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While major cities like Beijing, Shanghai, and Guangzhou remain popular for job seekers, China’s second-tier cities are gaining popularity, especially among the post-90s generation, according to a new report.

The report, issued by the Beijing-based major online recruitment platform Zhipin.com, showed that Hangzhou and Shenzhen have become the most attractive city for white-collar workers and university graduates, respectively, after Beijing and Shanghai.

Meanwhile, Guangzhou is losing its competitive edge compared to Hangzhou and Shenzhen – where internet giants Alibaba and Tencent are headquartered.

The report found that 32 percent of 2017 graduates wanted to work in first-tier cities, some four percentage points lower than the previous year. Over the past three years, major cities have in fact being lost talents. In the first six months of this year, the loss rate was 0.51 percent, 0.3 percentage points higher than 2016.

It added that high housing prices and bad weather conditions are giving people reason to leave the first-tier cities. In Beijing, for example, smog sometimes chokes the city. Second-tier cities, where living costs and conditions are relatively better, are especially popular among the post-90s generation. Some 45 percent would prefer a smaller city, some 8 percent higher than other generations.

However, the average salary amount also drops when people move to a smaller city. Those who do choose to make the move to second-tier cities will find their pay at 91.2 percent of their old jobs. Yet the average payment of those moving away from first-tier cities remains 30 percent higher than those who choose to stay.

But that pay would actually increase for those holding a doctorate degree, since the financial capabilities of second-tier cities is expected to improve. Their hunger for talent has also made them strong competitors.