China’s Silicon Valley to migrant workers: No degree? No problem

High-tech boom town to grant 10,000 permanent residency spots under quota that puts less premium on education

PUBLISHED : Wednesday, 19 July, 2017, 9:03am
UPDATED : Wednesday, 19 July, 2017, 9:05am

Shenzhen has a message for its millions of migrant workers: you don’t have to be a college graduate or wealthy to become a permanent resident.

Under a new quota system, the boom town known as China’s Silicon Valley on the border with Hong Kong will grant 10,000 migrant workers full residency this year and all the social welfare benefits that come with it.

The new approach could push smaller Chinese cities to adopt similar measures as they compete for labour.

Previously, Shenzhen only targeted those with advanced degrees or technical expertise, or those in higher tax brackets, which left most of its inhabitants on the sidelines.

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But the quota for migrant workers is aimed at dramatically lowering the barrier to entry. Applicants must be employed, have made contributions to local social security funds for at least five years, and either own a flat or be renting one.

Those with a longer property history have a better chance, with one point awarded for each month of flat ownership and a fifth of a point for each month of tenancy.

The 10,000 applicants with the most points will be granted permanent residency.

For now, the policy will only benefit a few. According to official statistics, Shenzhen has 11.9 million residents who had registered properly with the authorities by the end of last year, but only four million of them have permanent residency, or hukou, which grants full access to public education and hospitals, and other social welfare programmes.

The Chinese government plans to grant permanent urban residency to 100 million rural migrants by 2020, although first-tier cities such as Beijing and Shanghai have set up high thresholds for non-locals to obtain permanent residency.

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Under the previously existing system in Shenzhen, applicants needed 100 points to become eligible. Those with doctorates are awarded 100 points, those with master’s degree 90 points, and bachelor-degree holders 80 points. A company legal officer receives 30 points so long as the employer is paying at least 540,000 yuan (US$79,720 or HK$621,000) in tax annually. Individual applicant can earn 100 points if they have paid at least 147,000 yuan in income tax over the past three years.

Even with the lowered requirements of the quota system though, permanent residency will remain out of reach for most of the city’s inhabitants.

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“It means, you have to stand out from millions of migrants to get into the 10,000 quota. It’s an impossible mission for me,” said Liang Zhang, the 32-year-old operator of a small logistics company in Shenzhen.

“Property prices nearby have soared to over 50,000 yuan per square metre in the city. Few migrant workers could afford the cost here and such a point system seems meaningless for most migrant workers with low income.”

Liu Kaiming, head of the Institute of Contemporary Observation in Shenzhen, was also critical of the new scheme.

“It would only be true social progress if millions of hard-working migrant labourers, who are actually the major contributors to the economic miracle of the city, could get the same treatment as their local counterparts,” Liu said.