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What Hefei, China’s EV City, Says About the State of the Economy

Ultramodern factories churn out electric cars and solar panels in Hefei, an industrial center in the heart of central China. Broad avenues link office towers and landscaped parks. Subway lines open at a brisk pace.

Yet at Hefei’s market for construction materials, which fills 10 city blocks, local merchants are gloomy. Wu Junlin, a vendor of doors, has closed two of his three stores and laid off all but one of his dozen employees.

“I have been doing this for 20 years — after all these years, this year is the worst,” he said, sitting in his last store with no customers in sight.

Nowhere better showcases the opportunities and vulnerabilities of China’s economy than Hefei.

Government-directed growth in industries like electric vehicles and solar panels has turned China into the world’s export superpower, making Hefei a model for other Chinese cities. But a nationwide decline in…

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