On the 21st of last month, at the Volkswagen factory in Hefei, Anhui Province, eastern China, over 1,200 robots were hard at work assembling the 'ID. Unix,' a strategic model for China and a pure electric sport utility vehicle (SUV). Thanks to an automation rate reaching 96%, the number of employees in the factory was minimal. Volkswagen has poured a total of 14.1 billion yuan (approximately 2.8 trillion won) into constructing this advanced factory, with plans to develop it into the largest production and research and development (R&D) base outside of Germany.
Volkswagen has 39 factories in China. The reason for focusing on the Hefei plant is what? Rürmann Rutger, Chief Technology Officer (CTO) of Volkswagen Anhui, noted, 'Both Horizon Robotics, with which we are collaborating to develop autonomous driving technology, and our battery partner Gotion (Chinese name: Guoxian) are located in Hefei. China is a market that is changing radically, and we need to adopt new technologies to survive. The environment considered in this way is Hefei.' Two days later, on the 23rd, Volkswagen unveiled three concept cars at the Shanghai Motor Show, among which the pure electric SUV 'ID. Evo' was assigned to the Hefei plant.
While the eastern Zhejiang Province's Hangzhou has gained recognition as a representative high-tech city in the world thanks to the Chinese artificial intelligence (AI) startup DeepSeek, Hefei, about 400 kilometers away, is emerging as a 'quiet powerhouse.' The key to Hefei's success lies not only in fostering single technologies but in securing the entire ecosystem related to them. Major high-tech corporations, such as China's largest telecommunications equipment company Huawei, are gathering in Hefei to take advantage of this ecosystem.
◇ Attracting 50 corporations this year… strength in ecosystem creation
In December of last year, Huawei and JAC (Jianghuai Automobile) hosted the groundbreaking ceremony for the super factory of the electric vehicle premium brand 'Junjie' in Hefei. The two companies plan to deploy more than 1,500 intelligent robots to fully automate key processes. The state-run China Central Television (CCTV) remarked that Huawei and JAC chose Hefei because it is 'a region that has continuously promoted the convergence and development of scientific innovation and industrial innovation over a long period.' It also noted that in the new energy vehicle (electric vehicle, hydrogen vehicle, hybrid vehicle) sector, the industrial structure has integrated from complete vehicles to parts and aftermarket, and has consistently nurtured over 500 core parts corporations.
Hefei is achieving clear results in the advanced electric vehicle industrial sector. The automobile production volume of Anhui, where Hefei is located, reached 3.57 million units last year, up 43.3% from the previous year, surpassing Guangdong Province, a traditional automobile industry powerhouse, and ranking first nationwide. Among these, the new energy vehicles in the advanced technology sector totaled 1.684 million units, a 94.5% increase. Yang Yi, publicity director of NIO, a major electric vehicle company based in Hefei, said, 'In Hefei, the intelligent electric vehicle industry is the first industry for the region's future and plays a key role in the development of advanced industries.' Major electric vehicle companies, including BYD (Build Your Dreams), as well as Chang'an Automobile and electric bus specialist Ankai, also have factories in Hefei.
Hefei is also being evaluated as having successfully created a diverse high-tech industrial ecosystem beyond the electric vehicle industry. A Chinese media outlet stated, 'Hefei has established 16 major industrial chains, led by the 'supply chain leading system,' including semiconductors, new display technology, and new energy vehicles,' adding, 'Hefei has planned the quantum information industry for 18 years, nurtured the new display industry for 15 years, and waited for the explosive growth of the new energy industry for 10 years.' It concluded that through these long-term industrial decisions, Hefei has secured a pioneering position.
The presence of China's largest display company BOE, Chinese representative voice AI company iFLYTEK (Chinese name: KeDaShunPei), and Chinese low-altitude economy representative enterprise Yihang in Hefei is also due to this industrial ecosystem. Baohuo District, where high-tech corporations gather in Hefei, announced that it has attracted over 50 corporate branches, including Huawei, just this year.
◇ 'Excellent talent students' notifications posted in the village… infusion of talent from 60 universities
Another key factor behind Hefei's advantages in the high-tech sector is 'talent development.' On the 22nd of last month, notices of 'Gaokao Xi Bao' (喜报) were posted on the streets of villages near Hefei, detailing the names of students who successfully enrolled in prestigious universities last year. A representative from Hefei City stated, 'We announce outstanding students like this every year,' adding, 'It is intended to inspire students' willingness to learn.'
Among these talents are many who chose regional universities rather than universities in Beijing. Currently, Hefei is home to 60 universities, including the University of Science and Technology of China, Hefei University of Technology, and Anhui University, as well as eight central research institutions, including the Hefei Institute of Physics, Chinese Academy of Sciences. Pan Feng, an inspector from the Anhui Department of Industry and Information Technology, stated, 'Thanks to science and technology universities like Hefei University of Technology, human resources are smoothly integrated with industry.' Yang Yi, director of NIO, noted, 'With many talented graduates from universities and the industrial growth, it is becoming easier to recruit excellent talent.'
Thanks to the high-tech industry, Hefei's economy has recovered from stagnation. According to China's National Bureau of Statistics, Hefei's regional gross domestic product (GDP) grew by 6.1% last year compared to the same period the previous year, which is higher than Beijing (5.2%) and Shanghai (5.0%). Hefei made a significant contribution to China's overall GDP growth of 5.0%. In particular, industrial production increased by 14.8% compared to the previous year, greatly exceeding the national average of 5.8%. Despite the investment famine in China, Hefei's manufacturing investment rose by 10.4%.