Eliza Wong
China has launched a new wave of reform, targeting 10 dynamic regions to pilot market-oriented allocation of production factors. These regions—Beijing Sub-Center, Southern Jiangsu Key Cities, Hangzhou-Ningbo-Wenzhou, Hefei Metropolitan Circle, Fuzhou-Xiamen-Quanzhou, Zhengzhou, Chang-Zhu-Tan, the nine mainland cities of the Guangdong-Hong Kong-Macao Greater Bay Area, Chongqing, and Chengdu—are economic powerhouses that collectively contribute over a quarter of the nation’s GDP. They are also at the forefront of developing new quality productive forces and building a unified national market. Being chosen as pilot zones is both a major responsibility and a strategic advantage. What exactly are these regions tasked with, and how significant will the impact be?
Why These 10 Regions?
China’s reform strategy has always been incremental. Pilot programs are first launched in select regions and, once proven successful, are rolled out nationwide. This was the case with Special Economic Zones, and later with Pioneer Demonstration Zones and Common Prosperity Demonstration Zones. The same logic applies here.
Officials note that these regions were chosen because they have “a solid development foundation, play a strong role in supporting economic growth, possess favorable conditions for reform, and are highly representative.”
First, the 10 pilot zones include over 30 prefecture-level cities spanning eastern, central, and western China, ensuring broad geographic representation. Past reforms often focused on eastern coastal areas and major cities. This time, the selection includes central and western regions such as the Hefei Metropolitan Circle, Chang-Zhu-Tan, Zhengzhou, and Chengdu-Chongqing, as well as mid-tier cities like Shaoxing, Huizhou, Zhenjiang, and Wuhu.
Second, the reform drive is not limited to individual cities but encompasses central cities, metropolitan circles, and city clusters working in synergy. The new round of reforms goes beyond single administrative units, aiming to break down traditional barriers and achieve cross-regional collaboration. Whether it is mutual recognition of household registration thresholds, linking urban and rural land use, developing “flyway” economic zones, or building industrial clusters, success depends on the coordinated development of metropolitan circles and city clusters.
Third, nearly all key cities, metropolitan circles, and city clusters are included, with only a few economically strong cities absent. A recent top-level document highlighted five major city clusters: the Beijing-Tianjin-Hebei region, Yangtze River Delta, and Greater Bay Area as world-class city clusters, and Chengdu-Chongqing and the Middle Yangtze River region as high-quality growth poles. Representatives from these clusters—such as Beijing Sub-Center, Southern Jiangsu and Hangzhou-Ningbo-Wenzhou, the nine mainland cities of the Greater Bay Area, Chengdu-Chongqing, and Chang-Zhu-Tan—are all part of the pilot. Notable absences include Shanghai, Wuhan, Tianjin, Qingdao, Jinan, Xi’an, and Shenyang. The reasons vary: Shanghai is already undertaking higher-level reforms, while other regions are represented through nearby pilot zones.
What Are the Key Reform Tasks?
Two weeks ago, the State Council executive meeting called for deepening market-oriented reforms in production factors to ensure that factor prices are determined by the market, flow freely and orderly, and are allocated efficiently and fairly. The market is an organic whole comprising goods, services, and production factors. While goods and services already respond to market signals, it is now time to focus on the deeper layer: production factors.
The term “production factors” may sound technical, but it refers to traditional elements like labor, land, and capital, as well as emerging elements like data, computing power, and environmental resources. Market-oriented reforms in these areas target labor mobility, land marketization, technology transfer, data interoperability, capital market development, and carbon emission trading, among others.
Given regional differences, the reforms are tailored to local conditions. In cutting-edge industries, the Greater Bay Area will focus on deep-sea exploration, aerospace, life sciences, new energy, artificial intelligence, and modern seed technology—a relatively comprehensive portfolio. Southern Jiangsu cities will emphasize AI, life sciences, and new energy; the Hefei Metropolitan Circle will concentrate on new energy, AI, and smart rail transit; Zhengzhou will prioritize life sciences, AI, and modern seed technology.
In science and technology, Beijing Sub-Center will experiment with “fault-tolerant exemptions” for state-owned enterprises in tech innovation. The Greater Bay Area, Hangzhou-Ningbo-Wenzhou, and Fuzhou-Xiamen-Quanzhou will adopt a “chief scientist/expert responsibility system,” while Southern Jiangsu will implement a “negative list + blanket funding” model for research budgets.
In low-altitude economy, the Greater Bay Area and Hefei Metropolitan Circle will pilot the construction of unmanned systems for land, sea, and air spaces. In computing power, the National Supercomputing Center in Zhengzhou and the Chengdu-Chongqing national hub node of the integrated computing network are named, securing their place in the AI era.
In finance, the Shenzhen Stock Exchange, Guangzhou Futures Exchange, and Zhengzhou Commodity Exchange are highlighted, reflecting the trend toward building a multi-tier capital market. In cross-border initiatives, the Greater Bay Area will explore cross-border data flows and mutual recognition of professional qualifications, while Fuzhou-Xiamen-Quanzhou will promote Fujian-Taiwan professional qualification mutual recognition and a cross-strait data integration hub.
In land reform, the Greater Bay Area will “optimize industrial land lease terms,” explore land leasing models for industries, and allow reasonable conversion between different types of industrial land, breaking past constraints in the land market. Additionally, Hangzhou-Ningbo-Wenzhou’s “mu-based excellence” model (rewarding efficient land use) is already influencing resource allocation by “guiding production factors toward superior regions, industries, and enterprises.”
Clearly, pilot regions will enjoy greater autonomy, giving them a head start in developing new quality productive forces and nurturing emerging industries.
Which Reforms Are Likely to Advance First?
The 10 pilot regions have distinct roles but also share common priorities. An analysis of the 10 policy documents reveals several high-frequency keywords that indicate consensus on the next steps for reform.
First, in technological innovation, phrases like “sci-tech resource sharing,” “property rights for职务科技成果 (job-related scientific achievements),” and “chief scientist/expert responsibility system” appear repeatedly. Sci-tech resource sharing is mainly promoted within metropolitan circles and city clusters—exemplified by the Greater Bay Area’s joint construction of an international sci-tech innovation center and Chengdu-Chongqing’s collaboration on the Western Science City.
Defining rights to job-related achievements is equally important. In the past, such achievements belonged to institutions. Now, researchers may be granted partial ownership or long-term usage rights. The Hefei Metropolitan Circle, for instance, will raise this share to 70%, demonstrating significant commitment. The chief scientist responsibility system empowers professionals to lead in their fields, which is crucial in frontier technologies. Many state-owned enterprises have already adopted this model.
Second, in land market reforms, high-frequency terms include “rural collective land market entry,” “inter-regional transfer of land quota balances,” “long-term leasing of industrial land,” and “mu-based excellence.” Rural collective land market entry is not new—such land can already be used for rental housing and commercial projects, though not for real estate development.
The transfer of land quota balances is particularly meaningful for large cities. China’s land use is approval-based, with major cities facing shortages in residential and industrial land, while smaller cities have surpluses. If quota balances can be transferred across counties, cities, or even provinces, smaller cities can “sell” quotas to larger ones, creating win-win outcomes.
Third, in labor mobility, policies frequently mention “relaxing household registration (hukou) restrictions,” “city-cluster mutual recognition of years of residence for hukou eligibility,” and “linking fiscal transfers to population trends.” Relaxing hukou rules is a general trend, with 90% of cities already offering zero-threshold registration—though megacities and very large cities remain exceptions. Therefore, exploring mutual recognition of social security and years of residence within city clusters—for example, allowing social security contributions in Wuxi to count for hukou eligibility in Suzhou, or Dongguan contributions for Foshan—is a major step forward. Notably, downtown Guangzhou, Shenzhen, and Hangzhou still maintain stricter controls.
The “people-land-money linkage” mechanism means that fiscal transfers, land quotas, and infrastructure investments will be tied to population trends. Regions experiencing population outflows may face challenges.
Clearly, future urban competition will revolve around new quality productive forces, emerging industries, population吸引力, and institutional innovation.
Implications for China’s Economic Future
The selection of these 10 regions for market-oriented reforms signals a strategic shift toward more efficient allocation of resources. By empowering these economic powerhouses to experiment with innovative policies, China aims to enhance productivity, stimulate innovation, and foster more balanced regional development.
The reforms are expected to have ripple effects beyond the pilot zones. Successful experiments may be scaled nationally, shaping China’s economic landscape for years to come. For businesses and investors, these regions offer new opportunities in emerging sectors such as AI, new energy, and low-altitude economy. For policymakers, the pilots provide valuable insights into how market mechanisms can be optimized within a socialist market economy.
As these reforms unfold, it will be crucial to monitor their progress and outcomes. The world will be watching to see how China’s latest reform initiative drives economic transformation and supports sustainable growth.
To stay updated on these developments, follow official announcements from the National Development and Reform Commission (NDRC) and local government portals. Engaging with industry reports and expert analyses can also provide deeper insights into the opportunities arising from these market-oriented reforms.
