A necessary, urgent change
The loosening of visa and employment regulations is not merely a move by Shanghai to become a global center of innovation in the science and technology industries. Rather, the set of 20 measures that aim to attract and retain top foreign talent is a necessary step in the right direction to address some of Shanghai’s most pressing issues — a fast aging population and brain drain.
Shanghai has the oldest population in China. More than 25 percent of its residents are aged over 60, markedly higher than the national average of 17 percent. The proportion of elderly residents is expected to jump to about 30 percent by 2020, a worrying statistic that would lead to problems in the workforce.
It also does not help that Shanghai has one of the lowest fertility rates in the world, with the average per couple being less than one child. Even if the family planning authority had reformed the current policies a year ago and allowed couples to have their second child, statistics show that less than 20 percent of the qualified couples actually want to become second-time parents.
To exacerbate matters, Shanghai is experiencing a brain drain that needs to be quickly managed. Although there are no official statistics, it is a well-known fact that some elite Shanghai families have emigrated to developed countries, leaving behind only the senior residents.
Thanks to the constant influx of migrant workers, the city’s population has increased during the urbanization process. However, most of the newcomers to Shanghai are still concentrated in the lower-end service sectors and do not fulfill the city’s needs for senior management and professional talents who are equipped with global experience and views in the finance, trade, insurance, logistics, transportation and high-technology sectors.
While there are already many foreign professionals in Shanghai, most of whom enter the city via employment by international companies, what the municipal authority needs is a more stable and larger talent pool that not only serves the corporate interest, but more importantly, the city’s transformation needs.
The government will also be hoping that these talents will identify themselves as permanent residents and see Shanghai as their new home, instead of being the employee of a company who is merely passing through.
The movement of talent in developed countries has always been affected more by market-based factors than government action. The main draws to a country usually include attractive welfare benefits, security to intellectual property, standard of living, as well as a good natural environment. In Shanghai’s case, the air and water pollution in the Yangtze River Delta could be stumbling blocks.
Apart from relying on China’s rise as an economic powerhouse and the plethora of opportunities available, the authority in Shanghai must now transform these 20 measures into a practical and implementable system that is based more on the charms of the city than the money coursing through it.
The significant changes that have been introduced to visa and employment regulations suggest that the government acknowledges the dire consequences of losing local and foreign talent to other cities, and the fact that it is now easier for a foreigner to gain a permanent residential permit indicates Shanghai’s resolve to be the destination of choice for the world’s best of minds.