Who are the silent winners in China's structural tranformation?

Stories and data of the rise of mid-tier cities, supported by manufacturing resurgence

All investors interested in China are now asking a simple question: when will China's economy be back in good condition?

We always emphasize that we are undergoing an era of structural changes, not an all-round decline. In our previous article, we highlighted that mid-tier cities are emerging as bright spots, supported by a resurgence in manufacturing. It’s crucial to note that these cities are becoming potential hubs for future population growth. They show higher job demand and more stable salary growth. Furthermore, housing affordability in these areas is increasingly favorable, compared to top-tier cities.

Mid-tier cities in China, including regional centers, provincial capitals, and key manufacturing hubs, are emerging as vital economic centers. Our analysis shows that the manufacturing sector, especially in advanced areas like the automotive and semiconductor industries, leads in both job demand and salary growth. Roles such as algorithm engineers for autonomous driving and chip designers are driving this growth.

Today, we translate an article by SingingUnderStars, an organization focused on listed company analysis and business research, and combined with our exclusive recruitment data. This translated article provides first-hand observation of specific companies and cities, aligning with our data. Key conclusions include:

1. Economic transformation as a hero maker: Booming sectors are related to transformation, while unrelated ones face decline.

2. Industry transformation could reduce wealth gaps, as the beneficiaries of the transformation are small and mid-tier cities.

3. Silent success: Those benefiting from the transformation often remain quiet, while those losing out loudly voice their concerns on social media.

Job demand in manufacturing is booming in small and mid tier cities, driven by high-paying positions

First, let's look at four charts based on BigOne tracked online recruitment data. Over the past four years, manufacturing has been a bright spot in hiring. It has outperformed other industries such as real estate and financial services, leading to a rise in its proportion. Within the manufacturing sector, second-to-fourth-tier cities are expanding faster.

Moreover, high-salary job positions in manufacturing sectors in second-to-fourth-tier cities are rapidly growing. Positions with salaries above RMB10,000 and 10,000-20,000 now account for half of the total.

The following section will be based on the author's firsthand observations, using specific cities and companies as examples to vividly illustrate how industrial development absorbs the workforce and drives subsequent urban development.

Four stories of beneficiaries in industrial transformation

1. Rise of new quality productive forces: BYD's factory in Jinan

BYD, a leading company in the New Energy Vehicle (NEV) market, exemplifies the rise of "new quality productive forces". By June 2024, BYD has delivered four consecutive months of 300K+ sales, securing its lead in China’s NEV market with over 35% YoY growth. Based on BigOne tracked recruitment data, BYD posts around 1500 new job positions online per month since 2024, indicating its greater capability in absorbing talent.

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