Summary of China’s Internet Companies Move Away from Beijing, Shanghai and Guangzhou

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China’s Internet Companies Move Away from Beijing, Shanghai and Guangzhou summary
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Beijing, Shanghai and Guangzhou have been China’s business hubs for decades. But Internet enterprises and the IT companies are moving to second-tier cities such as Chengdu and Wuhan. Often, companies and their host cities seem to hit it off effortlessly, with a reciprocal exchange of benefits. Some companies bleed their host cities and move on when they reduce the incentives. In this article from All Weather TMT, a Chinese website on tech business news, reporter Yao Xinlu explores corporate migrations, and shares her tips on how cities should promote themselves to companies.

In this summary, you will learn

  • How Chinese Internet companies choose their locations,

  • Why these companies are relocating their businesses and

  • What effects the moves have on local economies.

 

About the Author

Yao Xinlu is a writer for All Weather TMT, a website that provides tech business information to help investors understand technology.

 

Summary

Chinese Internet companies are leaving China’s first-tier cities, namely Beijing, Shanghai and Guangzhou, to settle in second-tier cities such as Chengdu, Wuhan and Hangzhou – and even third-tier cities like Xiamen and Haikou. Other companies, including Tencent, Alibaba, MI, Smartisan and Luckin Coffee, remain in the first-tier cities but establish second headquarters in lower-tier ones.

The first wave of this trend started in 2007, when Tencent opened a branch in the Chengdu Tianfu Software Park. In 2009, Alibaba chose Chengdu for its research center which, at the time, was the largest investment project in Sichuan Province. In October 2017, Lei Jun, CEO of Xiaomi Technologies, announced his decision to establish the company’s second headquarters in Wuhan, with a total investment of ¥23 billion ($3.4 billion). To encourage its employees to move, too, the company...


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