Why are China’s second-tier cities fighting for talents?
 
Undergraduate students are seeking jobs in Wuhan on Feb.26, 2018. Photo: VCG
 
An increasing number of Chinese second-tier cities have rolled out preferential policies in recent weeks in a bid to attract university graduates, which has been dubbed by Chinese media as a “battle for talents”. 
 
These cities include Xi’an of Shaanxi province, Chengdu of southwestern Sichuan province, Nanjing of Jiangsu province, Hangzhou of Zhejiang province, as well as Wuhan of Hubei province – all capital cities which have been handed strategic roles in driving regional development.
 
And their tactics to “win over” more talents include lowering the threshold of applying for a local household registration, or hukou, giving equal access to public benefits such as local healthcare and education resources, subsidies for job seekers, as well as providing house rental and entrepreneurship allowances.
 
According to The Paper, a Chinese news website, university graduates can apply online for a Xi’an hukou which will allow them to enjoy local public services such as healthcare and public schooling with only a student card and an ID (identification) card. 
 
The government of Nanjing on March 1 implemented a policy allowing people under 40 with at least a bachelor’s degree to transfer their hukou to Nanjing, with no age limitation for those who have master’s or doctoral degrees.
 
The city also announced on March 6 that it would offer students graduating from universities outside the city coming to attend interviews a subsidy of 1,000 yuan, which can be applied for via a mobile app.
 
China’s second-tier cities in recent years have stepped up efforts to lure Chinese university degree holders away from first-tier cities like Beijing and Shanghai, by introducing a series of preferential policies which make working and living in second-tier cities more attractive.
 
Some experts attributed the phenomenon to a changing population structure in China.
 
“The accelerating population aging is what is driving the ‘battle’ for talents in China’s second-tier cities,” said Wang Huiyao, the founder and president of the Center for China and Globalization (CCG), a Beijing-based Chinese think tank, at a recent seminar in Beijing. “The sharp reduction in the working-age population has changed China’s population structure which once helped bring China’s rapid development.”
 
“China is now turning into a country with ‘talent dividend’ from the ‘demographic dividend’ in the past,” he added.
 
Wang is echoed by Zhang Yi, a researcher on social development from Chinese Academy of Social Science, who said that the labor force which developed under the once child policy is far from enough to support the current expansion of Chinese urbanization, and competition from second-tier cities for talents also shows a fundamental change in China’s development mode.
 
As attractive as it may seem at first, benefits offered by lower-tier cities are far from being as competitive as those of first-tier cities, despite the high living cost in the large cities, Zhang said.
 
“(In terms of hukou,) first tier-cities are still more competitive than second-tier cities considering the social resources it binds up with,” he said during a recent TV program produced by China Central Television (CCTV). “While first-tier cities like Beijing and Shanghai are competing for talents, second-tier cities are more like competing for labor force, resulting from a decrease in working-age population.”
 
According to Zhang, the competition for talents or labor force would last long because as long as the economic growth rate remains at above 6.5 percent, job vacancies could increase by more than 13 million annually. 
 
Another challenge facing these cities is how to retain talent after they arrive, which Zhang said puts an onus on the government to create an environment in which young people can improve themselves faster and better. 
 
This “battle” for talents also comes at a time when China is stepping up efforts to attract more overseas talents in a bid to implements its innovation-driven development strategy to make the country more “innovative and competitive”.
 
To spur innovation, China will make more efforts in encouraging overseas Chinese students to return after completing their studies, while creating a fast track program to attract more foreign talents to China, said Chinese Premier Li Keqiang, during the country’s annual Two Sessions which closed on March 20.
 
“We have no doubt that by bringing together myriad talents and pooling everyone’s energies, China will break into a sprint innovation”, he said.
 
According to Zhang, to attract more foreign talents, the government should continue to optimize its working and living environment. And he is optimistic about China’s ability to attract foreign talents considering the country’s stability, safety as well as sustainability of development. 

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