Smaller cities lure fresh grads with cash incentives, but long-term strategy needed

Updated 2017-09-01 09:31:06 Global Times

As this year's 8 million fresh college graduates enter the workforce, China's cities have launched their charm offensive in the annual "war" to lure talents to make contributions to their development. This year the "war" is fiercer than ever with the participation of many second-tier cities.

Unlike first-tier cities with their skyrocketing housing prices and restrictions on applying for residency permits, or hukou, second-tier cities, such as Changsha, capital of Central China's Hunan Province, and Wuhan, capital of Central China's Hubei Province, have rolled out preferential policies for graduates, subsidies for renting or purchasing houses and shattering thresholds on getting a hukou.

However, experts believe that these incentive policies have a limited effect on attracting college graduates, and even if they work, second-tier cities have to come up with plans to make them stay on a long-term basis.

Olive branch

Wuhan vowed to be a welcoming city for college students and plans to lure in a million graduates over the coming five years, said Chen Yixin, Party chief of Wuhan, China National Radio reported on August 27.

Chen said that Wuhan will offer 3,600 apartments this year to college graduates, and plans to offer a 20 percent discount for graduates when they buy houses. Meanwhile, college graduates can get hukou simply by submitting their diploma from August 1.

New Changsha hukou owners with a master's degree could get 30,000 yuan (,548) as a home-buying subsidy, and the subsidy for those with doctoral degrees is 60,000 yuan, China Central Television (CCTV) reported Tuesday.

Nanjing, capital of East China's Jiangsu Province, has introduced five preferential policies for college graduates on renting and purchasing homes, according to the CCTV report.

Regarding these golden invitations offered by second-tier cities, about 75 percent of the 1,024 graduates polled by The Beijing News said that they would seek jobs in those cities, and 48 percent said that chances for personal development are the most valuable thing when it comes to choosing cities to work in, The Beijing News reported.

However, some college graduates are still reluctant to live in second-tier cities. Yang Jing, a law graduate from Renmin University of China, said that she will stay in Beijing rather than going back to Wuhan.

"Life would be so easy at home. My family could find me a job unrelated to my major through their network of contacts, but Beijing has more chances with more law firms," she said.

Win or lose

China's second-tier cities are currently at a key stage of transforming and upgrading themselves, and the focus of these cities has moved from stressing traditional industries and capital investment to human talents, according to a commentary published by the People's Daily on August 10.

"Second-tier cities have more development space and more employment opportunities than first-tier cities which have mature development and saturated population size," said Niu Fengrui, a research fellow at the Chinese Academy of Social Sciences.

"But those incentive polices have a very limited effect on luring talents, and they may not work on a long-term basis and even may generate negative impacts," Niu said.

For example, these policies are limited to new graduates or new local hukou holders, so they seem unfair to those who graduated years ago, Niu said.

The People's Daily commentary said that second-tier cities' tangled human networks, unfair environment for competition and small development space could result in brain drains, and these problems cannot be solved with short-term policies.

Meanwhile, not all graduates can contribute to development and it takes time to assess their ability, according to Niu.

Yang Zhihuang, a research fellow at Co-innovation Center for State Governance, said that incentive policies work in the short term, especially considering the tighter population policies introduced by first-tier cities such as Beijing, the Economic Daily reported.

Yang said that rather than introducing house purchasing policies, cities should come up with different preferential policies in keeping to their competitive industries and development levels.

"The ultimate solution is to provide graduates with job opportunities that fit their talents and to increase their salaries. Second-tier cities need to come up with institutional incentives, such as institutions to encourage entrepreneurship and policies to protect intellectual property, to attract talents to live in them for a long time," Niu said.

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