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Eight great ones embody growth, optimism and the good life 

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NEARLY 12m STUDENTS will graduate from Chinese universities this month. Where they go after that is increasingly difficult to predict. For decades graduates were drawn to the same four cities: Beijing, the capital; Shanghai, a financial hub; Shenzhen, a tech centre; and Guangzhou, an export powerhouse. There were opportunities in these places. Their economic heft exceeded that of other Chinese cities. Their public services were better, too. And they were huge, with populations that now range from 13m (Shenzhen) to 26m (Shanghai). As a result, they were dubbed “first-tier” cities. Chinese flocked to them.

Now, though, a large number of graduates are looking beyond the top tier. In recent years China’s lesser-known cities have proved more magnetic. These rising metropolises come from the ranks of the second tier. There are 31 cities on this level, according to the government, which sorts them based on criteria like population and income level. Not all are thriving, but many stand out for their dynamism, culture and quality of life. Some are developing in ways that other Chinese cities might emulate.

The list of risers includes places from across China. In the west, Xi’an, Chengdu and Chongqing are attracting young tech workers and social-media influencers. In the centre, Wuhan, Hefei and Changsha are home to entertainment companies and electric-vehicle manufacturers. Nanjing and Hangzhou in the Yangzi river delta feature venture-capital firms and startups. Some people refer to these places (and others) as “new first-tier” or “1.5-tier” cities. But we’ll call them the “great eight”—a group that is gaining ground on the “flagging four” of old.

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These eight tend to have fewer people than the four behemoths. But their populations are growing faster (see chart 1). China’s overall birth rate has fallen to below replacement level, which means its population of 1.4bn is shrinking. The number of people in first-tier cities has grown by just 1.7% on average over the past four years. In the great eight there was growth of 18%. These cities are already giants by Western standards, with an average population of around 10m.

While some of their new inhabitants come from rural areas, many migrate from other cities. A recent survey by Zhaopin, a recruitment company, found that white-collar workers preferred leading second-tier cities to bigger or smaller alternatives. One reason is the infrastructure, which is already high-quality—and improving. Dotted with skyscrapers, these cities feature four of the ten tallest buildings under construction worldwide. Over the past five years, the total length of their subway networks has doubled.

As Beijing and Shanghai grew, in some ways they became less welcoming to outsiders. Both cities strictly enforce China’s hukou system of household registration, excluding non-locals from schools and city pension schemes. Even if newcomers could settle down, they would have trouble affording a home. In first-tier cities median house prices are typically 30 to 40 times higher than median incomes.

Map: The Economist

In contrast, most second-tier cities have flung open their doors by largely scrapping hukou restrictions. They even offer incentives to come. Changsha is giving “national top talents” a 1.5m-yuan ($200,000) reward to move there. Hangzhou is offering startup founders with PhDs up to 15m yuan in funding. Those who do not qualify for such payments may still see a financial benefit in moving to the second tier, where housing is much more affordable (see map).

This new migratory flow has coincided with changing attitudes among young Chinese. Salaries tend to be higher in Beijing and Shanghai, but these days many youngsters are prioritising quality of life. Whereas first-tier cities have become associated with the “996” culture—meaning a work schedule of 9am to 9pm, six days a week—jobs in leading second-tier cities tend to offer a better work-life balance.

Just ask Gong Zhenghua, a young tech worker who moved to Chengdu after years in Guangzhou and Shanghai. His new home offers shady tree-lined canals and spicy hotpot restaurants. His wages are lower, but he can afford to rent an apartment that is three times bigger than his previous one. He is enjoying life more. Mr Gong hopes to buy a house and start a family soon, goals which seemed unfeasible in the first-tier cities.

Whereas Mr Gong had to move in order to improve his life, others are simply staying put. Cities from the great eight often top rankings of “stickiness” for university graduates, or the proportion who choose to work in the city where they studied. That, in turn, adds to these cities’ dynamism. All of them have universities that rank in the top 5% in China.

Chart: The Economist

The great eight account for about a tenth of China’s GDP, which grew at an average annual rate of 6% over the past decade. The growth rate in first-tier cities was about that, too. But the leading second-tier cities sped ahead. Their economies grew by 7.2% per year on average (see chart 2).

Hefei is sometimes seen as having established a model for second-tier cities. Using a mix of local-government investment, industrial policy and private-sector encouragement, it has cultivated industries like high-end manufacturing, electric vehicles (EVs), biotech and semiconductors. Being home to the University of Science and Technology of China (USTC), the country’s top tech college, as well as other good schools, has also helped. The local government draws on this pool of talent: it is stocked with engineering and science graduates. Volkswagen, a German carmaker, has praised the business environment. It already has two manufacturing plants in the city. Now it is spending another $2.7bn to expand its innovation centre in Hefei to further its EV ambitions in China.

Hefei’s state capitalists have shown unusual daring in their investments. That is something other cities might copy. Indeed, some in the great eight are doing similar things. Nanjing, for example, has focused on technology firms, poaching many that have left Beijing in recent years. It lures them with good infrastructure and generous subsidies. Both it and Hefei have fast-growing venture-capital sectors.

Other members of the great eight are charting their own course. One such city is Chengdu. Economists often criticise China for relying too much on manufacturing and not rebalancing towards higher-value services and consumption. China’s leaders, who like factories, tend to ignore such advice. But Chengdu has embraced it. Over the past decade the service sector’s share of GDP in the city has risen from 50% to 68% (the national average is 55%). Chengdu’s service firms are growing more than twice as fast as its manufacturing ones. It is a showcase for how China’s cities can build a more balanced economy, says Robin Xing of Morgan Stanley, a bank.

Cultivating the softer side of the economy also has cultural benefits. Chengdu’s music industry is booming thanks to a thriving hip-hop scene—and government support. Officials have a five-year plan for the industry, which they hope will be worth 100bn yuan by 2025. The city also attracts throngs of tourists and internet celebrities, who film themselves eating, drinking and dancing. When your correspondent visited Chengdu’s bar district—strictly for the purpose of reporting—it was far busier than the most popular drinking area in Beijing. A number of cities in the great eight have a more liberal vibe than those elsewhere in China.

But they also have disadvantages. Being inland, they will always struggle to attract more investment than China’s coastal cities. Exporters are more likely to build factories near ports. Most of those in the second tier are also still behind in the services they offer. Some businessmen complain that the officials on the other end of government hotlines in second-tier cities are less responsive than those in the first tier. Executives would still rather send their children to school in Beijing or Shanghai.

In order to continue their ascent, the great eight must keep investing wisely in themselves. Tianjin offers a cautionary tale of how it could all go wrong. The once-vibrant city near Beijing has a busy port and good universities. But corrupt officials wasted funds on a new financial district and a high-tech zone, both of which remained empty for years. Rising labour costs took away its advantage in manufacturing. Since 2017 Tianjin municipality has gone from being China’s sixth-biggest city by GDP to its 11th. Its population is shrinking. The great eight have come a long way. But there is no guarantee that they will continue to rise. ■

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.css-1h7zq19{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;-webkit-align-items:flex-start;-webkit-box-align:flex-start;-ms-flex-align:flex-start;align-items:flex-start;margin:1.3125rem 0 2.1875rem 0;gap:var(–mb-spacing-sm);}@media (min-width: 60rem){.css-1h7zq19{-webkit-flex-direction:row;-ms-flex-direction:row;flex-direction:row;gap:var(–mb-spacing-sm);}}.css-1h7zq19 nav{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-box-flex-wrap:wrap;-webkit-flex-wrap:wrap;-ms-flex-wrap:wrap;flex-wrap:wrap;gap:var(–mb-spacing-sm);-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;}.css-rb5rp6{font-family:var(–mb-typeface-sans);font-size:var(–mb-typestyle-title-1-size);font-style:normal;font-weight:var(–mb-font-weight-regular);line-height:var(–mb-typestyle-title-1-leading);font-variant:var(–mb-typestyle-title-1-figures);white-space:nowrap;-webkit-align-self:start;-ms-flex-item-align:start;align-self:start;}@media (min-width: 60rem){.css-rb5rp6{padding-top:var(–mb-spacing-2xs);}}

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China.css-2x8c4j{margin:0.875rem 0;}.css-2x8c4j .e12sz0jx0+*{margin-top:0.875rem;}.el1rg701+.css-2x8c4j{margin-top:0;}.css-1aogxph{color:var(–mb-colour-greyscale-london-20);font-family:var(–mb-typeface-sans);font-size:var(–mb-typestyle-label-2-size);font-variant:var(–mb-typestyle-label-2-figures);line-height:var(–mb-typestyle-label-2-leading);}.css-1aogxph s,.css-1aogxph del{-webkit-text-decoration:line-through;text-decoration:line-through;text-decoration-thickness:0.0625rem;}.css-1aogxph b{font-weight:var(–mb-font-weight-semibold);}.css-1aogxph i{font-style:italic;}.css-1aogxph sup{font-feature-settings:’sups’ 1;}.css-1aogxph sub{font-feature-settings:’subs’ 1;}.css-1aogxph u{text-decoration-thickness:0.0625rem;}.css-1aogxph a{color:var(–mb-colour-greyscale-london-20);-webkit-text-decoration:underline;text-decoration:underline;text-decoration-thickness:0.0625rem;text-underline-offset:0.1875rem;}.css-1aogxph a:hover,.css-1aogxph a:focus,.css-1aogxph a:active{text-decoration-thickness:var(–mb-spacing-3xs);}.css-1aogxph a:hover{color:var(–mb-colour-base-chicago-30);}.css-1aogxph a:hover span{text-decoration-color:var(–mb-colour-base-chicago-30);}.css-1aogxph a:focus{background-color:var(–mb-colour-base-chicago-90);color:var(–mb-colour-greyscale-london-5);text-decoration-color:var(–mb-colour-greyscale-london-5);outline:none;}.css-1aogxph a:active{background-color:var(–mb-colour-base-chicago-90);color:var(–mb-colour-base-chicago-30);text-decoration-color:var(–mb-colour-base-chicago-30);}

This article appeared in the China section of the print edition under the headline “The bright side of China”

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China

June 8th 2024

• →Watch out Beijing, China’s second-tier cities are on the up
• →Changes to China’s gaokao exam are about politics, not fairness
• →It’s a bird, it’s a plane…it’s a Chinese flying car
• →China unites America and Europe in alarm

.css-ra48xw{font-family:var(–mb-typeface-serif);position:relative;}.css-duuyjs{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;-webkit-box-pack:column;-ms-flex-pack:column;-webkit-justify-content:column;justify-content:column;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;text-align:center;-webkit-column-gap:var(–mb-spacing-lg);column-gap:var(–mb-spacing-lg);}.css-s61v3v{border-radius:0.125rem;box-shadow:-0.125rem 0.125rem 0.25rem 0 rgba(0,0,0,0.4);margin-bottom:0.75rem;min-width:10rem;max-width:12rem;}@media (min-width: 37.5rem){.css-s61v3v{min-width:12rem;}}.css-s61v3v img{display:block;max-width:100%;}.css-std7t4{max-width:16rem;}.css-nba04v{color:var(–mb-colour-greyscale-london-5);font-family:var(–mb-typeface-serif);font-size:var(–mb-typestyle-title-3-size);font-variant:var(–mb-typestyle-title-3-figures);font-weight:var(–mb-font-weight-medium);line-height:var(–mb-typestyle-title-3-leading);margin-bottom:0.25rem;}

From the June 8th 2024 edition

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Discover stories from this section and more in the list of contents

⇒Explore the edition.css-v7aorn{margin-top:0.875rem;}.css-v7aorn +.eq1asik0{margin-top:3rem;padding-bottom:0;}.el1rg701+.css-v7aorn{margin-top:0;}.css-9ejc71{position:relative;border-bottom:0;border-top:0.0625rem solid var(–mb-colour-greyscale-london-85);color:var(–mb-colour-greyscale-london-35);}.css-9ejc71 .ebxshaw0{margin-top:0;}.css-9ejc71 >.e5z0ibw0>*{padding:var(–mb-spacing-md) 0;}.css-9ejc71 >.e5z0ibw0>*:nth-of-type(2){border-top:0.0625rem solid var(–mb-colour-greyscale-london-85);}@media (min-width: 37.5rem){.css-9ejc71 >.e5z0ibw0>*:nth-of-type(2){border-top:0;}}.css-9ejc71 >.e5z0ibw0 .e5z0ibw0{gap:var(–mb-spacing-sm);}.css-yb4x8x{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;-webkit-align-items:stretch;-webkit-box-align:stretch;-ms-flex-align:stretch;align-items:stretch;-webkit-box-pack:start;-ms-flex-pack:start;-webkit-justify-content:flex-start;justify-content:flex-start;}@media (min-width: 37.5rem){.css-yb4x8x{-webkit-flex-direction:row;-ms-flex-direction:row;flex-direction:row;}}@media (min-width: 37.5rem){.css-yb4x8x{-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;}}@media (min-width: 37.5rem){.css-yb4x8x{-webkit-box-pack:end;-ms-flex-pack:end;-webkit-justify-content:flex-end;justify-content:flex-end;}}.css-1j1j36d{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-box-flex-wrap:wrap;-webkit-flex-wrap:wrap;-ms-flex-wrap:wrap;flex-wrap:wrap;row-gap:0.6rem;-webkit-column-gap:var(–mb-spacing-sm);column-gap:var(–mb-spacing-sm);}ShareReuse this content.css-169lzn0{position:relative;-webkit-align-self:auto;-ms-flex-item-align:auto;align-self:auto;display:none;}@media (min-width: 80rem){.css-169lzn0{grid-column-start:9;}}@media (min-width: 89rem){.css-169lzn0{grid-column-start:13;}}@media (min-width: 80rem){.css-169lzn0{grid-column-end:13;}}@media (min-width: 89rem){.css-169lzn0{grid-column-end:17;}}@media (min-width: 80rem){.css-169lzn0{grid-row-start:1;}}@media (min-width: 80rem){.css-169lzn0{grid-row-end:span 4;}}@media (min-width: 80rem){.css-169lzn0{display:block;}}.css-169lzn0:last-child::after{height:0;}.css-1y1zooy{display:inline;}.css-1y1zooy >*+*{margin-top:2rem;}.css-1y1zooy >*:only-child{margin-top:1.25rem;}.css-1y1zooy >*:last-child{position:-webkit-sticky;position:sticky;top:1.5rem;}.css-mqgbir{margin-top:6rem;}.css-mqgbir .ds-section-headline{margin-bottom:1rem;}

More from China

@media (min-width: 60rem){.css-1os14tz .e141dkbw0 .e141dkbw0:last-of-type{padding-bottom:1.5rem;}}@media (min-width: 60rem){.css-1os14tz .e141dkbw0 .e141dkbw0{padding-bottom:1.5rem;}}@media (min-width: 80rem){.css-1os14tz .e141dkbw0 .e141dkbw0{padding-bottom:0;}}@media (min-width: 60rem){.css-1os14tz .e141dkbw0>hr+.e11kl3g90:last-of-type{padding-bottom:1.5rem;}}@media (min-width: 60rem){.css-1os14tz .e141dkbw0:nth-of-type(5){padding-bottom:1.5rem;}}.css-1os14tz .e3mhczn0 .e3mhczn0{margin-top:-0.25rem;}@media (min-width: 80rem){.css-1os14tz .e141dkbw0:nth-of-type(3) .e3mhczn0{margin-top:0;}}.css-114o6rp{display:grid;grid-auto-flow:row;grid-column-gap:var(–mb-responsive-grid-gutter);grid-row-gap:2.75rem;grid-auto-columns:1fr;margin-left:auto;margin-right:auto;max-width:89.5rem;overflow:hidden;position:relative;grid-row-gap:1.5rem;grid-template-areas:”group1″ “line” “group2” “line2” “group3″;}@media (min-width: 60rem){.css-114o6rp{grid-template:auto/repeat(12, minmax(0, 1fr));}}@media (min-width: 60rem){.css-114o6rp{grid-template-areas:”group1 group1 group1 group1 group1 group1 group2 group2 group2 group2 group2 group2” “line line line line line line line line line line line line” “group3 group3 group3 group3 group3 group3 group3 group3 group3 group3 group3 group3″;}}@media (min-width: 80rem){.css-114o6rp{grid-template-areas:”group1 group1 group1 group1 group2 group2 group2 group2 group2 group3 group3 group3″;}}.css-1f07iwu{grid-area:group1;position:relative;-webkit-align-self:auto;-ms-flex-item-align:auto;align-self:auto;}.css-1f07iwu::after{background-color:var(–mb-colour-greyscale-london-85);content:”;height:100%;position:absolute;right:-1rem;right:calc(-1 * var(–ds-grid-gap));top:0;width:1px;}.css-1f07iwu:last-child::after{height:0;}.css-12lyffs{position:relative;width:100%;margin-top:0;overflow:hidden;display:block;}.eeawncf0 .css-12lyffs,.e1ns5z760 .css-12lyffs{margin-top:0;margin-bottom:0;}@media (min-width: 22.5rem){.eeawncf0 .css-12lyffs,.e1ns5z760 .css-12lyffs{margin-top:0;margin-bottom:0;}}@media (min-width: 37.5rem){.eeawncf0 .css-12lyffs,.e1ns5z760 .css-12lyffs{margin-top:0;margin-bottom:0;}}@media (min-width: 60rem){.eeawncf0 .css-12lyffs,.e1ns5z760 .css-12lyffs{margin-top:-0.25rem;margin-bottom:0;}}@media (min-width: 80rem){.eeawncf0 .css-12lyffs,.e1ns5z760 .css-12lyffs{margin-top:0;margin-bottom:0;}}.e1ft9m2r0 .css-12lyffs{margin-left:0.75rem;margin-top:0;}@media (max-width:29.9375rem){.e1ft9m2r0 .css-12lyffs{padding-top:0.375rem;}}.css-koo8ga{position:relative;float:none;width:100%;margin:0;padding:0;}.css-koo8ga img{display:block;}.css-koo8ga svg{bottom:0;display:block;left:0;position:absolute;width:15%;}.css-koo8ga+.exn4l0u0{margin-top:0.5rem;}.css-koo8ga+style+.exn4l0u0{margin-top:0.5rem;}.css-koo8ga+.e9vcwtd0{margin-top:0.5rem;}.css-koo8ga+style+.e9vcwtd0{margin-top:0.5rem;}.css-koo8ga+.e1etum70{margin-top:0.5rem;}.css-koo8ga+style+.e1etum70{margin-top:0.5rem;}.css-fjl2tu{font-family:var(–mb-typeface-serif);font-size:var(–mb-typestyle-title-4-size);font-variant:var(–mb-typestyle-title-4-figures);font-weight:normal;line-height:var(–mb-typestyle-title-4-leading);}.css-fjl2tu a{-webkit-text-decoration:none;text-decoration:none;color:var(–mb-colour-greyscale-london-5);display:block;}.css-fjl2tu a:hover,.css-fjl2tu a:hover{color:var(–mb-colour-base-chicago-30);-webkit-text-decoration:underline;text-decoration:underline;}.css-fjl2tu a:focus,.css-fjl2tu a:focus{background-color:var(–mb-colour-base-chicago-95);color:var(–mb-colour-greyscale-london-5);outline:none;-webkit-text-decoration:underline;text-decoration:underline;}.css-fjl2tu a:active,.css-fjl2tu a:active{color:var(–mb-colour-base-chicago-30);}.css-fjl2tu a::before{bottom:0;content:”;display:block;left:0;opacity:0;overflow:hidden;position:absolute;right:0;text-indent:-999em;top:0;white-space:nowrap;z-index:1;}.css-fjl2tu+.esimp700,.css-fjl2tu+style+.esimp700{margin-top:0.5rem;}.e1p220na0 .css-fjl2tu+.esimp700{margin-top:0;}

Chinese authorities try to stop parents gaming the exam system (again)

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They will go to great lengths to try

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China’s alarming sex imbalance

By 2027 one in six young Chinese men won’t be able to find a partner

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Behind DeepSeek lies a dazzling Chinese university

It models itself on Stanford, and is in the tech hotspot of Hangzhou

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Panama symbolises the Sino-American struggle for influence

The superpowers use soft and hard power

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Tensions with the West are fuelling China’s anxiety about food supplies

Grain pains are growing

Hail China’s new “ice-and-snow economy”

The country is betting on winter sports and tourism to boost growth in its rustbelt

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Источник: www.economist.com