Company representatives speak with a foreign expert at the Shandong High-Level Talents Exchange and Economic, Trade Cooperation Fair in Jinan, Shandong province. Gong Hui / for China Daily

Yancheng, Jiangsu - Cai Haijun said he was happy to leave his villa and his job as a research manager in Canada for an apartment and a chance to start his own companies in Yancheng, a second-tier city in East China`s Jiangsu province.

The 46-year-old is among a growing number of Chinese with overseas experience and foreigners who are seeking opportunities in smaller Chinese cities. Not only are second-tier cities` costs of living far lower than those of megalopolises, such as Beijing and Shanghai, but also, governments are offering preferential policies to lure talented Chinese with overseas experience and foreign experts.

"It is an amazing market," Cai said.

"I have better career opportunities, and I have persuaded my wife in Canada to return to China soon. And going from working as a researcher to being the boss offers a great sense of accomplishment."

Cai earned his PhD in polymer chemistry from Laval University in 2002 and worked for three Canada-based companies as a researcher or technology manager.

In July of 2009, he moved to Yancheng to start his own business. He now owns two companies in Jiangsu.

"The government offered me a very attractive package, including free accommodation, startup funds, human resource support and other assistance," Cai said.

"My current income here can sustain the standard of living I enjoyed in Canada," Cai explained.

The government has provided him with a 60-square-meter apartment, and next year his family can move into a more spacious "talent apartment" provided by the city government. Housing is on average about five to six times cheaper in Yancheng than in Beijing or Shanghai, while the cost of living is lower and the traffic is better, too.

The central government seeks to increase the country`s talent pool from 114 million to 180 million highly skilled workers by 2020. It will spend 15 percent of its GDP on human resources during the period. The pledge was included in the National Outline for Medium- and Long-Term Talent Development (2010-2020) released in June this year.

More than 800 overseas Chinese and foreign academics who have working experience at globally leading institutions or enterprises have signed up with the national Thousand Talents Program.

The program, launched earlier last year, is an ambitious plan to recruit 2,000 talented professionals worldwide in five to 10 years to help the country achieve its goal of becoming an innovation-oriented nation.

Local governments are also starting programs to lure overseas expertise.

This year, 35 enterprises from Yinchuan, capital of Northwest China`s Ningxia Hui autonomous region, have competed to hire individuals with master`s degrees or PhDs in Beijing. The local government offers every graduate with a master`s degree a monthly subsidy of 1,000 yuan ($149.98), while PhDs get 1,200 yuan.

The Beijing Municipal Commission of Education said a record 17,000 university graduates in the capital went to work in western provinces in 2009.

And more than 730 Chinese with experience in 25 countries and regions attended the recent 2010 Shandong Overseas Talents Talks. They submitted about 600 project proposals related to a variety of sectors.

The program aims to lure 10,000 overseas Chinese to work in Shandong over the next five to 10 years and will provide them with 100 working bases. The most qualified individuals are eligible for 1 million yuan in subsidies.

Since 2001, the province`s previous five Talents Talks have attracted more than 2,500 overseas Chinese, generating 1,600 projects and creating 200 new enterprises, Shandong`s human resources and social security head Dong Guoxun said.

Among them is Hong Xiaoying, who lived in the United States for 20 years and earned his PhD from Stanford University. He plans to open an electronics factory in Shandong in the next three months.

Hong said he made the decision at the 2010 Talents Talks after speaking to the city`s personnel authority in Jinan that heads up a "5150" human resources program.

"I`m very confident about my prospects," Hong said.

"I believe that with the government funding, the favorable terms and the talent pool I can access here, it will be successful."

More than 82,000 foreign experts have worked in Shandong in the past five years, introducing 1,500 new technologies and solving more than 6,000 industry problems.

"These foreign experts contribute a lot to Shandong`s development in all sectors," Dong said.

To date, 321 foreign experts have received the Qilu Friendship Award, the province`s highest honor for foreigners who make outstanding contributions to Shandong`s economy.

Slovak Karol Vanko, general director of Mesnac Co Ltd and one of the 18 winners of this year`s award, said: "I love working in Shandong, and it is also our biggest market in China".

Liang Chen contributed to this story.