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China's second-tier cities booming
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These urban areas are not selected as endorsement cities in China and they do not top any kind of list. These urban areas are called 'second-tier cities' in China. They are attracting more and more tourists as well as investors from home and abroad. These cities are endeavoring to form their own unique character, attempting to evolve into Chinese versions of Chicago, Hawaii or Bangalore.

In an article from the Economist issued on July 28, 2007, titled China's Chicago, the author writes, "Deep in the heart of China, the hilly riverside city of Chongqing is burning with ambition and wreathed in a shroud of smog. Visitors are astonished by the scale and pace of its growth: shopping malls, expressways and a throng of skyscrapers, including one that looks like the Chrysler building. Work on a US$200m opera house is under way."

Chongqing's not the only city with a dream. Dalian, a coastal city in Liaoning Province, was also highlighted in the Wall Street Journal.

"This past weekend, US computer-chip giant Intel Corp. broke ground here on a new $2.5 billion factory that will employ 1,200 workers. The facility, which is expected to make chips for both domestic use and export, is the first such plant Intel has built in a developing country.

Last week, Dalian hosted one of the World Economic Forum's biggest gatherings outside its home base in Davos, Switzerland. The three-day conference attracted business leaders from around the globe."

And the foreign press also praises Cities on Hainan Island as beautiful and perfect places.

All these cities have the same advantages: cheaper labor costs, higher-speed development; more favorable local policies, fresher air and less traffic jams. More and more investors are attracted to second-tier cities such as Chongqing, Wuhan, Ningbo, Dalian, to name a few.

Kirby Jefferson, general manager of Intel's Dalian operations, said, "We looked at the tier-one cities, but Dalian had a lot more advantages." The local universities, for example, guaranteed a steady flow of workers. The relative lack of other foreign investors meant workers wouldn't be as likely to jump to another company. Also, he says, city officials were sophisticated and energetic.

Tharman Shanmugaratnam, Minister for Education & Second Minister for Finance in Singapore, said that many second-tier cities, even third-tier cities, will develop swiftly and will become economic poles securing the next economic growth stage in China.

Shanmugaratnam asserted that the first-tier cities are getting saturated with domestic and foreign enterprises. If a company decides to set up there, it will face fiercer challenges and competition. This offers second-tier and third-tier cities more business opportunities.

An official of World Bank said that some middle-sized cities in China have amazingly competitive advantages. The whole value of private enterprises of some cities has reached 75 percent of the gross industrial output value, whereas the state-owned enterprises only account for 25 percent of it. The level has approached that of developed countries in Europe and America. Middle-sized cities are becoming more energetic. They have set up an integrated industrial supply chain, formed a transparent government service system, created abundant employment opportunities and played an important role of making their citizens richer.

The second-tier cities still face challenges. They can't merely rely on the advantage of cheap labor costs, which is, of course, cheaper than first-tier cities such as Beijing and Shanghai but more expensive than those third-tier cities or slow growth cities, let alone those urban areas in Myanmar and Cambodia where labor costs are much cheaper than China.

Some people have raised opposition and criticism at China's urban development. The British paper The Guardian published an article titled: "Minister rails at China, land of a thousand identical cities", criticizing the architectural landscape of modern China. The article stated: "Many local governments were guilty of a blind pursuit of the large, the new and the exotic".

Whatever happens, everything in China is still in transition. As Xia Deren, the Major of Dalian City, said: "We must continue to advance because there are so many cities in China."

( by Chen Lin October 31, 2007)

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