Yao Yang on Why Shanghai Wins Over Beijing

In a viral video, the renowned economist outlined deep differences in urban livability, architecture, and culture—touching a nerve that reveals broader divides.

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Aug 31, 2025

In July 2025, one of China’s most prominent economists, Yao Yang, set off a storm on Chinese social media with a candid video explaining why, after nearly 40 years in Beijing, he still prefers Shanghai.

Yao, the former Dean of the National School of Development at Peking University and now head of the Dishui Lake Advanced Finance Institute at Shanghai University of Finance and Economics (SUFE), admitted that he had never truly fallen in love with the Chinese capital despite decades of residence. The video quickly went viral, provoking heated reactions from proud Beijingers and sparking an intense online debate about urban life, governance styles, and cultural divides.

Below is Yao’s short essay in Shanghai-based The Paper based on his video. Beyond personal preferences, his reflections touch on larger themes—from the challenges of Beijing’s urban design and architectural ethos to deeper north-south cultural differences.

姚洋：为什么我决定离开北京，开始沪漂新生活

We’re about to start our "Shanghai drift". Many people have asked me, "Are you really this determined? At your age, why move to a new place?"

It’s true—most people my age are already preparing for retirement, enjoying time with their grandchildren at home. So why am I moving from Beijing to Shanghai to start a new life in a different city?

I suppose there are a few reasons.

First, I grew up in Jiangxi (a province in southern China) as a child. Even though I later attended university in Xi’an, my childhood memories keep coming back to me, and many of my eating habits remain southern. For example, if there’s cured meat on the table, I can’t resist it; if there’s rice cake, I can’t resist it either. Once, during a conference in Lingang (Shanghai's coastal financial district), the farewell dinner was set for two tables, but only one table’s worth of people showed up, so the dishes from both tables were combined. One of the dishes was crab stir-fried with rice cakes, and I ended up eating nearly all the rice cakes from both plates. So, deep down, I still consider myself a southerner, and I’ve always hoped to return to the South someday.

Another reason is that my wife also wanted to move south. She studied at Zhejiang University and spent much of her childhood in Shanghai. We’ve always loved Shanghai and often talked about when we might move here. Before, she hadn’t retired yet, so relocating wasn’t convenient. But now that she has, we’re finally free to make the move.

That simple hope - to return to the south someday - remains the most important reason of all.

Moreover, counting from 1982 when I first entered Peking University, I've lived in Beijing for over 40 years. But to be honest, throughout these four decades, I've never truly fallen in love with this city. Why is that? After some rational reflection, I've identified several reasons.

First, Beijing is simply too large to be a livable city. Truth be told, it's practically impossible to walk from one place to another in Beijing. Take our neighborhood in Haidian District (Beijing's university and tech hub in the northwest) for example - it takes 15 minutes to walk to the nearest subway station. Yet, you'll notice very little change in the surroundings during that walk. It feels like you haven't really gone anywhere. However, in Shanghai, a 15-minute walk will take you through numerous changing street scenes, making it feel like you've traveled much farther. The experience is entirely different.

In Beijing, to get anywhere interesting, you must either drive or take public transportation. The city's roads are designed for cars, not people. Even crossing the street becomes a challenge - at many intersections, you have to cross halfway to the median, then wait for another light to cross the remaining half. The city keeps expanding outward, from the Second Ring Road to the Third, Fourth, Fifth, and Sixth Ring Roads - some even joke about a Seventh Ring Road now. Commuting distances keep growing longer; no matter where you're going, it always seems to take at least an hour to get there.

The second reason I never warmed to Beijing lies in its architecture. To be blunt, Beijing's buildings are grandiose yet impractical - imposing in appearance but completely divorced from human scale and everyday needs.

Take Terminal 3 of Beijing Capital International Airport, for example. When it first opened, I remember feeling utterly diminished by its cavernous emptiness. This epitomizes Beijing's architectural philosophy: prioritizing monumental grandeur over human comfort. All major structures here follow this same oppressive scale.

This architectural ethos stems directly from Beijing's imperial legacy. When my tutor first visited, I arranged for a student to take him to the Forbidden City - as most foreign visitors do. Afterwards, when I asked about his impressions, he confessed that he had felt an overwhelming urge to kneel upon entering the Hall of Supreme Harmony. "Exactly!" I replied. “That’s precisely what the emperors wanted - to make visitors prostrate themselves instinctively.”

In imperial times, Tiananmen Square was deliberately designed as a narrow passage. Ministers would rise at 3-4 AM, travel drowsily by oxcart to Zhengyang Gate, then proceed on foot until exhausted. By the time they reached the Hall of Supreme Harmony, their weary legs would naturally buckle in submission. This imperial psychology still permeates Beijing's architecture today.

Now for the third reason—and I might offend some Beijingers here—the local ethos never resonated with me. Everyone carries themselves like self-important dignitaries, always pontificating about grand matters with that characteristic Beijing bravado. But scratch the surface, and you'll find many operate on pure emotion rather than rational thought.

A psychologist from the University of Chicago, who spent his student years in China, conducted several notable experiments comparing wheat-culture and rice-culture mentalities. His findings showed that wheat-culture people (predominantly northerners) tend toward individualism, while rice-culture people (mainly southerners) lean toward collectivism. But here's the twist—northern individualism carries a distinct outlaw edge, likely forged through centuries living on war-torn frontiers where nomadic and Han civilizations clashed.

In a small study I co-authored with a postdoctoral researcher, we examined the impact of transferring southern Chinese officials to northern regions and vice versa. Our findings revealed a striking asymmetry: when southern cadres were assigned to the north, they consistently boosted local economic growth; however, transfers of northern officials to the south produced no measurable effect.

We interpreted this through a cultural lens: southern cadres brought with them the South's pragmatic, rules-based governance style. Given the substantial administrative power Chinese officials wield, a single transferred leader could meaningfully reshape a city's development trajectory. These findings provide empirical evidence for the profound north-south divide in governance approaches.

This cultural divergence has manifested starkly in economic outcomes. Since 2016, when southern China's per capita GDP first surpassed that of the north, the gap has only widened. At its core, this reflects fundamental differences in whether a region's people and institutions rationally approach problems. By this measure—the capacity for dispassionate, evidence-based decision-making—Shanghai and the broader southern region have demonstrably outperformed Beijing and northern China.

In closing, we’ve arrived in Shanghai brimming with excitement, ready to begin the next chapter of our lives. Admittedly, my wife and I have been navigating geographical transitions for over two decades—through international fellowships and domestic relocations that required rebuilding our home repeatedly. Even our time in Xi’an never quite felt like a true homecoming, as children of state-factory employees transferred from elsewhere, we existed in a bubble with little connection to the local community. So we’ve long grown accustomed to being "perpetual outsiders" wherever we settle. This move to Shanghai might seem like a seismic shift to some, but to us, it’s simply another variation on a familiar theme.

I’ve always admired Su Shi’s poetic wisdom: "Home is where the heart is." Where your heart finds its anchor, there your home shall be. Shanghai is becoming our second hometown.