Second & Third Tier Cities

The Next Wave of Growth: Second & Third-tier Cities

The 80’s belong to the cities at the Pearl River Delta, the 90’s belong to the cities at the Yangtze River Delta while the decade starting from 2000 belongs to the cities at the Bohai Economic Area formed by Beijing, Tienjin and the Bohai area towns. Moving forward into the decade starting from 2010, the inner cities in the West and those cities surrounding the coastal golden cities, commonly dubbed second- and third-tier cities are expected to have their turn for economic development. The second- and third-tier cities are very well placed to take over as the engine for growth as the central government via policy initiatives had prepared them for this role.

Second-tier cities are an important component of China’s urban system, they account for 84% of the total cities until 2004. They are playing an increasing role in urbanization, industrialization and transformation of the rural population into urban. In terms of cost of operation, supply of labor and infrastructure for connectivity and mobility; many of the second-tier cities such as Wuhan, Chengdu, Suzhou, Shengyang, Xian and Xiamen offer great advantages for businesses. Companies are not only able to consider exploiting the cost advantage of good infrastructure, it can also use these cities as their base to capture the vast emerging consumer markets in the interior region.

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