Guangzhou joins China’s race for talented overseas graduates as economic competition heats up
- The capital city of China’s Guangdong province lowers its requirements to obtain a local residency permit, which is needed to access health care and education
- Many medium-sized cities are offering lavish incentives to recruit talent to boost their economic development
Guangzhou has lowered a major threshold for Chinese graduates returning from studying overseas who want to become legal residents of the coastal city, joining in a heated fight for skilled workers already underway between dozens of medium and large cities across the country.
The move to reduce the barriers to receiving a local hukou, the residency permit that allows citizens to receive state-funded services such as health care and education, is the latest move by the capital city of China’s Guangdong province as it seeks to fall in line with Beijing’s vision for the Greater Bay Area.
The Greater Bay Area is the Chinese government's scheme to link the cities of Hong Kong, Macau, Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing into an integrated economic and business hub, and to achieve that, an abundance of top young talent is necessary.
Graduates who start work in or create a start-up in Guangzhou within two years of graduating no longer need to first contribute to China’s national pension fund for at least six months to apply for a hukou, they simply need a record of having made a contribution to the social security fund.
Earlier this year, Guangzhou changed the age limit for holders of a bachelor’s or greater to obtain a hukou to 40, up from the previous limit of 35.
Guangzhou’s bid to attract talent, which has been increasingly popular across China over the last two years, partly reflects increasing pressure from the incentives being offered by many smaller, second-tier cities to recruit high-calibre graduates to grow their economies and speed up urbanisation.
The Chinese government recently relaxed the national hukou system, which it had used from years to control migration, by completely abolishing restrictions on settling in cities with populations of between 1 million and 3 million as well as loosening restrictions for cities with populations from 3 million to 5 million.
The competition for talent comes as China’s overall work force continues to shrink. The working age population – those aged between 16 and 59 – fell 0.5 per cent last year to 897 million, and is down 2.8 per cent since 2011, the National Bureau of Statistics announced in January.
Indeed, the competition between cities is very fierce except for Beijing and Shanghai that still want to control their populations.
As one of the four large tier one cities along with Beijing, Shanghai, and Shenzhen, Guangzhou had in the region of 14 million residents at the end of last year, an increase of 400,000 from 2017. In contrast, Beijing lost 165,000 residents during the same period, according to their respective government reports.
“Indeed, the competition between cities is very fierce except for Beijing and Shanghai that still want to control their populations,” said Xu Jianwei, senior China economist for French banks Natixis.
“I think Beijing and Shanghai shoulder too many non-economic functions. Having too many people could increase the difficulty of [city] management. From that perspective, Guangdong as an economic powerhouse has a simpler job [to just grow the economy].”
So far this year, more than 60 cities – mainly second-tier and third-tier – have announced talent recruitment policies with a record amounts of subsidies and incentives, according to the Centaline Property Research Centre.
Ningbo, a port city in eastern China’s Zhejiang province, is offering a subsidy of 50,000 yuan (US$7,425) for returning overseas graduates who contribute to the social security fund for more than six months.
In the Pearl River Delta, there has been a clear trend for people to move to one of the nine larger cities included in the Greater Bay Area plan while other parts of the province are facing a shortage of talent.
