Rising in the rankings . . .
Several southern Chinese cities have gained first-tier status, according to a newly published report, Most commercially charming cities in China. The report divides China’s cities into six tiers. Fifteen cities, mostly provincial capitals, have now joined established first-tier cities like Beijing, Shanghai, and Guangzhou. Of the 15 new tier-one cities, 10 are in the south. The lack of new industries and slower rates of development kept many northern cities off the updated list.
New destinations for talent and businesses . . .
The report ranks cities based on five dimensions: concentration of business resources, extent to which a city serves as a commercial hub, vitality of urban residents, diversity of lifestyle, and future dynamism. Because of growing economic opportunities and strong preferential support from local governments, many new first-tier cities are attracting talent and business. The number of new employees in these cities increased 34 per cent between 2016 and 2018, while employment in the older, established first-tier cities decreased by 17 per cent in 2018. Compared to the original first-tier cities, many new first-tier cities have lower costs of living and a better living environment.
New terrain for Canadian businesses . . .
Canadian businesses in China are mainly concentrated in the established first-tier cities along the east coast. Despite their advantages, these cities are becoming extremely expensive and highly competitive – the major reasons why many foreign companies in China have moved inland or to other Asian countries in recent years. Beijing and Shanghai’s share of Canadian investment also dropped in the 2015 to 2018 period. As a long-term strategy, Canadian companies should look beyond Beijing and Shanghai, and watch for opportunities in the markets of China’s new first-tier cities.