Talent management crucial for cities’ progress

In about four decades, from 1978 to 2017, China’s urbanization rate increased from 18 percent to 58.52 percent, which is very high compared with other countries’ rates. China’s urbanization rate passed 50 percent for the first time in 2011.

This means the country’s urbanization rate should slow down now. In reality, however, despite the expansion of many cities in China, the population of some is shrinking, which many experts regard as a city losing its vitality.

Yet the “shrinking cities” have not grabbed public attention in China, because some cities adjust their administrative division by incorporating neighboring counties into the urban areas, which causes a decline in population density but not a reduction in the urban population. Even cities with net population outflow are expanding their urban areas with huge infrastructure construction projects, which hide the increasing “population crisis”.

The rising competition for talent among cities has something to do with this. In the 13th FiveYear Plan (2016-20), central finance transfer payment and land distribution for urban construction are directly related to the population. In other words, only when its population grows can a city increase its urban area and launch more large-scale public infrastructure projects, and thus increase its investment and income.

Given the lack of sufficient external and internal demands today, large-scale infrastructure construction is a potent way to raise regional economic growth. Therefore, the competition among cities to attract talent is actually the competition for creating space for future development of the cities.

Due to rapid urbanization, various cities set population growth targets higher than their current development level, despite the fact that many cities face or are about to

face the problem of shrinking and aging populations.

Besides, when economic growth slows down, the population flow will be concentrated more in a few megacities, putting more population pressure on these cities. This is also one of the reasons for the intensifying competition for talent.

Since last year the real estate control policies have been increasingly upgraded, leading to a decline in property sales. The resultant decline of the local economies’ top pillar industry has caused financial problems for the local governments. And since the transformation and upgrading of the economic structure will not yield results overnight, the debt problem of new urban area development and infrastructure construction is worsening.

True, the introduction of talent could ease the pressure of population outflow and provide qualified individuals for the transformation and upgrading of the economic structure, which in turn will intensify the talent competition among cities. But blind competition for talent is not good for high-quality economic development.

First, it goes against innovative economic development, which requires free flow of talent that would enable the appropriate talent to hold the appropriate post so they can optimize their skills and intelligence. Blind talent competition, on the other hand, restricts the flow of talents, because of factors such as household registration, which is not conducive to optimum distribution of human resources.

Second, blind competition for talent goes against the basic principle of open economy since it causes the separation of and builds barriers to the talent market.

And third, without a high industrial development level, a city cannot hold on to highend talent for long, and without an innovative environment, innovative talent will lose its innovation potential.

So the local governments should not introduce highend talent without taking into account the actual local situation. Instead, they should make a talent introduction plan that best suits their local industrial development level. The author is a researcher at the Institute for Urban and Environmental Studies, Chinese Academy of Social Sciences.

Wang Yeqiang