Beijing Overtakes Washington in A.T. Kearney’s 2019 Global Cities Report

09/08/2019

A.T. Kearney’s 2019 Global Cities Index and Outlook reveals the world’s top-performing cities and those with the most potential. Among the 130 cities listed, China boasts as many as 27 cities, overtaking names like Washington and San Francisco

 

In recent years, the importance of Chinese cities is rising. Not only Beijing or Shanghai, even less known cities are now gaining the attention they deserve. Within a decade, the People’s Republic not only rose through the ranks of favorite destinations for intercontinental tourists but it also climbed the ranks of the world’s most powerful cities.

According to analysts from A.T. Kearney in their last Global Cities Index, Hong Kong, Beijing, and Shanghai are now overtaking names like Los Angeles, Berlin, and San Francisco respectively. This unveils the overall trend that sees the Dragon gaining more and more space in the global arena, a trend that is reflected in many fields.

Published in May, The Global Cities Index and Outlook reveals the world’s top-performing cities and those with the most potential. Analyzing different factors such as the human capital, municipal policies, and the commitment to building a technology pathway into the future, the report highlights which cities are the world’s leaders and which are the frontrunners for the future.

 

A.T. Kearney's 2019 Global Cities Report - hong kong - cifnews

© Unsplash. According to the 2019 Global Cities Index, Hong Kong ranks 5th among the world’s top-performing cities, just above Singapore and Los Angeles.

 

When A.T. Kearney published the Global Cities report for the first time in 2008, the study ranked 60 cities, seven of which were key cities from China. Now, these Chinese cities are quickly moving up the ladder, leaving the rest of the world open-mouthed. In fact, since the first edition of the report, the average Index scores of the Chinese cities have grown three times faster than that of the North American cities. For what concerns the Outlook, instead, the same cities improved 3.4 times faster than European ones.

This huge increase is largely due to the cities’ business activity even though the strides they made in human capital and information exchange have significantly accelerated their boost. An example is Suzhou, in Jiangsu province, which has leapfrogged 20 rankings thanks to a growing population of foreign students.

Nevertheless, for what concerns cities’ potential, one of the main important factors that drove the Dragon to climb the Outlook ranks is the number of improvements in governance. Indeed, last year, China launched a record number of reforms to improve the business climate and this makes it one of the world’s top 50 economies for ease of doing business, according to the World Bank.

Taking a deeper look at the report, New York, London, and Paris maintain their decade-long dominance as the top three cities in the Global Cities Index. However, the metropolis of the Greater Bay Area, Hong Kong, ranks 5th in the Index while the Chinese capital beats the capital of the United States.

 

With Beijing ranking 9th ahead of Washington in 10th place, Chinese cities are showing signs to be both able and motivated to climb the ranks and overtake US capitals.

 

However, according to the report’s analysts, in order to keep rising to compete with Western power centers, China needs to make its cities more open to diversity and more inclusive.

Mike Halens and Jefferson Wang – two report authors – wrote that “Shanghai’s pride week provides an ideal example, ensuring the self-expression of the city’s LGBTQ residents and improving Shanghai’s reputation on the global stage as an inclusive city.” Therefore, by allowing self-expression, Shanghai made it among the top 25 cities of the Index, ahead of Boston and San Francisco.

But the Middle Kingdom is already in the position to be more inclusive and open to diversity. Chinese cities are becoming more international by the day. Chinese people are traveling the world bringing home new trends and knowledge. Moreover, many Chinese cities like Beijing or Shenzhen are attracting foreign workers with their skills and their cultures as well.

Initiative at both the provincial and governmental level to build a higher education, to create room for opportunities, and to support the startup ecosystem help attract foreign talents and keep the local ones. For example, Chengdu, in Sichuan province, hosts a large community of European and Canadian-born Chinese, thus ranking 89th in the report’s list.

In Hong Kong and Macao, Western and Chinese cultures even live together, owing to their British and Portuguese colonial heritage. Therefore, examples of openness to diversity are widespread in the country.

A.T. Kearney's 2019 Global Cities Report - china - cifnews

© A.T. Kearney’s 2019 Global Cities Report. China is rapidly gaining ground on the world’s top cities.

 

The truth is that over the past 40 years, China has made outstanding achievements in the growth and development of its cities. Small towns have become large and modern metropolises while the urbanization rate rose from 18% in 1978 to 60% in 2018. In the meantime, the country’s urban population grew from 170 million to 830 million.

But the qualitative evolution of urbanization rate is due to gradual growth achieved through phases. From Deng Xiaoping’s reforms until 2010, the country’s economic growth developed in conjunction with the transfer of the rural labor force to urban areas, resulting in rapid expansion and fast cities’ growth.

Then, since 2011, rapid urbanization began to slow and Chinese cities focused on quality-oriented development. “This became the key contributor to the fast growth of Chinese cities climbing up the ranks of A.T. Kearney’s Global Cities Index,” the report’s authors wrote.

 

If it wants to stay competitive, the PRC “will require a transition toward a citizen-centric development strategy that prioritizes healthy populations and happy people.”

 

According to A.T. Kearney’s study, the next urbanization and development phase will focus on citizens. It means building a sustainable population structure aimed at improving the well-being of citizens.

In 2018, the report recorded the rise of Chinese cities in both the Index and the Outlook. Since the first edition, dozens of the Dragon’s cities were added to the rankings and their performance also overshadowed those from other countries. “The performance of Chinese cities in the Global Cities Index and Outlook cements their status as rising stars among the world’s best urban places,” says the report. However, if the Middle Kingdom aims to compete again, in addition to investing in business, infrastructure, and growth, it now needs to invest in its people.

Nevertheless, the goal of the A.T. Kearney’s annual Index is not only to highlight the cities’ value but it also provides useful information for corporations that are looking for areas particularly relevant for business growth and attractive for foreign employees.

 

A.T. Kearney's 2019 Global Cities Report - chinese people - cifnews

© Pexels. In order to stay competitive, the PRC now needs to invest in its people, shifting to a citizen-centric development strategy.

 

Among the Global Cities Index’s 130 top-performing cities, the People’s Republic boasts as many as 27 cities this year, 11 of which made it to the top 100 such as Hangzhou and Suzhou, which made the top 100 list for the first time.

But Chinese cities also lead another important listing, the JLL’s City Momentum Index 2019, which reveals where in the world to find the highest levels of dynamism. Among 131 markets across the globe, the Dragon is home to 9 of the top 20 cities today, enabling the Asia Pacific to take a total of 19 seats in all, therefore, highlighting the continuing shift of fast urban growth from the West to the East.

“Chinese cities are evolving of truly global scale, where momentum is more dependent on levels of innovation, entrepreneurship, and liveability. They are home to a new breed of energetic tech-savvy firms that are extending their global footprints, facilitated by the Belt and Road Initiative,” says Jeremy Kelly, Director of Global Research at JLL.

In recent years, Chinese cities and citizens are experiencing massive changes in both urban development and liveability. The A.T. Kearney’s report reveals not only the country’s strategy to compete on the global stage but it also unveils the one last step the Celestial Empire might take to definitively make it to the top 3, thus overtaking Western major cities.

Will China focus on welcoming and valuing the diversities? Surely the citizen-centric shift is already well under way.

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