If you were to ask people what their strongest impression of the past three quarters of this year is, most would probably sum it up in three words.

Uncertainty.

Indeed, 2022 has been marked by a great deal of uncertainty.

Many major cities have prioritized “stability,” yet while everyone’s attention has been focused on the ups and downs of these metropolises, a group of previously overlooked third- and fourth-tier cities has emerged before the public eye with impressive results.

It is often said that urban development follows the “Matthew Effect”—the strong get stronger, and the weak get weaker.

But why did these third- and fourth-tier towns refuse to play by those rules this year? With a mindset as diligent as that of farmers tilling the land, they taught the big cities a valuable lesson.

What lies behind these outstanding results?

The data reveals that among the top 10 cities by GDP growth in the first half of 2022, only Shijiazhuang is a second-tier city; the rest are mostly small towns whose names are known only to locals.

These third-, fourth-, and fifth-tier cities were once commonly defined by their small size, weak industrial foundations, and persistent population outflow...

However, this year, things have taken a different turn. While their small size remains unchanged, it is precisely the industrial foundation—once criticized—that has delivered a powerful counterpunch.

Behind this high growth lies the rise of industrial chains and clusters.

In the post-pandemic era, a new pattern is taking shape, centered on domestic circulation while promoting mutual reinforcement between domestic and international circulation. Corporate investment is no longer limited to coastal cities; central and western regions are also becoming viable options for corporate investment.

The keys to rapid industrial development vary from place to place: some rely on resource advantages, others on geographical advantages, and still others on the upgrading of basic industries.

Jinchang, Gansu, is rich in nickel and is hailed as the “Nickel Capital of China.” Since nickel is a key raw material for new energy battery materials and the battery industry, Jinchang has seized the opportunity to accelerate the establishment of new energy battery enterprises, giving it strong confidence in its development.

Led by CATL, Ningde is developing four key industries: lithium-ion new energy, new energy vehicles, stainless steel new materials, and copper materials.

It is clear that the rise of these small cities is attributable, on the one hand, to effective pandemic control measures, and on the other, to intensified efforts to guide the development of leading industries and enable major projects to fully realize their production capacity.

What are the strengths of these frontrunners in development?

Leveraging Basic Industries: From the Vegetable Basket to the Dinner Plate

Recently, one industry has been gaining significant momentum. It may not be as glamorous as the metaverse or as high-tech as new energy, but it is the ready-to-cook meal industry—one that directly impacts people’s livelihoods.

Major vegetable-producing provinces such as Guangdong, Shandong, and Henan have rolled out industrial policies in an effort to be the first to capture this blue-ocean market.

Among them, Weifang—known as the “vegetable basket”—is leveraging its long-standing agricultural strengths to accelerate local industrial upgrading, transforming the “vegetable basket” into a “vegetable platter.”

In the development of industrial clusters, the saying “he who controls the supply chain controls the market” rings true. Beyond the supply of upstream raw materials, the prepared meal industry also places great emphasis on warehousing and cold-chain logistics.

Currently, Weifang is home to 1,186 prepared meal enterprises, ranking first nationwide. With 176 cold chain companies—three times the number in 2017—the city provides robust logistical support for the industry.

To further accelerate the development of the prepared meal industry, local authorities can also turn their attention to the “unsung heroes” who provide professional manufacturing services to clients.

This would provide a new source of momentum for the local prepared meal industry.

Leveraging Key Enterprises Opens Up Broad Paths for Industrial Development

In fact, Ningde’s reputation pales in comparison to that of CATL.

Driven by the “dual carbon goals,” the new energy and new energy battery industries have surged in popularity. Any local industry with even a passing connection to new energy has sought to attract CATL.

While other cities were still scrambling to attract CATL, Ningde effortlessly established a lithium battery industry cluster.

But you probably wouldn’t guess that in 2021, Ningde’s highest annual output value didn’t come from the lithium-ion battery industry, but from the stainless steel new materials sector.

Qingtou Group, Ningde’s most iconic stainless steel enterprise, is worth noting.

Qingtou Group is the largest stainless steel production and deep-processing base in China and even the world. Its high-tech product, "tearable steel," can be used in high-end electronic products such as foldable phones.

Clustered production and processing is another of Ningde’s strengths.

Thanks to Ningde’s “closed-loop industrial chain,” local enterprises can find high-quality customers and reliable suppliers right in their own backyard, even without expanding beyond the region.

With industrial clusters concentrated within a 9-minute drive, automotive manufacturers don’t even need space to store power batteries, allowing them to use available space to expand production lines and increase capacity.

It is clear that Ningde’s confidence stems not only from the “King of Ningde” but also from its longstanding commitment to high-end manufacturing.

Leveraging Resource Advantages to Extend and Cluster the Supply Chain

In fact, rare earths have long been a valuable resource for Ganzhou, but this resource had not yet been transformed into a competitive advantage.

At the end of 2021, the China Rare Earth Group was established in Ganzhou, drawing widespread attention to this small city.

Subsequently, the development of a full industrial chain—encompassing R&D, deep processing, downstream applications, and import-export trade—accelerated the full utilization of rare earth resources.

There are many cities in China that have “made their fortunes” by relying on natural resources. Learning from the lessons of previous resource-based cities, today’s resource-based cities have abandoned the mindset of merely “living off the land.”

Deepening, refining, and strengthening the resource industry chain is the only way forward for resource-based cities.

The opportunity for small towns has arrived—how should they seize it?

Have you heard of the “hunting principle” and the “farming principle”?

The Hunting Principle: One word—"seize."

Acting in harmony with the seasons, settling where water and grass abound.

When the environment becomes unfavorable, they move on. Applied to investment promotion, this means constantly chasing trends without cultivating core competitiveness.

The Law of Farming: One word—“plant.”

Sow in spring, cultivate in summer, harvest in autumn, and store in winter.

Follow the mainstream, work hard, and be specialized even if you don’t know much. Once you’ve chosen your land, cultivate it diligently and meticulously.

The industrial development of small cities follows the “principles of farming”: sow first, then reap; nurture first, then achieve.

Judging from the development trajectories of the three cities mentioned above, they have all adhered to the “Principle of Agriculture.”

Against the backdrop of accelerating high-quality urban development, the advantages of cities that have long focused on industrial development are gradually coming to the fore.

Ningbo, renowned for its “single-champion” and “hidden champion” enterprises; Yibin, which has seized the opportunity for lithium battery industry development through clean energy and its geographical advantages; and Ningde, where high-end manufacturing is flourishing across the board…

This clearly demonstrates that sometimes, taking a more “down-to-earth” approach leads to a more sustainable path.

Since we cannot outpace major cities, we must first hone our own capabilities and strengthen our core competitiveness. Only then can we showcase our region’s unique strengths to businesses during investment promotion efforts.

However, as small cities rise rapidly, they must also consider how to move beyond a single-industry structure and how to use the development of a dominant industrial cluster to drive the formation of new clusters.

Ningde’s “9-minute supply circle,” Weifang’s transformation and upgrading of its foundational industries, and Ganzhou’s resource-based industrial chain development serve as “models” for small cities to emulate.

In Closing

Small Cities Hold Many Stories of Development

Filled with the joys and triumphs of industrial upgrading

If enterprises choose to come to these small cities

They are sure to reap abundant rewards