Industrial robot arms at work inside a Volkswagen workshop in Hefei, Anhui Province, on May 21 (WEI YAO)
Hefei City, capital of Anhui Province in east China, is rapidly emerging as one of the country’s leading innovation hubs—quickly narrowing the gap with megacities like Beijing and Shanghai. In 2023, Nature science journal ranked Hefei 13th in the world for scientific research output, a testament to its growing global influence in science and technology.
In just a few years, the city has replaced vast swathes of abandoned farmland with sprawling technology parks and scientific facilities. Over the past decade alone, Hefei’s GDP, a key gauge of economic health and performance, has more than doubled.
The city’s journey began in the late 1970s, with the rise of the home appliance industry. Since then, the city has consistently aligned itself with global technological shifts and industrial upgrades. Today, it boasts strong capabilities in next-generation industries such as semiconductors, display technologies, new-energy vehicles (NEVs), smart manufacturing and AI.
NEVs are automobiles that are fully or predominantly powered by electric energy, including plug-in vehicles, battery electric vehicles, plug-in hybrid electric vehicles and fuel-cell electric vehicles.
An innovation hub
The rise of three Chinese companies in particular illustrates Hefei’s transformation from an unassuming inland city to a hi-tech powerhouse.
In 2008, Hefei brought in BOE Technology Group, a leading Chinese electronic components manufacturer. Shortly after, the company launched a production line for sixth-generation TFT-LCD display panels in the city—the first of its kind on the Chinese mainland. Today, BOE is a giant with an annual revenue of billions of U.S. dollars, and Hefei is known as a global display industry base.
Nine years ago, ChangXin Memory Technologies was founded in Hefei with an investment of 150 billion yuan ($20 billion) to develop and manufacture memory chips. Today, the city has built an industrial cluster for memory chip making.
In 2020, Hefei managed to raise 7 billion yuan ($970 million) in venture capital and invested the money in cash-strapped electric vehicle (EV) maker NIO. The rescue enabled NIO to overcome an acute liquidity crisis. The company later established its China headquarters in Hefei. After that, globally leading EV companies, such as German automaker Volkswagen and domestic brand BYD, also set up units in the city.
Now, Hefei has formed comparative advantages in NEVs. In 2023, the city produced 740,000 NEVs, ranking fourth in China.
Looking ahead, Hefei is investing in future industries, including the low-altitude economy (defined as economic activities in airspace below 1,000 meters), aerospace information, quantum information and fusion energy. The city has a cluster of 100-plus aerospace enterprises. It is also home to China’s first national quantum information-themed sci-tech park for future industries, boasting a leading number of quantum patent authorizations nationwide.
Its proactive approach to strategic investment has earned Hefei the nickname “city of venture capital.” The “Hefei model” is characterized by government-led investments in cutting-edge sectors and the creation of innovation platforms and incubators, such as Zhongke Hefei Institute of Technology Innovation Engineering, which provide support to research teams in commercializing their technological innovations.
Hefei’s development path also features building the industrial chain around a leading company. Volkswagen’s research and development (R&D) arm in China, Volkswagen Group (China) Technology Co. (VCTC), which was officially launched in Hefei in 2024, is now the company’s largest R&D facility outside of Germany. It focuses on intelligent and connected vehicles for the Chinese market.
So far, over 500 production suppliers and more than 1,000 general purchasing suppliers have joined Volkswagen’s ecosystem in Anhui. The company has attracted 50 of them to set up operations in Hefei itself as well as nearby areas.
“Our new platform, developed by VCTC, will enable 30-percent faster speed to market and reduce the overall production cost by approximately 40 percent,” Shao Jian, chief human resources officer of Volkswagen Smart E-Mobility Hub, told a media group that was conducting a survey of Hefei’s development trajectory on May 21. “This is the result of cooperation between our R&D teams and local partners.”
Talent development has been another key pillar of Hefei’s growth. The city produces over 100,000 STEM (science, technology, engineering and mathematics) graduates annually from institutions like the University of Science and Technology of China (USTC).
Central Government policies encourage collaboration between enterprises, universities and research institutes. Such partnerships have played a pivotal role in turning scientific achievements into technological innovations.
Volkswagen, for instance, launched the Volkswagen College program in collaboration with Hefei University, and introduced Germany’s dual-education model to train students in the likes of mechanical engineering and software development.
A comfortable life
Hefei has been working actively to attract foreign talent in an effort to boost the city’s innovation capacity. In recent years, an increasing number of international professionals have chosen to settle down in Hefei, drawn by its potential and growing reputation as a sci-tech hub.
From 2019 to 2021, Hefei was named one of the most attractive Chinese cities for foreign experts, a recognition that reflects its improving quality of life, welcoming environment and expanding opportunities.
Miroslav Khula, CEO of Volkswagen Anhui, shared his impressions with the media group. “When I’m not in the office, I usually go running or cycling around the hi-tech zone,” he told Beijing Review. After just five months in the city, Khula found it easy to feel at home, thanks to Hefei’s natural surroundings, strong sense of community and openness. “Hefei is a city where we want to live, and we’re really enjoying our time here,” he said, describing life with his family.
Khula’s experience is increasingly common among foreign professionals in Hefei. Kim Seok-ro, an air conditioning performance specialist from the Republic of Korea who works for Chinese home appliance giant Midea Group, has called Hefei home since 2017. Originally planning to stay for a decade, Kim has decided to extend his time in the city due to his team’s continued growth. “As long as the company needs me, I won’t leave,” he said.
“This is my eighth year at Midea,” Kim said during a meeting with the media group on May 21. “It has turned out quite differently from what I expected—especially since it was my first time working in China. But once I moved to Hefei, I found that life and work here have gone surprisingly smoothly. I was initially worried about issues like healthcare and the education of my children, but Hefei has developed very well in those areas.”
Fan Jin, head of the Hefei Municipal Bureau of Science and Technology, emphasized the growing international presence in the city. “Over 1,500 foreign experts from 74 countries are contributing to Hefei’s economic and social development,” Fan said at a forum gathering international experts from across the globe on May 20.
Fan highlighted the essential role overseas professionals play—not only in driving innovation, but also in strengthening international cooperation and advancing China’s modernization efforts.
Among those contributing to Hefei’s academic and research community is Clause Thomas Weise, a German professor of applied optimization at the School of AI and Big Data at Hefei University. Weise spoke highly of the city’s upgraded infrastructure and rising quality of life. “I feel deeply grateful for the opportunities and support that I and my colleagues have received from local institutions and enterprises,” he said.
“What I really appreciate about being here is the positive outlook on the future. There’s a shared goal to keep improving—not just for oneself, but as a society. People here generally believe that each year should be better than the last. I really admire that mindset,” Weise said.
(Print Edition Title: From Humble To Hi-Tech)
Copyedited by Elsbeth van Paridon
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