for the realization of low or even zero emissions of energy and heavy chemical industries as soon as possible.

In terms of energy mix, it is necessary to change the energy mix that relies too much on coal resources as soon as possible and expedite the transformation to renewable energy.

It should be noted that energy conservation and emission reductions should not be seen as a negative measure to restrain the economy, but should be a new opportunity for high-quality development. New energy vehicles, batteries and other NEV-related industries have become new engines to drive China’s industrial development. China accounts for more than 80% of the global output of the main links in the photovoltaic manufacturing, such as polysilicon, silicon wafers, cells and modules. China’s installed capacity of renewable energy is growing rapidly, with its installed capacity of hydropower, wind power, and photovoltaic power generation all ranking first in the world.

It is a daunting task and challenge to achieve carbon neutrality by 2060, as Chinese cities need to grope for scientific paths to carbon neutrality, which entails wisdom and unremitting efforts.

(This article is an excerpt from Zhou Muzhi’s paper “China’s carbon emission structure from the perspective of cities: China is still growing while Japan, the U.S. and Europe have peaked,” published in Issue 337 of the Journal of Tokyo Keizai University: Economics in 2023. Researchers at the Cloud River Urban Research Institute Kurimoto Kenichi, Zhen Xuehua, and Zhao Jian contributed to data compilation and graphic production in the article.)

The article was first published on China SCIO, China.org.cn on Feb. 17, 2023 and reprinted by other news websites.

China’s movie market: 2021 and beyond

Cloud River Urban Research Institute

Editor’s note:

How much box office revenues will be generated during this year’s Chinese New Year, which is a traditionally big season for cinemas? Which country had the highest box office revenue in 2021? Which Chinese city had the highest box office revenue? Which Chinese city spent most on movie tickets? How Chinese movies made their way into the global top 10 earners? Based on the “Index of Chinese Cities’ Cinema Spending” included in its annual China Integrated Index, Cloud River Urban Research Institute will to give answers to these questions in detail with illustrations.

1. China continues to be the world’s largest movie market for two years straight

The once hard-hit film industry began to look up in 2021. North America – the U.S. and Canada – saw its box office more than double from $2.2 billion in 2020 to $4.5 billion in 2021. The movie box office in Japan edged up from $1.3 billion in 2020 to $1.5 billion in 2021.

China’s movie market rocketed from $3 billion in 2020 to $7.3 billion in 2021. In particular, movies released during the Chinese New Year holiday earned 7.82 billion yuan, the highest compared with previous holidays, and set new records in the box office in a single market in a single day and the weekend box office.

The COVID-19 pandemic was the biggest factor in the box office. In 2021, U.S. reported 34.644 million infections and 475,000 deaths. In contrast, China logged 15,000 infections and two deaths. Zhou Muzhi, head of Cloud River Urban Research Institute concluded that 2021 was the most successful year for China’s dynamic Zero-COVID policy, as Chinese people went to cinema as normal. In 2021, China’s cinema attendance surged 112.7% from the previous year, and its movie market size was 60% larger than that of North America.

**Figure 1 Top 20 countries/regions by box office in 2021**
Source: produced by Cloud River Urban Research Institute based on the Motion Picture Association’s 2021 THEME Report

2. China’s biggest earners in 2021

Among the 10 highest-grossing movies in 2021 globally, “The Battle at Lake Changjin, ” “Hi, Mom, ” and “Detective Chinatown 3” ranked second, third, and sixth, respectively.

Mamoru Shirai, executive chairman of PIA Global Entertainment Corporation, said China’s movie market expanded rapidly despite the COVID-19 headwinds and that three Chinese movies made the list of the 10 highest-grossing movies in the world, each raking in more than $500 million at the box office.

However, An Ting, chairman of Chicpia, an entertainment company, said that movie, like performance, is kind of art that needs people to watch. Cinemas and theaters are places where audiences are willing to spend. How willing an audience is to spend depends on the quality and influence of a movie. In an environment where people are deluged with a vast body of visual and acoustic information, the movie industry has to figure out ways to stand out and turn people who watch to people who appreciate.

A remarkable thing was that the revenues of the three blockbusters almost came from the Chinese market. Zhou said, the fact that the sole Chinese market catapulted these movies into the top echelon demonstrated the sheer size of the Chinese market and domestic productions’ dependence on the home turf. How to make inroads into the global market is a challenge facing Chinese movie productions. Japan, Australia and New Zealand only contributed a meager 0.3% of revenues of “Detective Chinatown 3.”

Mamoru said he hoped Chinese filmmakers would present global audiences with blockbuster films, including world-class animation films.

China is a colossal market for foreign movies. For instance, “Fast and Furious” at fifth place and “Godzilla vs Kong” at eighth place raked in $220 billion and $190 million in the Chinese market, representing 29.9% and 40.1% of their global box office, respectively.

The lure of the Chinese market has prompted Hollywood producers to infuse Chinese elements into their productions. At the same time, Chinese directors, Chinese actors, as well as Chinese investors have actively participated in the making of Hollywood movies. Chinese companies, for instance, were involved as investors in Oscar-winning movies “The Revenant” and “Green Book.” Zhou said such international exchanges have played a big role in enhancing the quality of Chinese movies.

**Figure 2 Top 10 movies by box office**
Source: produced by Cloud River Urban Research Institute based on data offered by Box Office Mojo, a U.S. website that tracks box-office revenue

3. Which Chinese city tops box office?

Cloud River Urban Research Institute annually released the “Index of Chinese Cities’ Cinema Spending” for 297 Chinese cities at prefecture level and above, drawing on its annual China Integrated City Index.

Shanghai, Beijing, Shenzhen, Chengdu, Guangzhou, Chongqing, Hangzhou, Wuhan, Suzhou, and Changsha made the top 10. Changsha replaced Xi’an to take the 10th spot. Places from 11th to 30th were Xi’an, Nanjing, Zhengzhou, Tianjin, Dongguan, Foshan, Ningbo, Hefei, Wuxi, Qingdao, Shenyang, Kunming, Wenzhou, Nantong, Nanchang, Fuzhou, Jinan, Jinhua, Nanning, and Changchun.

Cinema attendance in most Chinese cities doubled as the pandemic was brought under control and people’s life returned to normal in China in 2021.

**Figure 3 Top 30 cities in the “Index of Chinese Cities’ Cinema Spending”**
Source: produced by Cloud River Urban Research Institute based on its annual China Integrated Index

4. Cinemas cluster in certain Chinese cities

The data of the “Index of Chinese Cities’ Cinema Spending in 2021” indicates that certain Chinese cities are a magnet for the film market.

The top five cities by cinema numbers accounted for 12.6% of the national total in 2021, the top 10 cities 20.9%, and the top 30 cities 39.4%. That means the top 10 cities contributed one fifth of the country’s cinema resources, and the top 30 cities contributed nearly 40%. The concentration of national cinema resources remained almost the same as the previous year.

The top five cities in terms of cinema attendance accounted for 16.9% of the national total, the top 10 cities 27.4%, and the top 30 cities contributed a staggering 48.9%. That means the top 10 cities made up nearly one third of cinema attendance nationwide and top 30 cities nearly half of the national total.

Zhou pointed out that compared with cinema numbers, cinema attendance is more likely to concentrate in certain cities. However, he also noted that as cinema attendance increased in some cities, the concentration rate of per capita cinema attendance fell slightly from the previous year.

The top five cities in terms of cinema spending accounted for 19.7% of the national total, the top 10 cities 30.1%, and the top 30 cities 51.1%. That means the top 10 cities generated one third of the nation’s box office and the top 30 cities contributed more than half of the nation’s total box office. The concentration rate of box office in China dropped slightly from 2020 levels.

Mamoru noted that the concentrations of cinema attendance and box office shows the emergence of markets in other Chinese cities and points to enormous potential of the Chinese movie market.

5. A glance at traits of Chinese cities

The data of the “Index of Chinese Cities’ Cinema Spending in 2021” also reflects differences among Chinese cities in cinema spending.

The top 10 cities in terms of box office were Shanghai, Beijing, Shenzhen, Chengdu, Guangzhou, Chongqing, Hangzhou, Wuhan, Suzhou, and Changsha.

The top 10 cities in terms of cinema attendance were Shanghai, Beijing, Chengdu, Shenzhen, Guangzhou, Chongqing, Wuhan, Hangzhou, Suzhou, and Xi’an.

The top 10 cities in terms of per capita cinema attendance were Zhuhai, Wuhan, Hangzhou, Nanjing, Shenzhen, Shanghai, Beijing, Haikou, Guangzhou, and Changsha.

The top 10 cities in terms of per capita box office were Beijing, Shanghai, Shenzhen, Hangzhou, Zhuhai, Nanjing, Wuhan, Guangzhou, Sanya, and Haikou.

Zhou suggested that the set of indexes honestly and interestingly reflects traits and personalities of Chinese cities.

The article was first published on China SCIO, China.org.cn on Feb. 1, 2023 and reprinted by other news websites.

China changes global economic landscape amid COVID-19

Cloud River Urban Research Institute

Editor’s note:

What does the global economy look like under the COVID-19 pandemic? Which country enjoys the fastest economic recovery? What’s the relationship between epidemic control and economic development? Cloud River Urban Research Institute answers these questions as it looks into the figures of major countries as well as Chinese cities.

1. China is changing the world landscape with its continued economic development

In 2021, the world economy recovered sharply from the slump caused by COVID-19, registering a 6% growth rate in its total GDP.

Figure 1. Top 30 countries/regions by GDP in 2021

As Figure 1 shows, the top 10 countries by nominal GDP in 2021 were the U.S., China, Japan, Germany, Britain, India, France, Italy, Canada and South Korea. Amid global economic rebound in the second year of COVID-19, the nominal GDP of the top 10 countries registered an average growth rate of 5.7%. Notably, China and India recorded a GDP growth of over 8%.

The world in 2021 witnessed three waves of COVID-19 outbreaks. At the beginning of the year, COVID-19 that has spread across the world since 2020 seems to be slowing down. However, the Delta variant of the virus began to spread further across the world as the pandemic reached its first peak in April and second wave of peak in August. Though the virus seemed to be subsiding afterwards, the new Omicron variant identified in South Africa has sparked explosive growth in new confirmed cases. As a result, the total number of infections around the world reached 210 million in 2021, including 2.56 million killed by the disease, bringing the mortality rate to 1.7%, which was slightly lower than 2.2% in 2020. In 2021, China successfully controlled the pandemic thanks to its dynamic zero-COVID policy. Last year, China controlled the total number of COVID-19 infections below 15,000, with only 2 deaths reported, bringing the mortality rate of COVID-19 in the country to 0.01%.

“Faced with complex and severe world situations and challenges from the COVID-19 pandemic in 2021, China coordinated epidemic control and economic development as the country’s economy continued to recover,” Ming Xiaodong, former first-level inspector of the Department of Development Planning of the National Development and Reform Commission and former minister-counsellor of the Chinese Embassy in Japan. “The country managed to meet its development target with its total GDP surpassing 110 trillion yuan.”

Professor Zhou Muzhi, head of Cloud River Urban Research Institute, said China’s data in epidemic control and its economic figures have proved the success of the country’s dynamic zero-COVID policy. Since 2020, China has been changing the global economic landscape with its continued growth.

Figure 2. World nominal GDP from 1990 to 2021 and China’s share

As Figure 2 shows, the world nominal GDP increased by 3.1 times from 1990 to 2021. During the period, the nominal GDP of the U.S. grew by 2.9 times. In the past 30 years, the U.S. maintained an economic growth rate similar to that of the global economy. In 2021, the U.S. accounted for 23.7% of the global GDP.

Compared to the U.S., China has witnessed leapfrog development over the same period. In 2021, China’s nominal GDP was 43.7 times that of 1990, bringing China’s share in the global economy from 1.7% in 1990 to 18.3% in 2021.

“China’s continued economic growth has made the country a major economy nearly compatible to the U.S.,” said Zhou. “In 2021, China and the U.S. together accounted for 42% of the world economy, a share similar to the rest of the top 25 countries combined.”

2. The top 10 Chinese cities in terms of GDP

In 2021, the top 5 Chinese cities in terms of GDP were Shanghai, Beijing, Shenzhen, Guangzhou and Chongqing as they enjoyed an overwhelming lead compared to other cities. They were followed by Suzhou, Chengdu, Hangzhou, Wuhan and Nanjing.

According to Ming, the top 10 cities in terms of GDP in 2020 all secured their places in 2021, and they all demonstrated new features such as accelerated growth, regional coordination and increased share in the overall economy of the country. In terms of growth rate, the top 10 cities rebounded from the relatively slow growth of below 4% in the year earlier. Except for Shenzhen and Nanjing, which reported a growth rate of around 7%, other eight cities all grew by over 8%, providing a solid foundation for the stable and rapid growth of the country’s overall economy. Notably, the city of Wuhan had managed to balance development and epidemic control and made up for the losses due to the pandemic as it reported a stunning growth rate of 12.2%, compared to a slump of 4.7% in the year earlier.

3. Improved economic status of Chinese cities

Although Tianjin and Chongqing, both municipalities under the direct control of the central government, enjoy unique advantages in terms of the size of population, the total area under their jurisdictions and strong transportation network, first-tier cities like Shenzhen and Guangzhou have already surpassed the two cities with their economic size on par with Beijing and Shanghai, another two first-tier cities.

How do we understand the economic strength of the four first-tier cities? Zhou said, “In 2021, Shanghai’s economic size surpassed that of Sweden, the world’s 24th, Beijing surpassed Belgium, the world’s 25th, Shenzhen surpassed Nigeria, the world’s 32nd, and Guangzhou surpassed Egypt, the world’s 33rd.”

Ming said, “The top 10 Chinese in terms of GDP are home to the country’s industrial innovation, shoulder key missions of building a modern economic system and upgrading regional economic structure, and are key players of international competition and cooperation. In the Chinese path to modernization, they are set to lead other cities in achieving high-level and high-quality development.”

4. Central cities and manufacturing hubs drive China’s economic growth

Thirty-six central cities, including four municipalities directly under the central government, 22 provincial capitals, five autonomous region capitals, and five cities specifically designated in the state plan, made their way into the GDP rankings of 297 Chinese cities at and above prefecture level. Central cities had a dominant position in the ranking, with nine such cities in the top 10 and 19 in the top 30.

Figure 3. Top 30 Chinese cities by GDP

Manufacturing hubs are another driving force of China’s economic growth. Among the top 30 Chinese cities by GDP, 11 non-central cities, namely Suzhou, Wuxi, Foshan, Quanzhou, Nantong, Dongguan, Changzhou, Yantai, Tangshan, Xuzhou, and Wenzhou, are all manufacturing hubs in the coastal area.

Zhou pointed out that it is these manufacturing hubs that have placed China into the center of the global supply chain.

5. Concentration and Coordination

The GDP concentration can mirror the importance of central cities and manufacturing hubs. In 2021, the top 10 cities combined accounted for 23.2% of the national total, and the top 30 combined accounted for 42.8%. The top 10% of 297 Chinese cities at and above prefecture level made up more than 40% of the national wealth.

With big cities being the main contributors to China’s economy, the GDP concentration in China’s eastern region is declining. Ming Xiaodong explained that, “From the perspective of regional coordination, the growth rate of the top 10 cities by GDP reflects a pattern where eastern China has played the leading role, central China has emerged, and western China has implemented the large-scale development strategy. Seven cities in eastern China, including Shanghai, have experienced rapid economic recovery, with the economy of China’s top three cities – Shanghai, Beijing and Guangzhou – growing at a rate more than 5 percentage points higher than the previous year. The economy of Wuhan in central China has also rallied, with its growth rate more than 10 percentage points higher than the previous year. Chongqing and Chengdu in western China experienced a steady economic recovery, with the growth rate more than 4 percentage points higher than the previous year. The economic growth of these cities has played a key role in narrowing the gap between western and eastern China and enhancing regional development coordination. The per capita GDP ratio of eastern to central and western China decreased from 1.69 and 1.87 in 2012 to 1.53 and 1.68 in 2021.

6. Three city clusters come to the fore

Cities in the Pearl River Delta, the Yangtze River Delta, and the Beijing-Tianjin-Hebei region dominated the rankings, taking 18 out of the top 30 spots.

Zhou said, the dominance is a result of the concentration of manufacturing hubs in the three city clusters. The Yangtze River Delta and the Pearl River Delta, in particular, have created the most powerful industrial concentration of the global supply chain.

Ming gave a further explanation: Beijing, Shanghai, Suzhou, Hangzhou, Nanjing, Shenzhen, and Guangzhou registered a GDP of 4 trillion yuan, 4.3 trillion yuan, 2.3 trillion yuan, 1.8 trillion yuan, 1.6 trillion yuan, 3.1 trillion yuan, and 2.8 trillion yuan, respectively. Their contribution to China’s GDP increased to 17.4%, cementing their role in high-quality development.

Ming also asserted that GDP of Chongqing, Chengdu, and Wuhan in central and western China was 2.8 trillion yuan, 2 trillion yuan, and 1.8 trillion yuan, respectively, with their GDP combined accounting for 5.7% of the national total. The development of these cities has greatly enhanced the comprehensive carrying capacity and the ability of optimal resource allocation of central cities, and given better play to their roles in regional development.

Xu Lin, deputy head of Cloud River Urban Research Institute and a former official at the National Development and Reform Commission, commented that the research on global and Chinese cities’ economic development and pandemic response conducted by Zhou and his team demonstrated China’s success in economic recovery while containing the spread of the pandemic in 2021. China not only maintained a robust economy but also kept COVID-19 infections and deaths low. Xu hopes China can continue its winning streak in its control of the Omicron variant, with its science-based prevention and control measures better bolstering economic growth across Chinese cities.

The article was first published on China SCIO, China.org.cn on Dec. 5, 2022 and reprinted by other news websites.

An analysis of Chinese cities’ airport convenience

Cloud River Urban Research Institute

Editor’s note:

How hard was China’s air transportation battered by the COVID-19 pandemic? Which Chinese city has the most airport convenience? Which industry relies most on air transportation? Cloud River Urban Research Institute draws on the index of airport convenience included in its China Integrated City Index to answer these questions in detail with illustrations.

Air travel takes a nose dive in 2020, but air cargo doesn’t

The COVID-19 pandemic that emerged in 2020 forced countries to close their borders, and thus the air transportation industry suffered from an unprecedented blow. Affected by restricted international travel and city lockdowns in the first half of 2020, the number of China’s air travelers slumped by 36.6% in 2020. Fortunately, China’s airline sector began to look up shortly after the pandemic was swiftly brought under control in the country. Compared with its Western counterparts, China’s airline industry suffered a smaller decrease in the number of air travelers.

Against the sharp loss in air travelers, China’s air cargo only slipped by 6% in 2020. This shows that despite COVID-19, China’s logistics sector was still brisk and manufacturing supply chains recovered quickly.

Which Chinese city has the most airport convenience?

The transportation hub function is crucial to a city and can strengthen and amplify other hub functions of a city. The China Integrated City Index, compiled by Cloud River Urban Research Institute, uses the index of airport convenience to analyze and evaluate airports in 297 Chinese cities at prefecture level and above.

Airport convenience is an index based on the airport capacity and the distance between the urban hub and the airport, taking account into the number of airport passengers, the volume of air cargo, the number of flights, punctuality rates, and the number and the length of runways.

As shown in Figure 1, the top 10 cities by airport convenience in 2020 were Shanghai, Beijing, Guangzhou, Shenzhen, Chengdu, Chongqing, Kunming, Xi’an, Hangzhou, and Xiamen, which are all central cities. The rankings remained the same as they were in 2019.

Eleventh to 30th places were taken by Zhengzhou, Nanjing, Haikou, Guiyang, Changsha, Qingdao, Tianjin, Sanya, Shenyang, Wuhan, Urumqi, Harbin, Dalian, Ji’nan, Nanchang, Taiyuan, Ningbo, Hohhot, Lanzhou, and Nanning, which are all central cities except resort island Sanya.

Zhou Muzhi, head of Cloud River Urban Research Institute, pointed out that the rankings show that China’s air transportation concentrates mainly in the Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Pearl River Delta. Air transportation is the most important transportation infrastructure to prop up the development of inland hub cities such as Chengdu, Chongqing, Kunming, and Xi’an. Chinese cities with abundant tourism resources moved up in the ranking in 2020 as they became destinations for domestic travelers when the pandemic interrupted international travel.

Figure 1 Top 30 cities by airport convenience in 2020

Airport functions gravitate toward central cities

The top five cities in the rankings accounted for a combined 28.1% of the nation’s total airport passengers, the top 10 accounted for 45.5%, and the top 30 accounted for 77.4%. This shows China’s air transportation concentrates in these high-ranking central cities.

Figure 2 Concentration of airport passengers in Chinese airports in 2020

Moreover, the top five cities in the rankings accounted for a combined 56.8% of the nation’s air cargo, the top 10 accounted for 70.6%, and the top 30 accounted for a staggering 91.7%. A noteworthy thing is that among these cities, Shenzhen, Hangzhou, Zhengzhou, Nanjing, Changsha, Ji’nan, and Nanchang saw their air cargo volumes go up instead of down in spite of the pandemic.

Zhou concluded that compared with air passengers, air cargo is more likely to concentrate in central cities.

Figure 3 Concentration of air cargo in Chinese cities in 2020

Correlation between IT industrial development and airport convenience

Cloud River Urban Research Institute looks at how the manufacturing industry and the IT industry correlate with airport convenience, container port convenience, and railway convenience in 297 Chinese cities at prefecture level and above.

Container port convenience correlates most with the strength of the manufacturing industry with a ratio of 0.65. This explains why the manufacturing industry largely concentrates in coastal areas that are better served by ports. In contrast, the manufacturing industry correlates weakly with airport convenience, with a ratio of 0.48.

In contrast, the IT industry correlates strongly with airport convenience, with a ratio of 0.65.

Zhou suggested that air transportation not only underpins the global supply chain, but also makes it possible that people can travel through space. He also added that the development of the IT industry, a kind of exchange economy, requires people-to-people exchanges that entail the support of air transportation.

The article was first published on China SCIO, China.org.cn on Sep. 6, 2022 and reprinted by other news websites.

A look at the manufacturing strength of Chinese cities

Cloud River Urban Research Institute

Editor’s note:

Which country is the biggest exporter globally? Which Chinese city has the strongest manufacturing strength? How does the global supply chain correlate with deepwater ports? Where are China’s exporting industries concentrate? Cloud River Urban Research Institute uses its China Integrated City Index to answer these questions in detail.

China’s export stages a quick rally in the second half of 2020

The year 2020 is a special year marked by the outbreak of COVID-19 and excalating China-U.S. trade frictions. The two had a huge impact on the global trade, as global exports slumped by 7.2% in 2020 from the 2019 level.

The dual pressure dealt a huge blow to China’s exporting indutries, leading to negative growth of China’s exports in the second half of 2020. Forutunately, with the epidemic brought under control in the country, its export rebounded in the second half of the year. Throughtout 2020, China’s export bucked the trend to realized a 3.6% growth rate while other major trading countries suffered a decline.

Figure Top 30 countries/regions in terms of exports in 2020

Figure 1 shows that China dominated the list of the global largest exporters in 2020. The top 10 exporters were China’s mainland, the U.S., Germany, the Netherlands, Japan, China’s Hong Kong, the Republic of Korea (ROK), Italy, France, and Belgium. Among them, only China and China’s Hong Kong realized positive growth.

Zhou Muzhi, head of Cloud River Urban Research Institute, commented that their growth signified the success of China’s zero-COVID policty on one hand, and demonstrated the strong resilience of China’s industry clusters serving the global supply chain on the other hand.

The first-place China’s mainland and the sixth-place China’s Hong Kong combined accounted for 17.8% of global exports, 2.2 times that of the U.S.

Which Chinese city has the biggest manufacturing radiating strength?

Based on China’s Integrated City Index, Cloud River Research Institute looks at the “manfuactring radiating strength” of 297 Chinese cities above prefecture-level and above. The “manfuactring radiating strength” is an indicator in a broad sense to measure a city’s exporting prowess and its payroll in the manufacturing sector.

Figure 2 Top 30 Chinese cities in terms of the manufacturing radiating strength in 2020

The top 10 cities in the rankings of the manfuactring radiating strength in 2020 were Shenzhen, Suzhou, Dongguan, Shanghai, Ningbo, Foshan, Chengdu, Guangzhou, Wuxi, and Hangzhou. These cities, excluding Suzhou, Dongguan, and Wuxi, registered positive growth in their export at varying rates.

Zhou pointed out that six cities in the top 10, namely Shenzhen, Suzhou, Dongguan, Ningbo, Foshan, and Wuxi, barely had an industrial foundation before China’s reform and opening-up policy was launched, and used to be normal middle and small-sized cities. Shenzhen was once a small fishing village. Their rapid growth into big cities for global trade in merely a few decaded is explained by expanding global supply chains.

China’s exporting industries are mainly concentrated in its manufacturing centers

Figure 3 shows that the top five cities in the ranking combined accounted for 32.5% of Chin’s total exports, the top 10 cities combined 44.2%, and the top 30 cities combined 71.7%.

Zhou said, these top-ranking cities are reckoned to be super manufacturing cities even in the world, and China’s exporting industries mainly cluster in these cities.

Figure 3 Concentration of exports in Chinese cities in 2020

The key role of deepwater ports

The top 10 cities in the rankings of the manufacturing radiating strength of Chinese cities, with Chengdu excluded, have large container ports.

Zhou concluded that that container shipping and deepwater ports are cruicial to the global supply chain, and therefore the industries serving the global supply chain mainly cluster in the areas with deepwater ports. Hence, exporting industries and container shipping are closely interconnected.”

In 2020, the container throughput of China’s mainland topped the world, accounting for 30.1% of the global total. In the ranking of global container terminals, China’s mainland at first place and China’s Hong Kong at 10th place combined outnumbered the other 10 countries in the top 12, namely the U.S., Singapore, the ROK, Malaysia, Japan, the UAE, Türkiye, Germany, Spain, and India.

Zhou explained that a container throughput is a gauge of the activity of the global supply chain, and Chian’s dominance in global container throughput underlines its core position in the global supply chain.

Cloud River Research Institute observed the correlation between the manufacturing radiating strength of 297 cities and their urban transit hub functions. Figure 4 shows that the manufacturing radiating strength most closely correlates with the convenience of container ports with a rate of 0.65. In contrast, the manufacturing radiating strength loosely correlates with railway convenience and airport convenience, with rates of 0.62 and 0.48, respectively. The correlatin study reinforces Zhou’s comments.

Figure 4 Correlation between the manufacturing radiating strength of Chinese cities and their urban transit hub functions

China’s three city clusters lead the development of its exporting industries

In terms of big city clusters, the Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Pearl River Delta accounted for 5.4%, 36.6%, and 23.1% of the national total exports, respectively. They combined accounted for a staggering 65.1%.

Zhou conclude that three city clusters, expecially the Yangtze River Delta and the Pearl River Delta, are the engines of China’s exporting industries and also the places where the global supply chain is most buoyant.

Figure 5 Map of top 30 cities in terms of the manufacturing radiating strength

The article was first published on China SCIO, China.org.cn on Sep. 6, 2022 and reprinted by other news websites.

A close look at China’s film market by cities

Cloud River Urban Research Institute

Editor’s note:

Which country has the world’s largest film market? Which Chinese city spends most on movie tickets? Which Chinese city has the most theater visits? Who reshaped the business model of the film industry amid COVID-19? Which Chinese movies are top box office earners worldwide? In the following article, Cloud River Urban Research Institute will use the “Index of Chinese Cities’ Theater Spending” based on its annual China Integrated City Index to answer these questions.

**Posters of the Chinese movies that led the box office worldwide in 2020**

China emerges as world’s biggest film market

The film industry was one of the hardest hit sectors in the COVID-19 pandemic. China’s box office earnings plunged 68.2% in 2020, as its film market was battered by the coronavirus. Fortunately, after the epidemic was swiftly brought under control in China, its film market staged a strong rally.

Failing to effectively contain the virus, North America – the U.S. and Canada – the long-term biggest movie market in the world, saw its box office plummet by a whopping 80.7% in 2020, and for the first time was dethroned by China, where theater attendance returned the fattest in that year.

Unlike the previous year’s gloom, China’s total box office during the Spring Festival in 2021 hit a record 7.82 billion yuan (US$1.15 billion), setting a few new records, such as the world’s single day box office in a single market and the world’s weekend box office in a single market.

Which Chinese city tops box office?

Cloud River Urban Research Institute released the “Index of Chinese Cities’ Theater Spending” for 297 Chinese cities at prefecture level and above, drawing on its annual China Integrated City Index.

Shanghai, Beijing, Shenzhen, Guangzhou, Chengdu, Chongqing, Hangzhou, Wuhan, Suzhou, and Xi’an made the top 10. Except Suzhou, these cities are either municipalities directly under the central government, or provincial cities and cities specifically designated in the state plan.

Places from 11th to 30th were occupied by Zhengzhou, Nanjing, Changsha, Dongguan, Tianjin, Foshan, Ningbo, Hefei, Wuxi, Shenyang, Kunming, Qingdao, Wenzhou, Nantong, Nanchang, Changchun, Shijiazhuang, Harbin, Jinan, and Nanning, almost all of which are central cities.

Professor Zhou Muzhi, head of Cloud River Urban Research Institute, concluded that central cities that young people gravitate to as well as manufacturing hubs such as Suzhou, Dongguan, Foshan, and Wuxi are main sources of China’s box office.

Figure 1 Top 30 Chinese cities by theater spending in 2020

Film markets cluster in certain Chinese cities

The data of the “Index of Chinese Cities’ Theater Spending in 2020” backs Zhou’s conclusion that certain Chinese cities are a magnet for the film market.

The top five cities by theater numbers accounted for 12.6% of the national total, the top 10 cities 10 21%, and the top 30 cities 39.3%. That means the top 30 cities, only one tenth of all Chinese cities at prefecture level and above, contributed nearly 40% of the country’s theater resources.

Figure 2 Concentrations of theaters by Chinese cities in 2020

The top five cities in terms of theater trips accounted for 17.9% of the national total, the top 10 cities 28.9%, and the top 30 cities 51.3%. That means the top 30 cities were responsible for more than half of theater trips nationwide. Compared with theater numbers, theater trips are more prone to gravitate to these top 30 cities.

Figure 3 Contributions of Chinese cities to theater trips in 2020

The top five cities in term of theater spending accounted for 21.1% of the national total, the top 10 cities 32.1%, and the top 30 cities 53.9%. That means the top 30 cities generated more than half of the nation’s box office. From this perspective, the box office is more prone to cluster in these cities compared with theater numbers and theater trips.

Zhou explained that these top 30 cities are not only main hosts of Chinese theaters, but also main sources of China’s box office due to their sheer populations of moviegoers.

Figure 4 Contributions of Chinese cities to box office in 2020

The index also reveals the following sets of data.

The top 10 cities in terms of box office were Shanghai, Beijing, Shenzhen, Guangzhou, Chengdu, Chongqing, Hangzhou, Wuhan, Xi’an, and Suzhou.

The top 10 cities in terms of theater trips were Shanghai, Beijing, Chengdu, Guangzhou, Shenzhen, Chongqing, Wuhan, Hangzhou, Xi’an, and Suzhou.

The top 10 cities in terms of per capita theater trips were Shenzhen, Zhuhai, Haikou, Hangzhou, Nanjing, Changsha, Wuhan, Guangzhou, Shanghai, and Xi’an.

The top 10 cities in terms of per capita box office were Shenzhen, Beijing, Shanghai, Hangzhou, Zhuhai, Guangzhou, Nanjing, Haikou, Changsha, and Lhasa.

It is particularly noteworthy that during the epidemic, numbers of screens and theaters in China increased rather than decreased. The number of screens in China increased from 2,668 in 2005 to 75,581 in 2020, a 27-fold increase.

From October 2019 to May 2021, numbers of cinemas in 203 out of 297 Chinese cities increased. Specifically, Chengdu, Suzhou, Guangzhou, Wuhan, Zhengzhou, Changzhou, Baoding, Beijing, Hangzhou and Shijiazhuang were the top 10 cities with biggest increases. Numbers of cinemas decreased in 38 cities, however, with Siping, Taizhou, and Jiujiang leading the decrease. That means 826 theaters in total were added in China during this period.

Change of the film industry’s business model amid COVID-19

The COVID-19 outbreak undermined China’s box office during the 2020 Spring Festival Holiday, but triggered a revolution in the film industry. “Lost in Russia,” originally scheduled for release in cinemas, premiered on ByteDance’s streaming platforms for free on Jan. 25, 2021, the first day of the Lunar New Year, after it was purchased by the tech firm for 630 million yuan.

The movie, despite missing its theatrical release, was viewed 600 million times and attracted 180 million viewers in the first three days on ByteDance’s four video apps – Douyin, Huoshan, Jinri Toutiao, and Xigua Video, with a total number of 180 million individual viewers. The movie brought numerous viewers to those video apps.

Figure 5 Change of movie release models amid COVID-19

OTT stands for “Over The Top” and refers to any streaming service that delivers content over the internet. International major OTT platforms include Netflix, Amazon Prime, Disney+, Hulu, and HBO Max, and domestic platforms include iQiyi, Tencent Video, and Youku.

ByteDance created a brand new mode of movie screening, making “Lost in Russia” the first movie to skip theaters to premier on an OTT platform amid the COVID-19 epidemic.

Zhou believed that the movie’s swift switch to the OTT platform not only reshapes the release model of blockbusters, but also represents a breakthrough in the business model for Chinese IT firms.

In 2020, the first blockbuster that premiered online was the Disney-made US$200-million “Mulan.” On Sept. 4, without theatrically released in North America, Disney premiered the movie on Disney+, which was launched in November, and raked in viewing and revenue.

On Dec. 4, 2020, Warner Bros. announced that all the 17 films launched in 2021 would be broadcast simultaneously in U.S. cinemas and its OTT platform HBO Max, a move that systemically changed the eyeball game.

Now, big-budget blockbusters hit OTT platforms and cinemas simultaneously, or just OTT platforms exclusively. An OTT strategy for a film has not only become a major factor that affects the film’s box office, but also had an impact on the future of the film maker.

In China, home to many IT companies, the cooperation between OTT and theaters will give a big boost to the film industry, Zhou predicted.

Figure 6 Timeline of theatrical and OTT releases of major blockbusters amid COVID-19 in 2020

The Chinese market capitulates Chinese movies into ranks of the world’s top earners

Chinese films in 2020 had a strong showing. According to Box Office Mojo data, “The Eight Hundred” became the top earner worldwide in 2020. Other Chinese films leading the pack included “My People, My Homeland” at No.4, “Legend of Deification” at No. 8, “A little Red Flower” at No. 9, and “The Sacrifice” at 14th. A string of Chinese films made their way into the top at the world’s box office thanks to a strong rebound in the Chinese movie market.

The contribution of domestic movies to China’s box office had fluctuated between 50% and 60% since 2005, and the figure surged to a staggering 83.7% in 2020.

China’s box office has skyrocketed over the past 20 years, from 2.05 billion yuan in 2005 to 64.27 billion yuan in 2019, an increase of 30 times. With the COVID-19 epidemic curbed effectively, the world’s biggest film market will embrace for a bigger rise in box office

Zhou said, the sheer size of China’s film market will bring its film industry to a golden era.

Figure 7 Map of top 30 Chinese cities by theater spending in 2020

The article was first published on China SCIO, China.org.cn on Aug. 18, 2022 and reprinted by other news websites.