The East and the Rest: The Remarkable Rise of Chinese Cities

• Since A.T. Kearney began tracking the performance of the world’s top cities a decade ago, China’s urban centers have rapidly become relatively more competitive on a global scale. The number of Chinese cities included in the Global Cities Index has spiked from 7 in 2008 to 27 this year.
• The scores of the original seven Chinese cities included in the first Global Cities Index have grown at a higher annual rate—1.8 percent—than every region except Africa. In comparison, the scores of North American cities increased by 0.6 percent annually over the past decade

What is China doing right, and what can we learn?

1. This evolution of China’s cities reflects intentional efforts by national, regional, and local entities to improve the country’s competitiveness.
2. The initiatives have focused on business, governmental, and cultural activities, providing improvements that boost the quality of life for residents, increase the ease of doing business, and attract more investment and attention from global companies.
3. The improvement of Chinese cities can be attributed to a myriad of factors encompassing business, technology, human capital, and more.
4. One key component is the increasing ability of Chinese mega-cities to attract multinational companies. For example, Google has offices in Shanghai and Beijing and plans to open one in Shenzhen, which is currently home to Chinese tech giant Tencent. The arrival of these corporations has been beneficial in attracting foreign direct investment into the country as well. In fact, China has remained among the top five countries for FDI intentions for 20 years according to the A.T. Kearney FDI Confidence Index.
5. The Chinese government’s exceptionally restrictive Internet regulations primarily impact global players and have resulted in China developing its own tech industry with a home court advantage. As a result, the aforementioned Tencent, as well as e-commerce juggernaut Alibaba and search engine Baidu, have been able to flourish.
6. The country has bolstered its workforce with efforts aimed at educating its own citizens and attracting outside talent.
7. Public and private funds are flowing into the start-up ecosystems in these top-tier cities, making entrepreneurship a new and viable career path while teeing up the next generation of Chinese business success stories.

Takeaway for other cities

• The takeaway for other cities is that these changes aren’t made in a vacuum. Instead, the evolution of these places provides a playbook for how business, government, and social policy can work together at a national, regional, and local level to accelerate growth.

So how can other global cities or countries emulate these Chinese municipalities, perhaps with fewer financial or governmental resources?

1. The first step is to empower municipalities. This seems to be key for spurring multiple efforts. The Chinese cities noted in our report have all benefited from local economic development efforts that were supported and complemented by regional and national initiatives. In an example from Shenzhen, the mayor initiated a project to transition all the city’s buses to electric. The federal government then offered the city a subsidy that made purchasing the new buses possible.
2. The second key lesson is to take a holistic approach. The Chinese cities that are primed to thrive have addressed numerous aspects that make living and working there appealing, from protecting outdoor spaces to supporting education pathways that provide for promising careers.
3. A comprehensive strategy to urban development is paying off for China. By focusing on the multiple aspects that make cities great, the country is creating urban hubs that will continue to draw business, talent, and culture from inside—and outside—the country.