Hangzhou is moving from the e-commerce capital to the "Silicon Valley of China", with the coordinated development of the digital economy and the technology industry as the key code.

Since the Spring Festival of the Year of the Snake, Depth from Hangzhou, DeepSeek, Game Science, Yushu Technology, Yunshenchu Technology, Strong Brain Technology, and Qunhe Technology have become popular, collectively known as the ‘Six Little Dragons of Hangzhou,’ driving Hangzhou to become the first ‘Internet-famous city’ in 2025. This phenomenon not only reflects the booming development of Hangzhou’s artificial intelligence industry but also signifies Hangzhou’s accelerated progress towards becoming a city of technology.

Beyond West Lake, ‘digital economy’ is the second business card of Hangzhou. Hangzhou has always enjoyed the reputation of being the ‘number one city of the digital economy.’ Today, Hangzhou has transformed from a leader in Internet e-commerce to the ‘Silicon Valley of China’ in the AI era, and this transformation is inseparable from the deep soil of the city’s digital economy development. Since the concept of ‘Digital Zhejiang’ was proposed in 2003, Hangzhou’s digital economy has accumulated for twenty years, laying a solid foundation for Hangzhou’s advancement into a city of technology.

To promote the construction of a prosperous data industry ecosystem, Hangzhou has already made multiple explorations. Currently, Hangzhou has established five major industry landmarks, namely, ‘China Vision Valley,’ ‘China Data Valley,’ ‘China Element Valley,’ ‘China Fei Valley,’ and ‘China Cloud Valley,’ gathering world-renowned enterprises such as Alibaba, Ant Group, Huawei Hangzhou Research Institute, NetEase, Hikvision, Dahua Technology, and Inspur. It has attracted and nurtured a group of data element-type enterprises from different industries and fields, forming a unique data industry ecosystem in Hangzhou.

On the profound foundation of the digital economy, whether it is the brilliant past of the “e-commerce capital” or the beautiful vision of the “technology city”, it will be the driving force for the continuous progress of this city. Insiders point out that many innovative companies such as DeepSeek, Game Science, and Yushu Technology have emerged successively, injecting vitality into the market. In the future, Hangzhou is expected to give birth to companies with trillions of dollars in market value, presenting a development trend driven by innovation similar to Silicon Valley.

The soil of the digital economy is rich

The year 2003 marked the beginning of Hangzhou’s transformation. Building on the foundation of being a “paradise for scenery” and a “paradise for West Lake,” Hangzhou aims to create a new urban business card as a “paradise for Silicon Valley” and a “paradise for high-tech.”

In April of that year, Hangzhou established the development goal of ‘Silicon Valley Paradise, High-tech Paradise’, focusing on the development of the e-commerce industry. Over the past twenty years, Hangzhou’s digital economy has achieved remarkable results. By 2023, the number of sellers in Hangzhou reached 63,000, with 1045 cross-border e-commerce companies with a scale of over 20 million yuan, making it the largest ‘e-commerce capital’ in the country. In 2023, the core industry of Hangzhou’s digital economy achieved a revenue of 1.8737 trillion yuan, ranking first in the country.

To promote the deep and practical development of the digital economy, Hangzhou has continuously introduced a series of relevant policies. For example, in October 2018, Hangzhou made a strategic deployment to comprehensively promote the integrated development of digital industrialization, industrial digitization, and urban digitization, aiming to build the first city of digital economy in China. In 2023, Hangzhou issued the “Number One Development Project” implementation plan for the innovation and quality improvement of Hangzhou’s digital economy, proposing that Hangzhou’s digital economy should aim for high growth, embark on new endeavors, enhance efficiency through integration, and accelerate the construction of a modern industrial system with the digital economy at its core, aiming to reshape the first city of digital economy in China at a high level.

The rapid development of the digital economy has enabled many digital pioneers of companies such as Alibaba, Ant Financial, Huawei’s Hangzhou Research Institute, NetEase, Hikvision, Dahua Technology, and Inspur to be the first to land in Hangzhou and quickly expand nationwide. At present, Hangzhou has formed a digital economy leading platform enterprise group with Alibaba, Hikvision, Dahua, Inspur, and others as the leader, listed companies and unicorn enterprises as the backbone, and ‘mass entrepreneurship and innovation’ as the support.

Looking back on 2024, Hangzhou will accelerate the promotion of digital trade, intelligent manufacturing and technological innovation, the digital economy will continue to lead the development of the province, and emerging industries such as artificial intelligence, cloud computing and big data will grow rapidly. For example, in November, the construction of “China Cloud Valley” was launched in Hangzhou, with “intelligent computing cloud” as the core industry to create a new industrial landmark of Hangzhou’s “artificial intelligence +” strategy. By the end of 2026, the “China Cloud Valley” will promote the scale of the “intelligent computing cloud” industry to reach 550 billion yuan, laying a solid foundation for Hangzhou to build a world-class digital technology industry cluster.

In 2024, the proportion of the added value of the core digital economy industry in Hangzhou to GDP reached 28.8%, and the foundation of the digital economy continued to be solid, forming a digital technology industry system supported by core enterprises such as Alibaba Cloud and Hikvision for infrastructure construction such as computing power and visual recognition, providing a technological synergy and scenario landing soil for the development of technology enterprises such as the ‘Six Little Dragons’ in Hangzhou.

Promote the integration of digital and real Depth

However, in the rapid development of the digital economy, Hangzhou’s industrial structure has faced the problem of industrial strength being inferior to the digital economy, and promoting the integrated development of the digital economy and the real economy has become a key focus of work in Hangzhou.

To promote the simultaneous development of the manufacturing industry and the digital economy, Hangzhou proposed the ‘New Manufacturing Plan’ in 2019, encouraging enterprises to carry out major technological transformations with digitalization, networking, and intelligentization as the main line, and realizing the ‘dual-engine’ driving of the digital economy and the manufacturing industry in the overall economic development. Starting in 2022, Hangzhou further initiated the creation of five industrial ecosystems, including smart IoT, biopharmaceuticals, high-end equipment, new materials, and green energy, to promote industrial foundation restructuring and industrial chain enhancement.

The integration of data and reality is not only reflected in the manufacturing industry, but also in Hangzhou, where urban digitization is a major manifestation of the city’s promotion of the integration of data and reality. The construction of the urban digital operation and management service system has also guided the development of the digital industry and improved the city’s industrial ecosystem.

“To truly unleash the power of data intelligence, it is necessary to integrate data as a production factor with industries, develop new formats and models, and eventually form digital industrial chains and industry clusters. Therefore, digital services that originate from industry demands, are applicable to specific scenarios, and truly generate effective value are more important.” Fang Yi, Chairman of Daily Interactive, said in an exclusive interview with Securities Times.

In terms of urban digitalization, Daily Interactive and ecological enterprises have launched the “Digital Intelligence Green Wave” product, which uses big data and AI technology to mine relevant data valuable for traffic management from the huge and complex Internet data, helping the urban traffic management department to complete the intelligent timing of traffic lights and the intelligent regulation and control of the green wave belt, which can save about 20 minutes of commuting time for citizens every day.

As of now, ‘Digital Green Wave’ has been implemented in more than 20 cities including Hangzhou, Wenzhou, and Tianjin, with over 600 green wave belts constructed, covering a total distance of over 1000 kilometers, and achieving an average road speed increase of over 20%. Such achievements undoubtedly provide a vivid example for digital management and offer a development mindset and practical path for more cities to learn from.

“From 2019 to 2024, the number of motor vehicles in Hangzhou increased by 57%. In recent years, the restriction on driving based on license plate numbers has been lifted, resulting in a 20% increase in vehicle speed. Moreover, the implementation cost is also very low. ‘Intelligent Green Wave’ has saved a considerable amount of time for the general public,” Fang Yi pointed out.

Hangzhou City Brain Co., Ltd. is one of the technical forces in the construction of Hangzhou City Brain, and Depth is involved in the construction and operation of Hangzhou City Brain’s digital cockpit and application scenarios, the ‘Hangzhou Asian Games Run’ APP, and other system platforms.

Hangzhou City Brain Co., Ltd. General Manager Shen Yongsheng also told Securities Times reporters that Hangzhou has obvious advantages in the integration of data and reality, leading in digital infrastructure, strong innovation awareness, complete data application system, rich and vivid data. It has created successful innovative cases in digital governance, urban services, business environment, and other aspects.

In Hangzhou, the construction of the city brain is an important measure to implement the city’s digitalization, and Hangzhou takes “making digital indicators alive and moving, using data to find problems, and promoting the implementation of problems” as the construction guide, and builds a logical framework for the city-level platform, district and county (city) platform, township street platform and departmental system.

According to Shen Yongsheng, starting from 2023, Hangzhou Urban Brain Limited Company will focus on urban governance application scenarios, relying on urban big data and big model technology to build vertical big model technology products. In June 2024, the company’s social governance big model algorithm officially obtained the filing registration number, which means that the company’s social governance big model products can officially provide generative artificial intelligence services to the public. Currently, this big model product has been applied in the “One Network Unified Management” field of cities such as Wenzhou, Zibo in Shandong.

“In the era of data elements, the company is making full efforts to advance into the field of intelligent governance industry, giving play to the team’s research and development advantages accumulated in the field of urban governance, creating two technical algorithm products, ‘Social Governance Big Model’ and ‘Government Counsel Big Model’, and entering the high-quality market track.” Shen Yongsheng said.

The digital economy and the technology industry are developing in tandem

Thanks to the empowerment of the digital economy, Hangzhou is accelerating the planning and layout of technology-related industries, further promoting the integration of digital and Depth reality. Guided by policies, the development direction of Hangzhou’s technology-related industries is becoming more clear.

Back in 2021, Hangzhou explicitly stated in the 'Hangzhou Artificial Intelligence Industry Development ‘14th Five-Year Plan’ that by 2025, the operating income of the artificial intelligence industry will reach over 300 billion yuan, making it a city leading the global influence in artificial intelligence. As a highland for the gathering of Zhejiang’s artificial intelligence industry, Hangzhou has gathered 36.5% of the province’s core artificial intelligence enterprises. In 2023, the operating income of Hangzhou’s artificial intelligence industry reached 256.38 billion yuan, accounting for 45% of the total in the province.

According to the data from the Hangzhou Municipal Bureau of Statistics, in 2021, the proportion of cloud computing and big data in Hangzhou’s digital economy reached one-third, ranking first in the domestic market share of cloud computing and big data, and ranking first in the Asia-Pacific market share of cloud computing infrastructure as a service (IaaS).

In 2023, Hangzhou proposed the “1+7+N” future industry incubation action again, taking the field of artificial intelligence as a breakthrough, with metaverse, synthetic biology, future networks, general intelligent robots, quantum technology, advanced energy, cutting-edge new materials, and other seven areas as the key directions, nurturing N future industry pilot zones.

Future industries refer to forward-looking emerging industries that are driven by cutting-edge technologies and are currently in the embryonic or early stages of industrialization. The 9 future industries announced by the Ministry of Industry and Information Technology include metaverse, brain-computer interface, quantum information, humanoid robots, generative AI, bio-manufacturing, future displays, future networks, and new energy storage, etc.

As of December 2024, Hangzhou has four provincial-level future industry pilot zones, distributed in Xiaoshan District, Xihu District, Qiantang District, etc., aiming to achieve future technological breakthroughs and industrialization, focusing on areas such as generative artificial intelligence, metaverse, synthetic biology, etc., to create a new platform for industrial development. Among them, the Hangzhou synthetic biology pilot zone plans to achieve a total output value of 40 billion yuan by 2026 and build a nationally leading benchmark city for synthetic biology.

In order to build a good innovation ecosystem, Hangzhou actively promotes the construction of new R&D institutions. In recent years, the Hangzhou Chengxi Science and Technology Innovation Corridor has focused on building a global innovation source, accelerating the improvement of innovation platform capabilities, actively constructing a new laboratory system, and adding 12 national-level innovation platforms in the corridor in the past year, with 5 provincial-level laboratories, accounting for 50% of the total number in Zhejiang Province.

“Hangzhou Six Little Dragons” Leading the New Technological Journey

Since the Spring Festival of the Year of the Snake, many innovative enterprises from Hangzhou, such as DeepSeek, Game Science, Yushu Technology, Cloud Deep Technology, Strong Brain Technology, and Qunhe Technology, have quickly emerged as a focus of public opinion and have been collectively known as the “Six Little Dragons of Hangzhou”.

Counting the brilliant record of the ‘Six Little Dragons of Hangzhou’, half a year ago, Game Science launched China’s first large-scale 3A game ‘Black Myth: Wukong’, winning the TGA award for the first time in Chinese gaming history; DeepSeek emerged in the field of AI large models, training globally competitive large models with innovative technical paths and powerful computing support, showing outstanding performance in natural language processing, image recognition, and even causing NVIDIA to evaporate 4 trillion market value overnight; Yushu Technology’s humanoid robot H1 appeared on the CCTV Spring Festival Gala stage, wearing a red cotton-padded jacket and performing the Northeast Yangge dance with a red handkerchief.

Yunshenchu Technology’s robot dog also performed well, not only widely used in the domestic market but also successfully entered overseas markets such as the Singapore power grid; Qiangnao Technology focuses on the field of brain-computer interfaces, making important breakthroughs in technical research and product applications, competing with the international giant Neuralink, and is currently the only brain-computer interface company in the world with a financing of more than 300 million U.S. dollars; Qunhe Technology has made significant achievements in cloud design software systems, establishing the world’s largest indoor scene cognitive data set, and recently submitted a Hong Kong IPO application.

The well-developed digital economic industrial chain in Hangzhou provides a good industrial ecosystem for the development of the ‘Six Small Dragons of Hangzhou’, while on the other hand, the development of the ‘Six Small Dragons of Hangzhou’ cannot do without the strong support of the Hangzhou government.

For example, the Yichuang Creative Town in Xihu District provides a maximum of 100% rent subsidy or exemption to digital content enterprises such as gaming science; Xihu District has set up a ‘anti-disturbance office’ to minimize disturbance to enterprises as much as possible, providing a quieter entrepreneurial environment for enterprises and entrepreneurs. An engineer from Yunshenchu once revealed that during the development of the Jueying series at the company, the Hangzhou municipal government assisted in providing a complete experimental site, allowing their team to conduct a large amount of patrol function verification, including field testing of robotic dogs.

“Hangzhou has a government that understands entrepreneurs better. In the development of the digital economy industry, Hangzhou has achieved a perfect combination of a proactive government and an efficient market, integrating policies into the business environment, and building a complete entrepreneurial ecosystem including government, prestigious universities, benchmark enterprises, investors, and entrepreneurs. The policies not only can remove obstacles for business development, but also provide support at key stages. At the same time, in order to address the issue of insufficient attention from companies to policies, Hangzhou has launched a direct policy system to increase awareness of policies,” Fang Yi told reporters.

Fang Yi also pointed out that Hangzhou, led by giant companies such as Alibaba and NetEase, has formed a diverse digital economic industrial ecosystem covering companies with billions and tens of billions of levels. “DeepSeek, Game Science, Yushu Technology and many other innovative companies have emerged successively, breaking the previous situation of monopoly, injecting vitality into the market.”

(Source: Securities Times·e Company)

Source: East Money

Author: Securities Times · e Company