The Chinese city tier system (中国城市等级制 zhōng guó chéng shì děng jí zhì) is a hierarchical classification of 613 Chinese cities. The tiers are used by analysts to study consumer behaviour, income level, politics, and local trends to help fine-tune strategies and policies to local conditions.
The tiers are determined by several factors, including economic development (GDP), infrastructure, amenities, and population size. However, the tier system is not static, a city may move up or down in the rankings as its development changes over time.
The system consists of four tiers, with “1” being the highest and “3” the lowest.
Consist of Beijing, Shanghai, Guangzhou, and Shenzhen.
These are the 4 most developed cities in economics and infrastructures which have political and cultural influence over the country, with a large population with high levels of income. These factors combined thus attract greater foreign investment as well.
However, these cities are also much more crowded and expensive than others and consumers are often more price-sensitive. Rent and labour costs can be very high.
Consists of 15 cities; Chengdu, Hangzhou, Chongqing, Wuhan, Xi’an, Suzhou, Tianjin, Nanjing, Changsha, Zhengzhou, Dongguan, Qingdao, Shenyang, Hefei, and Foshan.
They are big cities with high development in economics and infrastructures after the 4 First-tier cities, also attractive investment destinations.
In recent years, the Chinese economy has been shifting away from a reliance on first-tier cities and towards the development of New first-tier and Tier 2 cities. Thus, these cities have more room for growth and investment as the Chinese government has made it a priority to develop these areas as part of its plan to promote balanced regional development.
Consists of 30 cities and most are major counties or on the east coast; Xiamen, Fuzhou, Wuxi, Kunming, Harbin, Jinan, Changchun, Wenzhou, Shijiazhuang etc.
The cities are not as booming as the new First-tier cities, but have greater potential for future growth and investment due to factors mentioned earlier.
Consist of the remaining 63-71 cities
These cities are as prosperous as the district level, and are considered economically developed cities.
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