While Beijing and Shanghai are the most accessible, both in terms of international travel and accommodations for westerners, in some sense, they are yesterday’s news.  The real story now is in the aggressive “second tier” cities.  Many of these regions have populations in the 10M range, outstanding universities and eager local governments.  PCWorld recently presented a survey of some of the best.

Of course, I can’t let any post on this topic pass without plugging Chengdu (normally I wouldn’t post such a long excerpt, but I’m making an exception for Chengdu):

“Chengdu — This city in southwestern China’s Sichuan province was shaken badly but ultimately received minimal damage from the May 12 earthquake that killed 70,000 people in nearby Wenchuan. Although some operations were knocked offline by the quake, business in this pleasant and livable city have returned to normal.

Despite its inland location, Chengdu is one of southwest China’s largest cities and infrastructure hubs. It boasts international air connections throughout Asia and domestic and international train routes, and its Hi-Tech Zone is home to 28 Fortune 500 companies.

Intel is one of them. The company responded to the Chinese government’s “Go West” strategy, promulgated to attract investment to poorer, less-developed inland provinces, not just to coastal areas that have traditional received the most attention from overseas businesses. An Intel spokesperson said that the city met all its criteria: availability, pricing and reliability of utilities; availability of the right kind of talent, especially high-end technical talent; and a government that’s interested in working with Intel and offers the right incentives. Since the announcement of its testing and assembly plant in 2003, Intel has invested US$525 million [m] there and employs 2000 people, the company said.”

As we’ve suggested before, make sure that your vendor has a robust strategy to tap the resources in the second tier cities.

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