• Lanzhou, Shenzhen and Chengdu round out top 3 larger cities; Heyuan tops
  list of smaller cities
• Milken Institute analysis shows that China's regional development has
  elevated to a new level, with Western and North-Western region cities
  dominating top rankings

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HONG
KONG SAR�-�Media OutReach�- 17 December 2020 -�Lanzhou, the capital of China's Gansu Province and a crucial link in
China's One Belt, One Road initiative, is China's best-performing city in 2020,
according to the Milken Institute.

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The city of Lanzhou is
a shining example of the green development strategy that China embarked upon as
part of its 13^th Five-Year Plan, which focused on the elevating the
nation's growth through technological innovation and renewing efforts to
coordinate regional development. Having balanced urban infrastructure modernisation with improving
ecological sustainability^[1], Lanzhou
secures the first place, up from fourth position in 2019, in the Milken
Institute's sixth edition of its annual Best-Performing Cities China report,
which was released today. Shenzhen and Chengdu follow in second and third
place, respectively.

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"The Best Performing
Cities China index for 2020 highlights how China is leveraging the economic
power of the nation's three superclusters, Beijing-Tianjin-Hebei, Greater Bay
Area, and the Yangtze River Delta, as the architecture to connect and transmit
industrial production and commercial activities to smaller cities and counties,"
said Perry Wong, managing director of research at the Milken Institute and
co-author of the report. "The rapid elevation in the growth of the less
developed regional economies reflects China's commitment to infrastructure
building to reduce development disparities among regions and cities, as well as
alleviating environmental burdens -- such as congestion and pollution -- on
megacities."

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2020 also marks the first
time that cities from the Western region took three of the top five spots in
the Milken Institute's rankings. This highlights the success of the central
government and policymakers' focus on leveraging the comparative advantage of
regional development in the domestic market to spur growth among less developed
but lower-cost regions.

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Shenzhen in Guangdong
province retains its second-place position from last year. As one of the
greatest success stories of China's innovation economy development, Shenzhen is
today a global innovation powerhouse, after having successfully reinvented
itself from being a low-cost gadget manufacturing center. Today, the city is
China's main hub for telecom product advancements and tech entrepreneurship.
Shenzhen -- as one of China's growth leaders -- will be continued to be fortified
by the Chinese government to realize its mission to become a global city.

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Rounding up the top
three spots is Chengdu, dropping two positions from first place in 2019 after
holding the spot for the previous three years. It is also the sixth time the
city has been ranked in the top 10 large cities group. Chengdu continues to be
one of western China's most crucial economic, cultural, transportation and
communication hubs.

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Xi'an in Shanxi
province takes the fourth spot, up from sixth last year. The city is in the
Western part of China and is experiencing a boost in transportation infrastructure
development. Following Xi'an in fifth place is Fuzhou in the southeastern
province of Fujian.

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Taking sixth place is
the Guangzhou, the capital of Guangdong province which is also one of China's
oldest and biggest trading and transport hubs. Coming in seventh place is
Beijing, the nation's capital. Xiamen in Fujian province, Nanjing in Jiangsu
province, and Hefei in Anhui province round up the top 10 first- and
second-tier cities list.

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It is the first time
that Guangzhou, Nanjing, and Hefei entered the list of first- and second-tier
cities. It also the first time that Fuzhou is part of the list's top 10 cities.

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Heyuan in Guangdong
province takes this year's number one spot in the small cities list. As part of
the Greater Bay Area and a regional logistic point, Heyuan has recently
received many domestic and foreign investments that drive its economic growth
and is a testament to China's Western regional development that has helped
elevate economic activities with sustaining momentum. Coming in second place is
Baoji in Shanxi province, followed by Xinxiang in Henan province in third and
Chuzhou in Anhui province in fourth. Most of these cities have benefited from
the expansion of their neighboring major cities.

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The sixth and seven
placed cities are Xuancheng in Anhui province and Shangluo in Shanxi province
respectively, followed by ninth-placed Zhangzhou in Fujian province and
eighth-placed Dazhou in Sichuan province. Xinxiang and Dazhou are close to
Zhengzhou and Chongqing, the key commercial and production centers in their
respective provinces.� Zhangzhou, a city
next to Xiamen, has had a noticeable GDP growth in recent years.

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The last city on the
top 10 small cities list is Dongguan in Guangdong province, which topped the
small cities list in 2019.

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�"The Chinese government's focus on investing
hugely in domestic infrastructure, attracting foreign investment and leveraging
low-cost production factors has affected the growth status of several
third-tier cities, in addition to helping improve urban infrastructure and
environmental stability in first- and second-tier cities," added Mr. Wong.
"Despite the unprecedented challenges presented by the COVID-19 pandemic and
the continuation of global trade wars, China's drive for economic innovation
across its priority growth cities remains largely unperturbed."

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Methodology

The 2020 Milken
Institute Best-Performing Cities China Index divides 264 Chinese cities into
two groups, one for large cities and one for small and medium-sized cities. The
large cities group comprises 34 first- and second-tier cities, while the latter
is made up of 230 third-tier cities. The two groups are ranked separately based
on economic performance, with an emphasis on growth measurements. Its ranking
index for this 2020 version comprises nine indicators--one-year (2017-2018) and
five-year (2013-2018) growth for jobs, wages, and gross regional product (GRP)
per capita; three-year (2015-2018) foreign direct investment (FDI) growth;
FDI/GRP ratio (2018); and the location quotient (LQ) for high value-added
industry employment (2018). This index categorizes Chinese cities into large
and small groups to yield more meaningful comparisons and insights.

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About the Best
Performing Cities China Index

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

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Milken Institute's Best-Performing
Cities China Ranking

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Find out the
Interactive Map: www.best-cities-china.org

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