Chen Nan downsized her location two years ago. Some might call it foresight, but she sees her move out of Shanghai as something that just made financial sense for her and her family.
She took her master’s degree from East China Normal University and moved from the mainland’s financial hub, population 21 million, to Shantou , a coastal city of nearly five million in southern Guangdong that is her husband’s hometown. Now she says her life is easier and happier.
Today, more and more Chinese young educated and experienced professionals are starting to see what Chen saw. They are fleeing the huge metropolises, with their impossible housing prices and high cost of living, to start new lives in the second tier.
'You can cite at least 10 reasons to leave or, on the other hand, 10 reasons to stay in the big cities. But for me, the advantages have obviously outweighed the disadvantages after my two-year stay here,' said Chen, 33, who cites the old Chinese saying: 'Taking a step back, one will have a boundless sea and open sky.'
A higher social status, fresher air and food, less work competition, less severe traffic jams, a much lower living cost, and more affordable housing in particular are the advantages Chen sees.
And her experiences appear to confirm a number of surveys – one by insurance company Manulife-Sinochem last month – that suggest young middle-class families in second-tier cities are leading happier lives than their peers in Beijing, Shanghai, Guangzhou and Shenzhen.
The Manulife-Sinochem survey, conducted over two months last year, polled more than 70,000 middle-class people (annual incomes above 50,000 yuan, or HK$56,500) aged 20 to 40 in 35 cities. It also showed that the much-publicised pinch of high housing prices, fierce office competition, traffic congestion and the high cost of children’s education were the primary causes of the low happiness index in those leading metropolises.
And even though the middle class has generally enjoyed better education and higher incomes, the effects of life in the first-tier cities that bother them the most are the economic pressures and minimal time to spend with family.
Chen said cheaper housing in Shantou was the top reason for her family’s decision to move from Shanghai, but it was not the only one. 'Overall we have a better quality of life here,' she said.
Housing prices in Shantou average 3,000 to 5,000 yuan per square metre for a 'luxury' apartment with such facilities as a swimming pool and basketball and tennis courts. In Shanghai, a comparable home would cost about 10 times that.
Chen now lives in a four-bedroom, 150-square-metre apartment. In Shanghai her family of four – she, her husband, their baby and his mother – lived in a rented one-bedroom apartment. Chen’s mother-in-law and the baby slept in the living room.
Common convention holds that the big city, with its higher cost of living, also offers more job opportunities and better pay; and the smaller city, with its lower costs, offers fewer jobs and lower salaries. Chen disagreed. She earned 5,000 yuan a month as an office clerk in Shanghai and makes the same in Shantou as an office manager – a promotion she earned because of her experience in Shanghai and the talent scarcity in Shantou.
Recent surveys and research appeared to support her argument. Surveys of China’s job markets conducted by Manpower Inc, the world’s leading employment service provider, suggested that second-tier cities are becoming more and more attractive to young professionals as economic growth has started to shift to central and western areas.
Manpower’s survey, based on interviews with 1,070 people in July, indicated that nearly 30 per cent of respondents relocated for work in the past. Of that 30 per cent, 32 per cent moved between first-tier cities, and 21 per cent relocated from first-tier to emerging cities.
More than 47 per cent of the respondents said they would consider relocating for work in one or two years if there are suitable opportunities. Within that group, 36 per cent said they would be willing to relocate from first-tier cities to second-tier cities such as Hangzhou, Zhejiang ; Chengdu, Sichuan ; and Dalian, Liaoning.
Those opportunities are starting to show up, as companies hit by the global financial crisis are moving inland to stem sliding earnings.
'Due to rising operational costs and fierce competition in the first-tier cities, many multinationals are now moving to emerging cities, stimulating talent demand in those areas and promoting talent mobility,' said Danny Yuanchara, managing director of Manpower China.
Intel, the world’s biggest semiconductor maker, announced last year that it would close a Shanghai plant and consolidate chip assembly and testing operations in Chengdu. Foxconn International has set up operations in the provinces of Hubei and Shaanxi, and Motorola established a research and development laboratory in Chengdu.
Alcatel-Lucent, Ericsson, Nokia and Microsoft also have set up research and development centres around Chengdu.
'Faster economic growth in second-tier cities as a result of industry relocation and the inflow of foreign and domestic capital has boosted job opportunities there,' said Zhuang Jian, senior economist with Asian Development Bank’s China Resident Mission. Smaller cities and inland regions were becoming new engines of growth in recent years, he added, and the trend would probably continue with the aid of the central government’s new developmental strategy.
And although the specific numbers in last year’s official provincial data are considered inflated for political purposes, the trend is clear: 14 provinces reported over 15 per cent growth in their gross domestic products, most of the others showed 10 to 12 per cent last year, but the growth of Beijing (10.1), Shanghai (8.2) and Guangdong (9.5) was among the slowest.
'The growth momentum continued in 2009 and will continue in the future to shift to central, western and northern parts of the country,' said Liu Yong , an economist with the State Council’s Development and Research Centre.
In 2008, the economies of the second-tier cities including Dalian and Shenyang in Liaoning, Hangzhou, Tianjin and Sanya , Hainan , posted growth above 16 per cent, stronger than that of the first-tier cities, which ranged from 8 to 12 per cent.
And those with experience in the first-tier cities who are willing to move, as Chen did, can expect good professional results. “They can consider career opportunities in the emerging cities to achieve breakthroughs and enjoy better career development,” said Yuanchara of Manpower.
Ni Pengfei , an economist at the Chinese Academy of Social Sciences and leader of the team that compiled the 'Blue Book of Urban Competitiveness' last year, sees the battlelines already drawn.
'All this indicates that the central and western provinces in China are developing their economic strengths,' he said.
The central government launched its ambitious plan to develop the west in 2000. A few years later it vowed to rejuvenate the central and northeastern regions.
Chen Nan, sitting in her 150-square-metre apartment in Shantou, saw it coming two years ago.
This is an edited version of an article which was publised in the SCMP on April 6.