Putting the Numbers in Perspective
How large are China’s cities really? In the above bar charts, we create some perspective for you to really understand the opportunities available, especially in China’s third tier cities. We look at 5 categories, taking the averages for China’s first, second, and third tier cities and comparing them to Berlin, one of Europe’s most prosperous cities, to shed light on the differences in scale and development.
Third tier cities may seem small and unknown, but they are still larger than almost all of Europe’s capital cities. Berlin is Germany’s largest and the EU’s second largest city with 3.5 million inhabitants. Yet compared to some of China’s cities, it is just a blip on the map! Even China’s third tier cities exceed Berlin’s population on average by more than 1.5 million people.
In terms of GDP, there is still a vast growth potential for second and third tier cities in China with populations vastly exceeding Berlin’s. The German city’s GDP is generally far ahead, though no where near its Chinese first tier counterparts. In terms of second tier cities, only a few, namely Suzhou and Chongqing, rival the GDP of Berlin.
This figure is a clear indication of the opportunities in China’s second and third tier cities. Although growth in the first tier cities has been cooling down in the last few years, growth rates are still in the double-digits in almost all 2nd and 3rd tier cities. With a growth rate of just over 1%, Berlin is lagging behind severely.
GDP per Capita
Berlin, being a fully evolved Western city, far outranks all Chinese cities in the GDP per capita category. China’s third tier cities have an average GDP per capita that is at not even one fifth of Berlin’s. Shenzhen’s GDP per capita is still not even half as high as Berlin’s even though it is the leader of China’s cities.
Number of German Companies
The average number of German companies operating in these cities is a good indication of the level of internationalization and foreign business activity. Of course first tier cities are and will remain the entry point to the Chinese market. With an increase in the quality of infrastructure, personnel and generally established business networks, third tier cities hold great promise for foreign companies wanting to expand in the region.
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