Second-tier cities wage battle for top talent

A new battleground has emerged as China’s second-tier cities vie for talent with generous incentives ranging from subsidies for house rentals to free trips to a panda center.

When Jiang Tao, 39, was a budding entrepreneur, nearly all of China’s economic zones tried to recruit him.

Hangzhou’s preferential policies and attitude toward talent was successful in attracting Jiang, who received his doctorate in chemical engineering from the University of Virginia.

“I chose Hangzhou because the city’s support for startup entrepreneurs was more than I expected,” said Jiang, who leads a team of young researchers in developing biomaterial for bone regeneration.

His firm was qualified to obtain 5 million yuan (US$756,330) in startup funds for setting up its headquarters in Hangzhou, host city of the G20 summit last year and home to e-commerce giant Alibaba.

Jiang has based his business in Binjiang District, which offered him 1 million yuan of startup funds, an exemption on office rental fees for three years, and a subsidy of up to 10 million yuan for research and development spending.

To lure professionals from first-tier and second-tier cities — such as Hangzhou, Chengdu, Wuhan, Changsha and Shenyang — are offering incentives, including relaxed residency permits, subsidies for house and car purchases and home rentals, and cash payments.

Chengdu, the capital of the southwestern province of Sichuan, issued its most enticing preferential policies yet in late July to help the city to retain talents.

Perks and subsidies

The city will give permanent residence to graduates with a bachelor’s degree or higher and promises seven days of free accommodation for graduates who visit Chengdu in search of jobs.

For talents such as high-level researchers and cultural workers in areas listed as national intangible cultural heritage, the city will award subsidies of up to 3,000 yuan per person per month for the first three years. 

In addition to common incentives, Chengdu has also used its cultural symbol, the giant panda, to lure talents.

Researchers and entrepreneurs who obtain Chengdu’s “talent green cards” can enjoy free visits to the city’s panda breeding research center. Other benefits for card holders include a discount on public transport, free visits to city-owned museums, free use of shared bicycles, and fast-track banking services and hospital care.

Zeng Luxian, who graduated with a doctorate from Sichuan University, recently obtained permanent residence in Chengdu, 200 kilometers from her hometown of Neijiang City.

“The new policies don’t mean that we can afford a house in the city, but at least they let us see the city’s attitude toward young people. It wants you to stay,” she said.

China’s economy has entered a “new normal,” featuring medium to high growth rather than fast growth, along with an upgraded economic structure and innovation.

“The changes in the world’s second-largest economy are pushing up demand for skilled workers,” said Cai Yifei, an associate researcher with the Chinese Academy of Social Sciences.

Earlier this year, China reformed its visa policies to provide easier access to public services to foreigners in the country. In 2008, it launched a national “Thousand Talent” recruitment program to attract academics and researchers educated abroad.

More recently, second-tier cities have launched similar campaigns to lure talents.

Shenyang, an industrial city in northeast China, plans to employ 700,000 university graduates over the next five years by offering them incentives such as permanent residence and subsidies of up to 60,000 yuan for those who buy their first house there.

The charms of the second-tier cities have caught the attention of top talents in recent years, partly because of surging living costs and booming property prices in the bigger cities.

A survey by Boss Zhipin, an online jobs site showed that about 51.8 percent of new college graduates this year chose to work in second-tier cities, up 7.8 percentage points from last year.

“The cutthroat battle for talent shows that Chinese cities have changed their focus from competing for investment to innovation,” said Cai.