If you are considering entering the Chinese market, one of the first questions is where to start. In the yearly report published by PwC called “Chinese Cities of Opportunity 2025“, 60 cities across China are evaluated based on a broad set of indicators including economic strength, infrastructure, innovation, quality of life, and future development potential. The report offers a useful framework for identifying cities with strong business potential.
Chinese cities have gone through a remarkable economic transformation over the past four decades, thanks to a fast and steady process of urbanization. By 2024, China had 27 cities with a GDP of more than one trillion yuan each. These cities today are well-planned, urban, modern, and smart like any other city around the world, and sometimes even more.
The report is a useful source of information for companies looking to evaluate where to build their China business operation, and what type of opportunities different cities may offer from a broader strategic perspective.
Table of Contents
Here is a concise review of five leading Chinese cities for business, based on the following criteria:
- Intellectual capital – The number of academic institutes in the city, the number of studies published, and the technology developed by those institutes.
- Technology and innovation – The number of patents registered in the city, the number of technology companies operating there, the adoption of alternative-energy vehicles, and the pace of implementing new technologies in the city itself.
- Urban resilience –Medical resources, the availability of medical insurance and pension coverage, personal safety, and the city’s overall ability to respond to emergencies.
- Transportation and urban planning – Road planning, public transportation routes, and the number of public vehicles.
- Sustainable development – the amount of water resources, the ratio between nature and urban areas, and air pollution.
- Culture and quality of life – the average income, consumption rate, unemployment rate, and the number of cultural institutions running in the city.
- Economic clout – the number of Well-known enterprises working in the city, average regional GDP, and foreign direct investments.
- Cost of living – average wage, public transportation cost, average rent cost, cost of employees.
- Ease of doing business –Entrepreneurial activity, reliance on foreign trade, logistics efficiency, and the overall business environment.
Here is a concise review of five leading Chinese cities for companies evaluating opportunities in the Chinese market, based on the following criteria:
In fifth place -Hangzhou
Province – Zhejiang
Advantages for businesses – Fast and innovative city-wide internet infrastructure
City’s best attribute – Urban planning, public transport, “smart city”
City’s weakness – Cost of living
Hangzhou is the capital of Zhejiang, and although the city is more than 2,200 years old, today it is widely associated with China’s digital economy and advanced urban technology. In recent years, the municipality has continued to invest heavily in smart-city systems, digital infrastructure, and connected public services, helping strengthen the city’s position in urban planning, transportation, and innovation. The convenience and innovation, together with being relatively close to Shanghai (175 KM) and its location on the Yangtze River Delta are the main factors for the high cost of living in the city.
According to the CCO framework, Hangzhou performs especially well in ease of doing business, while its cost of living remains one of the city’s main constraints. Even so, the city’s long-term development strategy has helped put Hangzhou on the map for international companies considering a local presence in China.
In fourth place – Guangzhou
Province – Guangdong
Advantages for businesses – The largest port in southern China, making it especially easy for shipping in and out from the Philippines, Malaysia, Singapore, Vietnam, and Thailand.
City’s best attribute – Urban resilience
City’s weakness – Cost of living
Guangzhou is the capital of Guangdong province and one of China’s most important commercial cities. The city’s location, transportation infrastructure, and strong trade foundations have made it a major hub for doing business in China. Guangzhou is also known as a relatively high-cost city, but its commercial depth, industrial diversity, and connectivity continue to make it attractive for many types of business activity. But this should not deter companies from considering Guangzhou, as the city ranks strongly across multiple business criteria and remains one of China’s most important commercial centers. In a recent post about the 5 most important ports for logistics in China, we also highlighted the city’s importance for both domestic and international business activity.
Guangzhou also stands out for its urban resilience. The city is well equipped with medical resources, while average wages and pension levels are among the stronger in China. Unlike cities that are heavily concentrated around one business strength, Guangzhou offers broader business diversity, combining development, trade, and manufacturing within one mature commercial environment. This broader profile also helps explain why the city continues to be seen as one of the 5 most important ports for logistics in China.
In third place – Shenzhen
Province – Guangdong
Advantages for businesses – The local government offers incentives for tech companies willing to open R&D centers in the city.
City’s best attribute – Technology and innovation
City’s weakness – Intellectual capital
Shenzhen is known as the Chinese Silicon Valley, and it comes as no surprise that it ranks first in technology and innovation in the CCO framework. In the 1980s, Shenzhen was designated as China’s first Special Economic Zone, and the large concentration of technology companies operating in the city has helped position it as a leading high-tech hub. Today, many international companies maintain advanced R&D centers in Shenzhen.
Shenzhen’s main weakness in the report is its relative lack of academic intellectual capital. The city has many universities, but compared with some other leading cities, it is less dominant in academic research infrastructure. Even so, this does not weaken Shenzhen’s standing as one of China’s most important centers for applied innovation and commercial technology development.
This does not diminish Shenzhen’s position. According to PwC’s broader city-opportunity framework, Shenzhen continues to stand out as one of China’s strongest cities for future-oriented development. With high-tech and advanced manufacturing still treated as strategic priorities in China, Shenzhen is likely to remain one of the country’s key growth centers for innovation-led business activity.
In second place – Shanghai
Province – Administrative level – Municipality directly under the central government
Advantages for businesses – international city culture and the world’s largest port
City’s best attribute – Culture and quality of life
City’s weakness – Cost of living
Shanghai is one of China’s most important commercial cities and one of its largest urban economies. It is a municipality directly under the central government, not a province. Across the broader CCO framework, Shanghai performs strongly in business, innovation, transportation, urban planning, and quality of life. One of its most notable strengths remains its international character and the overall depth of its business environment.
Shanghai remains one of China’s leading cultural and international cities. The city is home to cinemas, theatres, conference halls, museums, restaurants, music venues, and major international events. This cultural depth supports its broader appeal for international talent and companies, and it continues to contribute to Shanghai’s position as one of the most attractive cities in China for business and daily life.
According to the report framework, Shanghai remains near the top across a wide range of indicators, including business environment, city development, technology, planning, and innovation.
However, the cost of living in Shanghai is very high. Despite that, the average wage in Shanghai is also higher than in many other Chinese cities, so companies should distinguish between the cost of operating in the city and the cost of visiting or short-term relocation.
Shanghai remains one of China’s most active cities for business formation and market access reform. By the end of 2024, the city had nearly 2.9 million active enterprises, with 117 enterprises per 1,000 people, ranking first nationwide. This reflects a mature and highly active commercial environment for both domestic and international companies.
Shanghai also remains a major force in global logistics. In 2025, Shanghai Port handled more than 55 million TEUs, retaining its position as the world’s busiest container port. Combined with the city’s dense business ecosystem, this continues to make Shanghai a highly strategic location for companies involved in trade, supply chain management, and logistics in China.
And in the first place – Beijing
Province – Administrative level – Municipality directly under the central government
Advantages for businesses – Best location for companies specializing in B2G (Business to Government).
City’s best attribute – Intellectual capital
City’s weakness – Sustainable development
Topping our list and the CCO framework is Beijing. According to PwC, the capital of China remains one of the country’s most influential cities economically and institutionally, with strong long-term development potential. The city performs well across most categories, but one strength stands out more than the others: intellectual capital.
When looking at these criteria Beijing leads in all the subjects, including the residents’ academic background, the number of academic institutes and their research output, and the number of academic R&D centers that ranked the highest in all of China. Moreover, almost all the ministries, government buildings, and offices are based in Beijing, making the city a place where influential decisions and policies are formed and executed.
Although Beijing performs strongly in the CCO framework, one area where it remains under pressure is sustainable development. As China’s political and institutional center, Beijing has made visible progress in environmental management over recent years, but air quality and long-term sustainability still remain more challenging here than in some other leading cities.
Thanks to ongoing environmental policies and long-term planning, the situation has improved, but sustainability remains one of Beijing’s weaker dimensions relative to its overall economic and institutional strength. Even so, Beijing continues to hold a central position in China’s economy and remains one of the country’s leading cities of opportunity for business.
We hope this overview has been useful and has helped highlight several cities that continue to play an important role in business, trade, and supply chain activity in China. PTL Group provides business support in China through offices and warehouses in Beijing and Guangzhou, with our headquarters in Shanghai. If you are considering starting a business in China, we would be happy to support you at each stage and help you build the right operational structure for your activity in the market.
