Hangzhou, paradise by the lake

Hangzhou, the capital of Zhejiang province, has 12.7 million inhabitants and generated a GDP of 2.30 trillion yuan in 2025, up 5.2 per cent on the previous year. It is the city of Alibaba and Geely, and since 2025 also of DeepSeek and Unitree's robots. What makes Hangzhou special is who drives that growth: private entrepreneurs rather than state-owned companies or foreign investors. Anyone who wants to see how quickly Chinese AI and robotics move from lab to market will find the clearest example here. The China Business Mission 2026 delegation had the city on its programme on 13 and 14 October, 45 minutes by train from Shanghai.

Five thousand years by the lake

North-west of the city, the Liangzhu culture built a walled city with dams and jade workshops some five thousand years ago, a World Heritage Site since 2019. Hangzhou itself received its name in 589, and the Grand Canal turned it into a trading hub. Under the Southern Song the city was China's capital from 1138 and probably one of the largest cities in the world. Marco Polo described it in the late 13th century under the name Kinsay.

The heart of the city is West Lake, a lake of 6.39 square kilometres with causeways, pagodas and gardens, a World Heritage Site since 2011. One of those causeways was built in 1089 by the poet and governor Su Dongpo, using the silt he had dredged from the lake. Every Chinese person knows the saying 上有天堂，下有苏杭: above is heaven, below are Suzhou and Hangzhou.

An economy built by entrepreneurs

In 1978 Hangzhou's GDP was barely 2.8 billion yuan, according to the city newspaper Hangzhou Daily 0.8 per cent of the Chinese economy. Growth came from the bottom up: small private firms in textiles, machinery and trade, later followed by the internet. Jack Ma founded Alibaba in his flat in 1999, and Taobao and Alipay then made the city China's e-commerce capital. In 2015 GDP passed one trillion yuan for the first time, and in 2023 it passed two trillion.

Geely, started by Li Shufu in 1986, bought Volvo Cars in 2010 and sold 4.12 million vehicles across all its brands in 2025. That entrepreneurial profile still shows in the figures. In the first three quarters of 2026 GDP grew by 5.2 per cent, 0.6 percentage points faster than the national average. Over the same period private companies accounted for 78.3 per cent of the city's exports, and goods trade grew by 15.4 per cent. The local government likes to see itself as a service provider, with digital counters, fast permits and funds for young tech companies.

AI and robots: from DeepSeek to Unitree

In early 2025 Hangzhou acquired a new nickname. DeepSeek released its R1 reasoning model in January, and Unitree had robots dancing at the Chinese New Year gala. Together with Game Science, BrainCo, Deep Robotics and Manycore they have since been known as Hangzhou's six little dragons. The figures followed: the city's core AI sector posted revenue of 460 billion yuan in 2025, up 23.1 per cent. In the first three quarters of 2026 the total already stood at 429.8 billion yuan, according to the city's statistics bureau, a rise of 28.6 per cent.

The clearest signal came on 19 August 2026, when Unitree listed on Shanghai's STAR Market. The shares, issued at 150.8 yuan, opened 629 per cent higher, and the company raised 6.1 billion yuan. Unitree shipped more than 5,500 humanoid robots in 2025, 32.4 per cent of the global market according to Xinhua. According to IDC, three Hangzhou companies are among the world's top five suppliers of quadruped robots. For European companies this means that the prices of robots, and the speed at which they appear in factories, shops and care, are largely set here.

The Belgian link: from Jesuit to Volvo

The oldest link is a Jesuit. Nicolas Trigault, born in 1577 in Douai, then part of the Southern Netherlands, translated Matteo Ricci's journals into Latin and so gave Europe one of its first thorough descriptions of China. In 1620 he arrived in Macau with some 7,000 books. He died in Hangzhou in 1628.

The strongest link today runs through Ghent. Since Geely took over Volvo Cars in 2010, the future of Volvo Car Gent has partly depended on decisions made in Hangzhou and Gothenburg. On 15 July 2026 Volvo Cars signed a memorandum of understanding with the Belgian federal and Flemish governments on a support package of up to 119 million euros, linked to investment in the plant. Ghent could also assemble cars for other brands.

The third strand is e-commerce. In August 2020 the first Air China Cargo flight for Cainiao, Alibaba's logistics arm, landed in Liège from Hangzhou. In November 2021 Cainiao opened its largest European hub there. Since 1 July 2026, importers of parcels worth up to 150 euros from outside the EU pay a customs duty of 3 euros per item category, which changes the economics of that route.

Tea, silk and osmanthus

Hangzhou lives to the rhythm of the lake and the tea hills. Longjing, China's best-known green tea, grows in the hills west of West Lake. The city is also an old silk city and home to the China National Silk Museum. Its cuisine is mild and fresh: Dongpo pork, pork belly braised for hours and named after Su Dongpo, West Lake vinegar fish and shrimp with Longjing tea. In autumn the city smells of osmanthus, its official flower.

What Hangzhou shows Europe

Hangzhou shows how fast a Chinese city can move when entrepreneurs, universities and a pragmatic city government pull in the same direction. In ten years the economy has more than doubled, and a company that started as a start-up in 2016 now sells humanoid robots around the world. For European companies the city is therefore a mirror: here you can see which products will compete in the European market within a few years, and at what price. Partners are found mainly in the private sector, and Belgian links through Ghent and Liège already exist. How Shanghai, one train ride away, works as the gateway to the region is explained in the article on Shanghai.