(Bloomberg) -- Chengdu, the capital of southwest China’s Sichuan province, reclaimed the top spot in a Milken Institute ranking of the country’s best-performing big cities.
Nearby Chongqing climbed to second place, while Guiyang, the capital of China’s poor-but-fast-growing Guizhou province, fell to third from first, according to a report released Monday by the Santa Monica, California-based think tank founded by Michael Milken.
Chengdu and Chongqing are among the cities benefiting from the central government-led policy push since the early 2000s to steer greater investment to interior regions, according to the analysis. Both have varied and high-value-added industries, high-quality labor markets, and lower costs than megacities such as Beijing and Shanghai, it said.
"The top-ranked cities are responding robustly to the central government’s directives," Perry Wong, managing director of research at Milken, said in the report. "The Belt and Road initiative, together with the creation of regional economic clusters, demonstrate the central government’s determination to improve the growth prospects of Chinese inland cities."
A megacity of more than 30 million people, Chongqing was carved out of Sichuan two decades ago to become China’s fourth direct-controlled municipality, essentially a provincial-level city like coastal counterparts Beijing, Shanghai and Tianjin. The city tied with Tibet in 2015 for the fastest economic expansion among 31 provincial regions, with 11 percent growth.
When Guiyang edged out financial capital Shanghai as the top performer last year, Milken also cited the benefits it receives from a central government push to connect coastal and inland regions, along with infrastructure investment related to President Xi Jinping’s initiative to revive China’s ancient trade links to Asia and Europe.
The rankings of 34 first- and second-tier cities and 226 third-tier cities track urban economic and development trends in China with nine variables, including job growth, pay gains, per capita growth, foreign direct investment, and the locations of high value-added industry. This year’s index reflects the impact of regional economic clusters, such as how Chengdu, Chongqing and Guiyang are aligned with China’s Belt and Road route.
Nantong, in coastal Jiangsu province, catapulted to first place among smaller cities due to rapid job and wage growth over five years. Bengbu, Anhui, ranked second on the strength of one-year wage growth, while Foshan, a manufacturing hub in Guangdong, took third place.
With assistance from Jeff Kearns