Classifying cities is not an easy task. Several companies use all sorts of data to release different lists. These lists are so relevant that companies use them to make financial and investment decisions. However, the Chinese government does not officially recognize any of these lists. Like most experts in the field, we will use city tiers in China. Likewise, we agree that Beijing, Shanghai, Guanzghou, and Shenzhen are tier 1 cities in China. Thus, our analysis will focus on emerging cities. We have used the criteria established by the reputed financial magazine Yicai, considered by many the most influential in China.
City Tiers in China – Classification
Coming up with the necessary data is not an easy task. Yicai collects information from 170 commercial brands and 18 internet companies. Amongst the things that Yicai analyzes, we find population, size, infrastructure, lifestyles offered, level of sophistication, and business opportunities. The company studies 337 Chinese cities. Only 119 of these make it to China’s 4 city tiers. Take note that administratively speaking, all 119 cities are at least prefectures.
As mentioned above, China’s first-tier cities are in a league of their own: Beijing, Shanghai, Guangzhou, and Shenzhen. The second tier is called New Tear 1 and includes 15 up and coming cities. Tier 2 has 30 cities while Tier 3, 70 cities. As useful as the ranking is, critics say it harms lower-ranked cities favoring bigger established ones. That said, the Chinese economy relies on this information heavily to allocate resources. In this article, we use the latest data from 2019.
China City Tiers – Methodology
As discussed, the first task is to gather a massive amount of information from different sources. Then, professionals analyze the data according to five indexes. Finally, and based on sophisticated algorithms, each index is weight according to the following:
- Commercial Resources Index weights 23% of the total. This index considers the number of brand stores, commercial districts, supermarkets, etc.
- Urban Residents Activity Index accounts for 21% of the total. Online shopping activity, Tik Tok users, number of bars, and night buses determine its value.
- Future Potential Index makes for the last 20% of the total. It considers the number of startups, air quality, consumption growth, and GDP growth, among other factors.
- Lifestyle Diversity Index is 19% of the total. It takes into account the number of museums, cafes, consumption diversity, and the number of travel destinations.
- City as a Hub Index weights 17% of the total. The number of high-speed railway stations, airports, packages sent and received, and connectivity with other areas are some of its factors.
China’s Tier 1 Cities
Nobody doubts that Beijing, Shanghai, Guangzhou, and Shenzhen are China’s Tier 1 cities. These four cities boast China’s most developed economies and biggest transport infrastructure. Not only that, but these massive cities have a major political and cultural influence in the country and, one could say, in the world. As you will see, several cities in China have grown at an incredible pace. However, these four cities have managed to stay at the top of the list.
Besides, professionals in the field are questioning the use of analyzing a city and thinking instead of large conurbations. Regarding the big 4, that wouldn’t change much. Even considering a wider definition of a metropolitan area, Beijing, Shanghai, Guangzhou, and Shenzhen would still remain at the top. After all, they are China’s most influential conurbations.
With the highest score, 184.53 points, Beijing has left all other Chinese cities behind. However, regarding population size and economic importance, Beijing trails Shanghai. Nevertheless, it remains the number 1 city on this list. Beijing is China’s political, educational, and cultural capital. What’s more, it has been China’s grandest city for centuries. Beijing is also home to China’s most extensive metro system and the largest airport, the world’s second-largest.
Though Shanghai topped the list in 2018, in 1919, it took the second spot. Indeed, in 2019 Shanghai scored 178.73, slightly less than Beijing. Shanghai is China’s most populated city and its financial powerhouse. The port of Shanghai is the world’s largest. Hence, the city is one of China’s main trade centers. Shanghai is also China’s wealthiest city and a magnet for foreign investment. Besides, the city is an important transportation hub with the second busiest airport in the country, Pudong.
Another city that has made the top four since the beginning of the ranking is no surprise either. Guangzhou scored 118.91 in 2019, way behind Shanghai and Beijing. However, Shenzhen is growing at such a pace that it could soon occupy the third position. Without a doubt, Guangzhou is the most important city in Southern China. Hence, the city is one of China’s biggest cultural and educational centers. It is also a massive manufacturing hub, with all types of industries setting factories and offices in the city. The world-famous Canton Fair is part of Guangzhou’s legacy.
In 2018, Shenzhen was in third place. However, with 116.45 points in 2019, it trailed closely behind Guangzhou. Unlike the first three cities on this list, Shenzhen is not considered a traditional cultural center. On the contrary, the city is modern, with a short past. That said, Shenzhen excels in science and new technologies. Therefore, it is China’s most competitive city and the one with the brightest future.
New First Tier Cities in China
Several upcoming cities rival the economic importance and cultural influence of the top four. These are included in Yicai’s category New first tier cities in China. As we have discussed above, there are 15 cities from different parts of the country in this category. Chengdu, Hangzhou, Chongqing, Wuhan, and Xi’an follow the big four. The next are Suzhou, Tianjin, Nanjing, Changsha, and Zhengzhou. The cities of Dongguan, Qingdao, Shenyang, Ningbo, and Kunming complete the list. Though Dalian, Wuxi, and Xiamen made the cut in the past, today they are in the Second tier. On the other hand, Kunming entered the new first tier city list for the first time in 2019.
Chengdu is poised to make it to the old first tier, together with Shanghai, Beijing, Guangzhou, and Shenzhen. It leads the charts in 3 of the 5 different indexes of the new tier 1 city list. Overall, it scored 100 points. Chengdu is the most important city in Western China. It is a cultural, educational, and financial center of great importance. Chengdu is renowned for its mechanical and automobile industry, information technology, and food processing.
Hangzhou scored 100 points in the Urban Resident Activity and Future Potential indexes. Overall, it is the second new tier 1 city with 90.41 points. Hangzhou is a modern city close to Shanghai. According to a recent study, Hangzhou ranked first in China in business opportunities. Forbes named Hangzhou as the best commercial city in China. A hub of internet giants from all over the country, the city is the home of the tech giant Alibaba. Hangzhou’s Zhejiang University is one of China’s top educational institutions.
Chongqing ended up on the third position scoring 89.71 points. The Central government separated Chongqing from Sichuan in 1997 to accelerate its growth. Since then, it has grown so much that today it is China’s third most populated city. Chongqing is the country’s largest motorcycle producer. It is also the third-biggest producer of all motorized vehicles. Additionally, it hosts Asia’s largest aluminum plant. In recent years, it has become an important transportation hub.
Wuhan is in the 4th position with 78.0 points. It excels in Lifestyle Diversity. Wuhan is the most populated city in central China and the country’s main transportation hub. China’s main highways and railways connecting the east to the west and the north to the south pass through the city. Wuhan is also the national leader in innovation. It hosts several scientific and technological development zones. One of the largest car companies in China is headquartered in Wuhan.
Of all the cities on the list, Xi’an has climbed the most. Last year it ended up in the fifth position with 77.75 points. However, it was second to Chengdu in the City as a Hub category. Xi’an is one of the most traditional cities on this list. In fact, due to its numerous historical sites, it is one of China’s most popular tourist destinations. In recent years, it is leading the software-outsourcing industry in China.
Another city close to Shanghai to make it to the list is Suzhou. In 2019 Suzhou ranked 6th among the new first tier cities scoring 75.23 points. Suzhou has been China’s largest non-capital city for centuries. In the last four decades, its GDP has grown at an astonishing 14% each year, making it China’s fastest-growing city. Today it’s a major manufacturing center, China’s second-largest. Thanks to tourism, Suzhou has a well-developed service sector.
Though Tianjin is China’s fourth most populated city, it is nowhere near the four first tier cities. In 2019 Tianjin scored 71.33 points, exceeding only in Business Attractiveness. Tianjin is famous around China for its large Binhai economic zone. In fact, more than half of China’s Fortune 500 companies are headquartered in the city, earning it the name the Manhattan of China. It is also a technology hub, hosting the world’s fastest supercomputer.
Nanjing is one of the 10 most populated cities in China. However, its total score is 68.44. The city excels in Business Attractiveness. Regarding culture, Nanjing is second only to Beijing. Besides, it was the national capital several times. Nanjing is one of the leading educational and scientific centers in the country, home to several top universities. Due to the latter, the city excels in informational technology, environmental protection, and new sources of energy.
Hunan’s capital Changsha is 9th, with 60.59 points. The city performed the best in Business Attractiveness. For centuries, Changsha was the main trading point between Wuhan and Guangzhou. Today, Changsha is an important industrial center, and China’s top aluminum producer. It is also an important educational center, with one of the country’s leading universities. Since Changsha excels in innovation, cultural and creative industries dominate its economy.
Zhengzhou entered the list in 2017 and, since then, has held a stable position. In 2019, Zhengzhou scored 60.06, right after Changsha. The capital of the Henan Province is another major transportation hub. As part of China’s Belt and Road initiative, trains depart from Zhengzhou carrying goods all the way to Europe. Zhengzhou is a major industrial city, a leading producer of automobiles and buses. China’s biggest bus factory, Yutong, is here.
Dongguan is to Guangzhou what Hangzhou and Suzhou are to Shanghai. Only that Dongguan lacks historical and cultural importance. Some professionals in the field believe it should not be on the list. Nevertheless, it scored 56.97 points. In recent years Dongguan has become China’s electronics manufacturing hub. Recently, world-famous tech giant Huawei moved its data center here. The renowned red-light district is long gone, replaced by new shops.
Qingdao has been on the list since the beginning. Last year it had a total score of 54.25. Though it’s not its capital, it the most important city in the eastern province of Shandong. Qingdao is a major industrial center hosting one of China’s largest ports. It is one of the top cities in terms of investment climate and government effectiveness. China’s most famous beer brand Tsingtao is produced here. According to many locals and expats, it is China’s most livable city.
Shenyang is the only city in Northeast China to make it on the list. Its total score is 54.07, right behind Qingdao. Shenyang is the transportation hub of the northeast. Due to its location, the city serves as a connecting point between China, Russia, Korea, and Japan. Traditionally, Shenyang has always been a magnet for heavy industries. In recent decades, it has diversified its economy into new fields. The city is now a leader in the software, automotive, and electronic industries.
Once again at the bottom of the list, we find Ningbo, another megalopolis close to Shanghai. In 2019, Ningbo scored 53.67. Ningbo is famous for its immense port, the world’s second-busiest. In 1984, Ningbo was one of the first cities in China to build a special economic and development zone. Since then, special areas have mushroomed around the city. Because of its rapid economic growth, the United Nations considers Ningbo China’s most promising city.
The city is the newest addition to the list. With 52.27 points, Kunming has made it to the list in the last position. For most of its history, the capital of the Province of Yunnan was a traditional city, mainly dedicated to agriculture and mineral extraction. In recent years, Kunming has emerged as a logistics hub. The latter is due to its proximity to Myanmar, Thailand, Laos, and Vietnam. At the same time, the city has attracted heavy industries manufacturing machines, automobiles, and electrical equipment.