Best Cities to Start Your Business in China

China is the well-known largest developing country in the world. Many businessmen want to start their business in China as fast as possible and share with the success of the country.

However, China is too big for even a Fortune 500 company to start running its operations in all major Chinese cities at the same time. You better to start your business in a few Chinese cities first, and then further expand after you achieve a certain degree of success and gain some local reputations. For such a consideration, what are the few best cities that you should start your business there?

The answer can be found from a survey which studied the competitiveness of around 300 Chinese cities in terms of 277 parameters including economy, industrial productivity, infrastructure, social system, culture, technological advancement, education, business and trade, fiscal and finance, environment and resources, and many others. The survey was conducted annually by the China Institute of City Competitiveness, an institution based in Hong Kong.

The results of the latest 2011 survey, the 10th Chinese city competitiveness survey ever conducted by the institute, reported that the Hong Kong continues to be the overall champion for the 5th successive year, immediately followed by Shanghai, Beijing, Shenzhen and Guangzhou (see Table 1). Comparing with the ranking in the past annual survey, the top 4 positions in city competitiveness did not change, the rankings of Hangzhou, Wuhan and Suzhou rose, while the rankings of Macau and Taipei fell.

Hong Kong takes the lead in city competitiveness in terms of parameters such as efficiency, talent, culture, productivity, international friendliness, social and business environment over the rest mainland cities. Although the general competitiveness of Hong Kong is still stronger than the other mainland cities, it can never be denied that the competitiveness of Shanghai and Beijing has been rising quickly in recent years, thus narrowing their gap with Hong Kong. In fact, the Gross Domestic Product (GDP) of Shanghai already reached RMB 1.69 trillion in 2010 and surpassed Hong Kong's RMB 1.43 trillion by the same year. During the 12th 5-ear Plan period, GDP of Shenzhen, Beijing, and Guangzhou will certainly surpass Hong Kong as well, as most economists expect this will happen in two years time by 2013. Economists also expect that by GDP per capita, a more critical data to represent city competitiveness, Shanghai will reach that of Hong Kong 11 years later by 2023. Unless Hong Kong can further upgrade itself quickly through the development of its high-end, knowledge-based, and value-added service industry, some mainland cities (including Shanghai, Beijing, Shenzhen and Guangzhou etc) are ready to overtake Hong Kong soon as the most competitive Chinese city in the next 10 years.

Traditionally it was just Shanghai could be a real competitor of Hong Kong. It is no longer the case now. According to the survey, Tianjin, Chongqing and Shenzhen are the top 3 cities in term of competitiveness of urban growth, an important parameter that tells you the sustainability level of the city growth.

Chongqing, Tianjin and Beijing are the top 3 cities in term of city safety, which measures social security, ecological security, economic security, information security etc. The ranking of Shenzhen climbs up rapidly to 4th in this survey, although it was not ranked in the top 30 safest cities in the past annual survey. Hong Kong is surprisingly knocked out of the top 30, for the first time ever in the city safety category.

Ranking	OVERALL Competitiveness	Competitiveness By Urban Growth	Competitiveness By Safety	Competitiveness By International-Friendly
1	Hong Kong	Tianjin	Chongqing	Hong Kong
2	Shanghai	Chongqing	Tianjin	Shanghai
3	Beijing	Shenzhen	Beijing	Beijing
4	Shenzhen	Suzhou	Shenzhen	Taipei
5	Guangzhou	Shanghai	Macau	Guangzhou
6	Suzhou	Beijing	Yantai	Shenzhen
7	Tianjin	Dalian	Taipei	Xian
8	Hangzhou	Qingdao	Hangzhou	Hangzhou
9	Taipei	Hong Kong	Qingdao	Macau
10	Chongqing	Hangzhou	Xiamen	Dalian
11	Nanjing	Guangzhou	Erdos	Tianjin
12	Wuhan	Jinan	Weihai	Qingdao
13	Macau	Shenyang	Shenyang	Suzhou
14	Qingdao	Nanjing	Yuxi	Nanjing
15	Dalian	Erdos	Wuxi	Xiamen
16	Ningbo	Ningbo	Liuzhou	Nanning
17	Dongguan	Macau	Jinhua	Chongqing
18	Chengdu	Hefei	Zhuhai	Kunming
19	Shenyang	Xiamen	Xuzhou	Harbin
20	Xiamen	Wuhan	Zhongshan	Chengdu
21	Wuxi	Chengdu	Zhoushan	Urumqi
22	Jinan	Wuxi	Xinyu	Fuzhou
23	Kunming	Yantai	Siping	Zhengzhou
24	Foshan	Kunming	Harbin	Changchun
25	Yantai	Changsha	Nanning	Wuhan
26	Xian	Taipei	Changsha	Hohhot
27	Zhengzhou	Changchun	Karamay	Shijiazhuang
28	New North	Foshan	Hefei	Guilin
29	Changsha	Xian	Changshu	Changsha
30	Harbin	Zhengzhou	Ganzhou	Shenyang

Table 1: Chinese Cities Competitiveness
Although the survey suggested that the mainland cities like Shanghai, Beijing, Shenzhen and Guangzhou have great chances to develop as an international metropolis, we believe Hong Kong can still keep its current status as a key Asian financial centre for the next 10 years, provided that capital inflows to the mainland China from other channels are still restricted.

For the city competitiveness in the entire world, still New York is the winner, followed by London, Paris, Tokyo and Chicago (see Table 2). Hong Kong, Shanghai, Beijing and Taipei rank 7th, 16th, 22th and 28th respectively.

Ranking	OVERALL Competitiveness	Country/Region
1	New York	United States
2	London	United Kingdom
3	Paris	France
4	Tokyo	Japan
5	Chicago	United States
6	Singapore	Singapore
7	Hong Kong	China
8	Berlin	Germany
9	Los Angeles	United States
10	Seoul	South Korea
11	Boston	United States
12	Geneva	Switzerland
13	Dublin	Ireland
14	Yokohama	Japan
15	Frankfurt	Germany
16	Shanghai	China
17	Zurich	Switzerland
18	Brussels	Belgium
19	Amsterdam	Netherlands
20	San Francisco	United States
21	Zurich	Switzerland
22	Beijing	China
23	Toronto	Canada
24	Washington DC	United States
25	Stockholm	Sweden
26	Seattle	United States
27	Osaka	Japan
28	Taipei	Taiwan
29	Sydney	Australia
30	Milan	Italy

Table 2: Global Cities Competitiveness
In all, if your business is about finance, Hong Kong should still be your first choice to start your business in China. For more lengthy comparison between Hong Kong and Shanghai, please read: Shanghai vs Hong Kong as Major Chinese Financial Centre. Shenzhen and Guangzhou should also be considered as your choices to establish back offices to support your start-up financial business in Hong Kong and, for the next stage to enter the mainland markets when the time is ripe.

If your business is not about finance, Shanghai should be your ideal choice for your initial trial because the overall operation cost is lower than that in Hong Kong. In any case, if your business requires frequent bureaucratic approval, you must consider to set up your office in Beijing, the political capital of China. For more detailed reasons, please read: Shanghai Strategic Plan For the Next 10 Years.