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We establish a Rosen-Roback spatial equilibrium model which decomposes the total economic growth into the change of labor input, total factor productivity (TFP) and wage differences. We calculate the model-based contribution of the cities, especially megacities, to Chinese aggregate economy. By using data of 285 cities from 2002 to 2015, we find out that the model-based contribution of Shanghai, Shenzhen, Beijing and Guangzhou to aggregate growth turn out to be higher than what is simply inferred from the share in GDP. Factor decomposition shows that the positive impact of megacities on Chinese economy comes from the increase in TFP and the increase in labor input, while the megacities widen wage dispersion of the whole country, generating a negative effect on economic growth. "Counterfactual" studies show that for the period 2002-2015, the top-five megacities increase the Chinese aggregate economy by 25.33%, and if the top-five did not enlarge the wage dispersion, then the aggregate economy would increase by 40.42%. Our research also shows that the overall development of the Yangtze River Delta and the Pearl River Delta regions is more balanced, while the Beijing-Tianjin-Hebei region still have a long way to go to reach the coordinated development. Since no previous study has used city level data in China to analyze the impact of megacities on Chinese economy, our research will fill this gap. According to the empirical results, this paper puts forward two suggestions, one is to further reduce the wage dispersion in China, the second is to further coordinate the Beijing-Tianjin-Hebei region for more balanced development. [ABSTRACT FROM AUTHOR]