A bird's-eye view of Hangzhou. [Photo/CFP]

The Ministry of Commerce recently reported that Hangzhou's foreign direct investment reached $4.66 billion from January to June, marking a 3.9-percent year-on-year increase and positioning Hangzhou second in the nation, only behind Shanghai.

Notably, over 62 percent of the investment was directed toward the manufacturing sector.

Amid global economic challenges, such as slowed growth, increased debt risks, and geopolitical instability, what continues to attract foreign investors to Hangzhou?

Qin Shili, deputy director and chief researcher at the Regional Development Research Institute of Zhejiang Development and Planning Institute, attributes Hangzhou's robust growth to the strong development of digital, platform, and headquarters economies, alongside improvements in the business environment.

In the first half of the year, Hangzhou's manufacturing sector utilized over $2.9 billion in foreign investment, a surge of over 197 percent. The city is rapidly building comprehensive industrial ecosystems centered around smart IoT, biomedicine, high-end equipment, new materials, and green energy, which serve as key attractors for foreign capital.

Hangzhou West Lake. [Photo/CFP]

For instance, Stellantis acquired a stake in Leapmotor worth approximately 1.5 billion euros ($1.64 billion), with part of the investment realized in the first half of the year, ranking as Hangzhou's third-largest foreign investment project.

Global 500 companies like Germany's Bayer Group continue to invest in Hangzhou, establishing the only R&D center for Bayer Crop Science in China to strengthen local research capabilities.

"Hong Kong ranks first among all foreign countries and regions in cumulative investment in Hangzhou," said an official from the Hangzhou investment promotion bureau.

Hong Kong enterprises have invested a total of $252 billion in 8,187 projects in Hangzhou. In the first half of the year, the number of new enterprises and investments from Hong Kong continued to grow.

The Hong Kong Trade Development Council noted that Hangzhou's advanced digital economy, high number of listed companies (ranking fourth in the country), and leading talent net inflow rate provide invaluable innovation resources for Hong Kong. Furthermore, Hong Kong can leverage Hangzhou's rising status as a hub city to connect with abundant innovation resources in the Chinese mainland.