Chuangtouquan (ctquan), a startup investing network, released a report that shows second-tier Chinese cities are hosting more startups in terms of percentage. In 2011, 84% of Chinese startups were located in first-tier cities including Beijing, shanghai and Guangzhou. The rate decreased to 77% in 2012. Second-tier cities including Chengdu, Hangzhou, Nanjing and Wuhan became the new startup scenes.

It’s driven by no more than cost and talent, according to the report.

1 Costs. The average office space rental rate in the first-tier is 3.5 to 4 times of that in the second-tier and is increasing at 30% to 40%.

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Tracey Xiang

Tracey Xiang is Beijing, China-based tech writer. Reach her at traceyxiang@gmail.com