The locus of growth is changing. Beijing, Shanghai, Shenzhen and other Tier 1 cities continue to grow but at slower rates. The average growth in consumer spending over the top-five Tier 1 cities is 3.5%. Hangzhou has the highest growth at 5.7%, while Beijing has the lowest at 0.4%.
Why do small companies or organisations feel they have to start their China journey in Shanghai or Shenzhen? These are the most competitive marketplaces in the world. Unless you have a significant size and an existing global footprint, these megacities are not a suitable place to begin your business expansion in China.
In my work with a small regional government, I struggled to get them to understand that their insignificant size and profile were not an advantage when establishing political relationships with China. They spent thousands of dollars before they figured out that success came from working with smaller regions in China and cities in areas that had more in common with them than the megacities on the coast.
