Beijing or Shanghai have long been the top picks for those looking to startup in China, bolstered by the communities of existing tech companies that call them home. However as housing prices soar and big-city pitfalls including pollution make starting a business increasingly complex in these centers, second tier cities begin to look more attractive.

As a startup founder, saving cost is a big issue, and that’s where second tier cities excel. Multiple second-tier cities are now forming startup hubs in China, including Alibaba HQ Hangzhou, and the central city of Chengdu.

The cost of living is much lower in second-tier cities, as well as lower cost talent, including engineers. All of China’s second-tier cities are still large enough to hold a university, often multiple universities, meaning that human capital is quite often abundant. It is reported that 67% of engineers in first-tier cities earn 10,000 RMB ($1,570 USD) in monthly salary, when the engineer in second-tier city can cost 2000 to 5000 RMB. 

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Eva Yoo

Eva Yoo is Shanghai-based tech writer. Reach her at evayoo@technode.com