Want to ride the next wave of globalization? Look to rising powerhouse cities like Hefei – not the usual suspects

A decade ago, few outside China had heard of the inland city of Hefei. Today, it’s become a bellwether for how globalization is being rebuilt from the ground up. In just 10 years, the city's GDP more than doubled from $70 billion in 2014 to over $150 billion. Once a provincial hub for commodities like grain and cotton, Hefei now hosts more than 300 high-tech firms in electric mobility, semiconductors and renewable energy.

What’s remarkable isn’t just the influx of capital. It’s that many of these firms, including global players like NIO and iFlytek, are not just producing there; they are headquartered there. And they aren’t merely participating in globalization, they’re rewriting the rules.

This next wave of globalization isn’t being drafted in trade forums or decided in corporate boardrooms. It’s being built on factory floors, in R&D labs and through local government alliances – in cities like Hefei, Changsha and Wuxi. These places are not just manufacturing outposts; they’re becoming the new command centres of global strategy.

China’s inland cities aren’t waiting to be invited to the global stage; they’re claiming a seat by building out innovation ecosystems from scratch.

In Hefei, BOE Technology and SMIC have made the city a critical node in the global semiconductor value chain. It’s also emerging as a key player in electric vehicle batteries, thanks to coordinated efforts with domestic and international partners.

In Changsha, Sany and Zoomlion are exporting heavy machinery around the world, while Truking serves over 30 countries with pharma equipment. These firms are investing in overseas facilities, launching co-development initiatives and embedding themselves into regional markets.

In Wuxi, AstraZeneca has launched a global innovation campus that integrates R&D with commercial operations. Meanwhile, Alibaba Cloud is supporting the development of smart infrastructure through its partnerships with local government and private firms. These companies exemplify how digital platforms and health ecosystems are being woven into regional and global supply chains.

This wave of globalization is not happening in spite of China’s second- and third-tier cities – it’s happening because of them. National policy may provide the scaffolding, but it’s local governments and entrepreneurial firms that are building the structures that scale.

The old globalization playbook – build big, ship far, manage centrally – is being torn up.

BYD, based in Shenzhen and expanding through hubs like Hefei, plans to sell half its cars outside China by 2030. Its plant in Hungary, launching this year, reflects a bigger trend: resilience through regional production, not cost-cutting through centralization. These facilities are designed to serve not just one market but regional blocs such as Europe, Latin America, South-East Asia, pointing to a new model of distributed scale.

Haier, operating from Qingdao, has taken a different approach using its Rendanheyi system. This system decentralizes operations into autonomous, customer-facing micro-enterprises. And it’s working. Subsidiaries like GE Appliances in the US and Sanyo in Japan have thrived under this model, combining local agility with global strategic alignment.

As Haier Chairman, Zhou Yunjie, explains in a recent IMD interview it’s a governance model that enables deep local integration without sacrificing innovation or speed. This is what global scaling looks like today: build close, move fast adapt constantly.

These aren’t isolated cases – they reflect a measurable shift. According to IMD’s China Company Transformation Indicator (CCTI), high-performing firms are investing in regional supply chains, digital platforms and collaborative ecosystems. More than 70% of surveyed firms reported that digital connectivity and regional agility were more critical than global scale alone.

Rather than replicate headquarters logic across markets, these firms are co-creating with local partners: startups, universities, even governments. They’re embedding themselves into new regions, not just selling into them. That means more local R&D, more cross-border joint ventures and more emphasis on co-developed innovation.

Globalization used to mean copy-pasting a model worldwide. Now it means creating new models for every market.

This isn’t a China-only playbook. Cities like Hyderabad in India, Da Nang in Vietnam, and Monterrey in Mexico are following similar arcs: becoming regional anchors for global operations.

Monterrey, for instance, has emerged as a nearshoring hub for advanced manufacturing. It has attracted investment from global giants like Tesla and Volvo, supported by strong industrial infrastructure and education partnerships through the Tecnológico de Monterrey institute. The city is also building a clean innovation cluster focused on zero-emissions technologies and smart logistics.

Executives everywhere should ask: What’s our Hefei? Which overlooked city in your footprint could become a launchpad for innovation-led, region-first growth? This isn’t just about supply chain resilience. It’s about unlocking local energy to build global momentum.

The age of fragile efficiency is ending. Firms that cling to sprawling, linear supply chains are learning the hard way. Those that embed, localize and decentralize are already ahead.

China’s most forward-looking companies are showing how to design for uncertainty, from modular operations to digitally integrated networks. Whether through regional production hubs, local innovation platforms or agile supplier ecosystems, the ability to flex is now a strategic differentiator. This is no longer a contingency plan. It’s the new operating system for global relevance.

The future of globalization isn’t dead, but it’s no longer dictated by the old guard. It’s being reassembled: firm by firm, city by city. If global institutions can’t keep up, they risk being bypassed.

The challenge now is how to support a globalization model built on agility, locality and cooperation. Institutions must evolve to enable, not hinder, this shift. The next wave of globalization isn’t looming. It’s already here, and it’s rising from cities like Hefei.