Article | Cai Neng Quan
On the day of ChangXin's listing, the total market value of Hefei's A-share listed companies surged from 1.27 trillion yuan to over 4.55 trillion yuan. The city's ranking jumped directly from 19th nationally to 4th, trailing only Beijing, Shenzhen, and Shanghai.
"Fourth City" in the A-share market, with only Beijing, Shanghai, and Shenzhen ahead.
This isn't the first time Hefei has made headlines in the capital markets. BOE in 2008, NIO in 2020—each time they acted, it wasn't particularly early, and each time they made their move while others hesitated.
But the significance this time is different. ChangXin's scale is too massive—a market cap of 3 trillion yuan, with Hefei's state-owned capital achieving a paper gain of over 1 trillion yuan. This figure is close to three-quarters of Hefei's projected 2025 GDP. A provincial capital in central China, through a single equity investment, has earned an amount comparable to a province's economic scale.
In the first half of 2026, Hefei's GDP reached 707.3 billion yuan, a year-on-year increase of 6.8%, ranking first in growth rate among all cities with a GDP exceeding one trillion yuan. The added value of industries above a designated scale grew by 25.6%, with the electronic information industry soaring by 92.5%.
Fourth in A-share market value, first in GDP growth among trillion-yuan cities. Hefei's position is changing.
Outsiders call this "gambling." Hefei calls it "industry investment."
What's the difference between gambling and industry investment? Gambling is betting on high or low; industry investment is about calculation. Hefei calculates an account spanning several decades.
Hefei Invests Not in Companies, But in Gaps in the Industrial Chain
In 2008, Hefei decided to introduce BOE's 6th generation line. The total project investment was 17.5 billion yuan, equivalent to over 50% of Hefei's local fiscal revenue that year. At that time, Hefei was still planning its subway; investing this money meant the subway project would have to stop.
Why the courage? Because Hefei was already a national home appliance manufacturing base, with factories from Midea, Gree, and Haier. However, the core component of home appliances—liquid crystal display panels—was entirely dependent on imports. "Lacking screens" meant the majority of the home appliance industry's profits were taken by others.
The calculation Hefei made wasn't "whether BOE could be profitable," but "whether the home appliance industry could remain in Hefei without panels."
This calculation was correct. BOE's three production lines cumulatively attracted over 100 billion yuan in investment, establishing Hefei as a global hub for new display industries. More crucially, BOE fostered a complete display industry chain—supporting companies like Rainbow Display and Sanlipo settled one after another.
The same logic was applied to ChangXin in 2016. Hefei was already a display hub, but panel driver chips and memory chips were still imported. "Lacking chips" was akin to "lacking screens"—both were critical vulnerabilities in the industrial chain.
For ChangXin's first phase with an 18 billion yuan investment, Hefei Industrial Investment contributed 14.4 billion yuan, holding an 80% stake. Over the next ten years, ChangXin accumulated losses of 36.65 billion yuan. Hefei didn't withdraw; when other investors exited at the end of 2024, Hefei even took the initiative to spend nearly 2 billion yuan to acquire the old shares.
The calculation for investing in NIO in 2020 was more straightforward. Hefei was already a "chip and screen" city, but it lacked a leading player in the automotive sector. NIO needed money; Hefei needed a new energy vehicle factory; it was a mutual need. With 7 billion yuan invested, NIO China's headquarters settled in Hefei. Five years later, Hefei's new energy vehicle production reached 1.371 million units, ranking first in the country.
Three investments, all targeting gaps in the industrial chain: BOE addressed the "screen," ChangXin addressed the "chip," NIO addressed the "car." Hefei wasn't gambling on which company would succeed; it was calculating "whether our existing industries could survive if this particular industry wasn't in Hefei."
An Academician's Lecture Changed the Life of a Post-90s Youth
The story of Guoyi Quantum is different from the previous three. It wasn't introduced to Hefei; it grew up in Hefei.
In 2010, He Yu, a student in the University of Science and Technology of China's (USTC) Special Class for the Gifted Young, attended a lecture. The speaker was his mentor, Academician Du Jiangfeng of the Chinese Academy of Sciences. Du Jiangfeng shared an experience: his team once needed to purchase an electron paramagnetic resonance spectrometer. The foreign company initially quoted 6 million yuan. By the time they had scraped together enough money through borrowing, the other party jacked up the price to 10 million yuan, reasoning that "my product is the best, so the price must be the best."
He Yu was 17 that year. The next day, he approached Du Jiangfeng and said he wanted to develop domestic scientific instruments. He then entered Du's laboratory and began building quantum precision measurement equipment.
In 2016, 24-year-old He Yu co-founded Guoyi Quantum with Du Jiangfeng and Rong Xing. In the early stages of entrepreneurship, Du Jiangfeng lent him a 14-square-meter office. Meeting clients during the day and writing code at night was the norm.
In 2018, Guoyi Quantum launched China's first commercial X-band electron paramagnetic resonance spectrometer. Precisely the type of equipment that had held Du Jiangfeng hostage years earlier.
In April 2025, with the IPO just a step away, Du Jiangfeng, in compliance with organizational requirements, publicly transferred all his shares via the property rights exchange. With his mentor's exit, He Yu and Rong Xing became the actual controllers.
On August 11, 2026, 34-year-old He Yu rang the bell on the STAR Market. The young man who felt restless at that lecture years ago had, over a decade, fulfilled his promise to "build instruments for the nation."
Guoyi Quantum remains unprofitable, with a net loss attributable to the parent company of 5.7972 million yuan in 2025. Yet the market gave it a market cap of 44 billion yuan—paying for the certainty of "domestic substitution for high-end scientific instruments."
On the Flip Side of the Trillion-Yuan Paper Gain is the Persistence to "Stay the Course"
Outsiders call Hefei the most successful VC city. But what Hefei does is not venture capital at all.
The VC cycle is three to five years, pursuing high returns. Hefei's cycle starts at ten years, aiming to foster an industrial chain from scratch.
Hefei's state-owned capital holds about 33.1% of ChangXin, corresponding to a market value exceeding 1 trillion yuan. This number is staggering, but three prerequisites must be clarified.
First, this money is currently still a paper gain. ChangXin is within a 36-month lock-up period; actual divestment will be implemented step by step. The 1 trillion is "paper wealth," not cash.
Second, Hefei could afford this investment because it had previously completed several rounds of exit cycles. From the BOE project, Hefei's state-owned capital exited through secondary market sales, profiting over 30 billion yuan. From the NIO project, the initial 7 billion yuan investment was recovered within a year, netting a profit of 3.5 billion yuan. These exited funds were then reinvested into ChangXin. This formed a cycle of "invest—exit—reinvest."
Third, and most easily overlooked—Hefei has had its failures. Rongan Power, Hefei Suntech, and Xinhao Plasma all incurred losses. The difference is that Hefei didn't change direction because of one failure, nor did it become arrogant because of one success.
Professor Li Xuenan from the Cheung Kong Graduate School of Business describes Hefei's investment trajectory as a "learning curve"—BOE familiarized Hefei with the cycles of heavy-asset manufacturing; NIO gave Hefei experience in capital continuity during a company's low point; ChangXin brought Hefei into the deep waters of semiconductors. Each step accumulated capabilities for handling complex industrial projects.
Hefei's industrial planning does not waver with changes in government leadership. This statement is simple to say but extremely difficult to implement. The tenure of local government officials in China is typically five years, while ChangXin took ten years from investment to listing, and the quantum industry's layout and payoff span decades. This means each successive administration must continue the work left unfinished by predecessors, with no immediate political achievements in sight.
Two IPOs in half a month, one worth 3 trillion yuan, another 44 billion yuan. Hefei is in the spotlight.
But what's truly worth pondering isn't what Hefei invested in successfully, but why Hefei has been able to keep succeeding.
The answer lies not in the brilliance of any single decision, but in the operation of a system: USTC provides the technological source; state-owned capital provides long-term funding; industrial chain thinking provides investment direction; and political determination to stay the course provides time.
This system wasn't built in a day, nor did it suddenly appear at a particular moment. It accumulated decision by decision, starting from accepting USTC, through BOE, ChangXin, Guoyi Quantum, and NIO.
This system is not without risks. If ChangXin's market value corrects, the trillion-yuan paper gain could vanish like smoke. Competition in the new energy vehicle sector is far from over; whether NIO can achieve sustained profitability remains unknown. The quantum industry is still distant from large-scale commercialization.
But Hefei has proven one thing over decades: when a local government is willing to calculate an account over a sufficiently long period, the numbers on its ledger are different from those calculated by others.
