More firms venturing into China's heartland

For the longest time, mega-cities such as Beijing, Shanghai and Shenzhen were the pillars of China's red-hot economic growth.

But as business costs continue to spiral in these cities, more foreign investors including those from Singapore are venturing to second and third-tier cities in the country’s central provinces where manpower and resources are aplenty and where cost is a fraction of what it does in the coastal cities.

According to latest trade figures, 14 of China’s second-tier cities account for 8 per cent of China’s population but 53 per cent of the country’s total imports.

A spokesman from International Enterprise Singapore (IE Singapore) said that besides lower operating costs, there is a steady supply of natural resources and huge support by the central government in terms of preferential policies and funding to develop these economies. Global MNCs moving into the inland cities in view of the rising potential will also open up opportunities for Singapore-based companies to provide supporting services.