China’s young IT professionals are opting for careers in the country’s tier-2 cities, which still qualify as huge on a global scale. What’s the impetus behind this trend?

For decades, most Chinese college graduates wanted to begin their  career in Beijing, Shanghai or Guangzhou after their studies. It is in these so-called tier-1 cities where the Chinese have traditionally sought and made their fortunes. However, newer generations raised under the one-child policy are increasingly asking themselves whether these metropolitan cities are still the best choice for their professional and personal lives.

In June, zhaopin.com, one of China’s human resources service companies,  published the“2016 Report on the Employability of College Graduates.” The report  revealed that just 29 percent of college grads want to work in tier 1 cities, down from 50 percent in 2013. Conversely, about 58 percent of graduates reported  a preference for tier-2 cities.

Young Professionals Begin Rethinking Quality of Life

China’s ‘remote’ cities have also become more and more attractive for technology companies, as the competition for talent in major cities has driven wages  way up. “The talent situation in Beijing or Shanghai is still difficult, whereas in Xi’an or Chengdu it is a bit easier for an IT company to find highly skilled engineers,” according to Clas Neumann, Head of Global SAP Labs Network and Fast Growth Market Strategy Group. SAP’s software development center in Xi’an is part of a network of nearly 20 centers in 15 countries worldwide, drawing on talent from diverse national and cultural backgrounds.

The term “fleeing” Beijing, Shanghai and Guangzhou has been popular for several years among Chinese college graduates and office workers. George Qiao, a software engineer at SAP Labs Xi’an is one of those who joined the movement and ‘fled’ Beijing. Born and raised in Xinjiang Province, in the far west of China, George studied in Xi’an, the ancient Chinese capital,  for seven years before joining the Beijing headquarters of Baidu, a large Chinese web service company, known along with Alibaba and Tencent as “BAT”.

The combination of soaring housing prices, higher consumer prices), tightened residency restrictions (hukou), and pressure to marry are making it less attractive for many young people to settle down in big cities. “I used to leave work quite late, not because of heavy workload, but I just didn’t know where to go and what to do. Every morning in the jam-packed commuting subway, I began to question the life I was pursuing,” recalled George, “Then I dreamt of Xi’an.”

“Life Here is Just Colorful”

Slide25In 2014, George decided to leave the hustle and bustle of Beijing for Xi’an and received an offer from SAP, which he accepted without hesitation. Xi’an, the historical city famous among international tourists for its Terra Cotta Army among domestic citizens for its  delicious snacks, didn’t let him down. “Life here is just colorful,” George reflects. Now, George cycles to work every day but,  quality life is not the only factor that weighs on the Chinese X-generation’s decision to relocate.

“It’s the opportunity and potential for professional development I see in Labs Xi’an that allowed me to finally make up my mind. At the end of a day I would ask myself what value I added, because that’s where my happiness comes from,” said the young developer. George was fortunate to land a position as software engineer developing SAP’s flagship product SAP HANA.

George is not the only one in Labs Xi’an who “fled” Beijing. Three other colleagues also voted with their feet for Xi’an leaving tier-1 cities and many of his  friends are either moving or planning their relocation to tier-2 cities. Why have tier- 2 cities suddenly become so popular?

Xu Shaoyuan from the Development Research Center of the Chinese State Council said: “The fast growth of cities like Xi’an, Chengdu, and Dalian is the result of regional economic development, which contributed to increasing job opportunities, improving living conditions and higher salaries, and therefore more attractive to the professionals and talents, and the inflow of talents has been a catalyzer fueling constant growth of these cities.”

Growth Fuelled by Young talent and China’s Central Government

As a key city for China’s One Belt, One Road Initiative for the economic development of the country’s western provinces, Xi’an receives a stimulus package from the Chinese government to improve infrastructure and boost its economy. And software is one of Xi’an’s pillar industries which is expected to grow by 30 percent and reach RMB 300 billion by 2020. The Xi’an Software Park, ranking No. 6 China-wide, is home to over 1,600 companies including multinational corporations like IBM, Intel, Microsoft, Samsung, Siemens, and of course, SAP. But government support and preferential policies are not the only secret behind Xi’an’s rapid development. Eighty-one  colleges and universities in Xi’an provide sustainable human power for its growth.

Just across the street from SAP Labs Xi’an is Huawei’s  largest research lab., Huawei is one of SAP’s global technology partners, and the two Lab teams have established  a broad cooperation. “With support from many other teams, the partnership grows steadily,” said Richard Pledereder, SVP of PI HANA Platform Data Management and Product Management. Following Huawei’s FusionSphere 5.1 cloud project, and the company’s Infrastructure as a Service (for Ivybridge) Certification, (which is helping Huawei  open markets in Europe and Africa,) Huawei wants to extend the partnership to broader areas, such as big data, SAP HANA, and SAP ASE on Huawei servers. “The team is working in close cooperation with partners and customers, thus enabling future business opportunities for SAP in China and across the world,” says Pledereder.

Xi’an, Chengdu and Dalian, where SAP Labs has established facilities to contribute to China’s digital transformation, are now called China’s new first-tier cities, and are attracting more young people  like George to return from the old tier-1 cities.. While the next chapter in the development of China’s cities and the mobility of its young professionals is yet to be written, George Qiao has found his place and is making the most of work and life in beautiful Xi’an.