City growth not just about people
There’s a growing trend in China of bigger cities competing for talent to contribute to a national push for innovation-oriented quality growth, but few of these cities have welldesigned policy toolboxes to leverage the inflow of talent for balanced growth.
So far this year, more than two dozen first- and second-tier cities have announced plans to lure new graduates, and young and middle-aged domestic and foreign professionals, to help drive their economic futures.
China’s demographics are changing. Increasingly, affluent couples hesitate to have more than one child, and that will reduce the labor force and hurt the development and sustainability of Chinese cities. This helps explain why so many cities have gone on a charm offensive to welcome new entrants.
Major cities like Xi’an, Chongqing, Wuhan, Tianjin, Zhengzhou, Nanjing and Chengdu are offering new residents discounts on home purchases, easier access to household residence permits, tax breaks and even cash incentives for start-ups, to attract more talent.
The battle for the young and the educated is expected to escalate, as the nation is moving up the economic ladder from a labor-intensive structure to a knowledge-centric one. Quality human resources, after all, are the primary force in driving the growth of a city.
To spur innovation, China will make more effort to encourage overseas Chinese students to return after completing their studies, while creating
a fast-track program to lure more foreign talent, Premier Li Keqiang said in his annual government work report to the legislature in March. When it comes to the world’s best cities, the old adage “you get what you pay for” rings particularly true. Compare California’s prominent cities with rust-belt cities in America’s middle states, or India’s Bangalore with Kolkata or Ahmedabad. Chinese cities are no exception. Shenzhen, nicknamed China’s Silicon Valley, is known for drawing talented people and fostering technological innovation. The economy of the city, the brainchild of late Chinese leader Deng Xiaoping, exceeded that of its giant neighbor Hong Kong last year. Shenzhen, backed by a more powerful private sector, an ever-expanding middle class, a rising cohort of college graduates and overseas student returnees, and capital inflows, is projected to compete with Beijing and Shanghai for affluence in the coming years. Endowed with unparalleled resources, the city has yet to see its heyday. Like Shenzhen, other Chinese cities are making impressive progress in technology achievements. Hangzhou in East China’s Zhejiang Province has pushed ahead in e-commerce and mobile innovation for hosting the technology powerhouse Alibaba, while Guiyang, Southwest China’s Guizhou Province aims to achieve prominence in cloud computing and big data. Qingdao in East China’s Shandong Province is a leader in the production of industrial robots. These pioneering cities – in addition to the acclaimed Xiong’an New Zone in North China’s Hebei Province, which has drawn a growth plan relying on high-tech innovation – will act as beacons for other Chinese cities to learn from and catch up with. The stakes are high for the two dozen big Chinese cities that have gone on a talent hunt. None of them want to be left behind in the central government-led endeavor to basically realize socialist modernization by 2035.
The cities’ competition for the young and the talented is expected to last for a long time and maybe even intensify. As long as China’s yearly GDP growth is kept at 6.5 percent, job vacancies could increase by 13 million annually.
However, some experts have warned cities not to pursue a large number of new residents just to prop up local property markets. The majority of Chinese cities’ financial revenues come from selling government-owned land.
If a city’s resident population surpasses 10 million but it doesn’t have much of a high-technology sector, sooner or later it will have enormous trouble in providing jobs. The consequences could be grave when a city of that scale has swarms of unemployed people, and poverty and crime will become inevitable.
Some economic observers have also anticipated an upcoming surge in “people production” as cities lure relatively young residents. Whether the central government will scrap its decades-old childbirth policy and let couples have as many children as they like remains to be seen.
But any decision to abandon the current “one couple-two babies” family planning policy must be made on the grounds of science, not impulse. After all, China’s economy is not likely to grow at its current speed forever, and its ability to support more than 1.4 billion people is a test for the country.