Why Chinese Graduates prefer Lower-Tier Cities over Beijing and Shanghai

04/02/2019

Although Tier 2 cities have a large number of university graduates, they used to leave to pursue success and big salaries in cities like Beijing or Shanghai. But this trend is changing and more talents now prefer to settle down in lower-tier cities

 

Students are always on the move. We are used to imagining young people leaving their hometown with a few belongings and just one goal in mind: studying and building a career in the country’s major city.

However, in China, a recent trend sees millennials moving in the opposite direction. After their studies, Chinese graduates have started to prefer lower-tier cities rather than first-tier ones.

According to last year annual College Graduates’ Employment Report, in 2017, only 22.3% of university graduates chose to work in Tier 1 cities such as Beijing or Shanghai, 1.3% less than the previous year and almost 6% less from 2013. Instead, in the same year, 21.7% of Chinese graduates preferred to leave major cities in order to pursue better careers in lower-tier cities, 8% more than in 2015.

 

Chinese Graduates prefer Lower-Tier Cities - guangzhou - graduation - cifnews

© Unsplash. Guangzhou. Last year, China’s universities produced a record number of over 8 million graduates.

 

With 69.1% of graduates, Hangzhou is the most appealing location for new workers, even if cities such as Nanjing and Tianjin also gain preference over traditional megacities such as Guangzhou and Shenzhen.

Therefore, this year, provincial capitals, as well as emerging coastal cities, are welcoming a large percentage of the Chinese new graduate students from the most important Universities of Beijing, Shanghai, and Guangzhou, who want to start their careers out of those cities.

The rapid economic development of second-tier cities is surely one of the main factors that lure young Chinese. Therefore, fast-growing cities such as Chongqing, Chengdu, Wuhan, and Suzhou represent new career opportunities for students due to the increasing number of companies registered in these areas lately.

 

Besides economic growth, the launch of new favorable policies in lower-tier cities has contributed to attracting the younger population.

 

In order to fight Chinese students’ discouragement in front of the complicated process of obtaining the residence permit, many cities launched new favorable policies. In fact, for non-local Chinese trying to live and work in a big city and trying to obtain the hukou have always been a real challenge.

The hukou, 户口, is the household registration document, which ensures a residence permit and access to many social services, such as eligibility to buy a home and health care. Obtaining this document used to be a complicated process, however, in order to welcome new citizens, now Tier 2 cities developed a preferential treatment to achieve it.

Now a student can apply for permanent residency in the city on the basis of a student cart and a national ID in just three minutes by submitting the documents through messaging apps like WeChat.

Nevertheless, easing the process of dealing with the residence permit was not enough to bring young Chinese to prefer to live in certain cities over others. So, many emerging cities have decided to provide graduate students with housing and living subsidies.

Changsha and Nanjing are some of the centers, which recently approved a program to offer new graduates subsidies to help them with the house rent and the job search.

 

Chinese Graduates prefer Lower-Tier Cities - Wuhan - cifnews

© Unsplash. Wuhan, Hubei. Wuhan announced a plan to attract 1 million university graduates in the next five years by offering favorable policies and lower housing prices.

 

With the same aim in mind, Wuhan, in Hubei province, planned to build affordable housing for university graduates allowing them to buy or rent apartments at a discount price. The city used to have a large number of university students, who used to leave after graduation though. Therefore, it now encourages businesses to prioritize local graduates when hiring.

Then, as part of a strategy to become a “strong district of talent,” Hangzhou’s downtown Xiacheng District announced that it would select 20 graduates-to-be from the world’s most prestigious universities and offer them civil servant positions with a starting annual salary of 150,000 yuan ($ 22,239).

In the Sichuan province, instead, Chengdu is trying to tempt people by displaying alluring slogans like “Chengdu promises you a beautiful future” on digital billboards in Hangzhou’s most heavily trafficked subway stations while offering up to one week of free accommodation to fresh graduates coming to the city in search of work.

The Province’s capital also uses its cultural symbol – the giant panda – to lure talents. Entrepreneurs who obtain the city’s “talent green card” can enjoy free visits to the city’s panda breeding center in addition to free visits to city-owned museums, free use of shared bikes, discount on public transportation and fast-track hospital care and bank service.

“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,” said Zeng Luxian, a Sichuan’s graduate from Neijiang who obtained permanent residence in Chengdu.

 

Chinese Graduates prefer Lower-Tier Cities - Chongqing - cifnews

© Unsplash. Chongqing. Last year, Chongqing reached a record number of students graduating from first-tier cities’ universities coming for job interviews.

 

Xi’an, in particular, has updated its incentives policies five times in a year. Since these policies have been activated, the city has added about half a million people to its household registry, a lot more than the 290,000 people it added over the preceding five years.

 

Nevertheless, although the reasons to choose lower-tier cities over first-tier ones are clear, college students also have numerous reasons for wanting to abandon the big city life.

 

In cities like Beijing and Shanghai, young people have to face increasing overcrowding which led to an unbearable high-cost and high-pressure lifestyle. Many Chinese come from rural areas to these cities with the dream of success and big salaries but what they find is a city near as expensive as New York where no new graduate could survive on a starting salary.

“In cities like Chengdu, I can still pursue my dreams but without all the struggling,” said Xu Yingqiang, a Tsinghua University’s graduate who left Beijing to work in the Sichuan’s capital.

 

Chinese Graduates prefer Lower-Tier Cities - Shenzhen - cifnews

© Unsplash. Shenzhen, Guangdong. China’s major cities like Shenzhen saw home prices rise by at least 20%, some neighborhoods in Shanghai even by 40% in the last five years.

 

First-tier cities’ housing prices have skyrocketed not only for foreigners but also for non-local Chinese, so much so that these Tier 1 cities saw their population decrease in the last few years. According to data on the population of Beijing, at the end of 2018, there were 21.7 million permanent residents and 7.9 million migrant residents, respectively 22,000 and 132,000 less than at the end of 2017.

Therefore, second-tier cities wish to take advantage of the educated workers’ exodus to reinforce their own aging workforce and to build new hubs for talents. In fact, high-quality human resources are the key driver of the transformation and upgrading of lower-tier cities into China’s innovation centers, whose development is also reached thanks to the adopting of favorable employment policies.

 

“Development is the top priority, talents are the primary resources, and innovation is the primary driving force,” said Chinese President, Xi Jinping.

 

Therefore, the Chinese government’s decision to develop satellite cities goes hand in hand with the need to cater to successful Chinese graduates desiring to work in sectors not found in second-tier cities.

The new trend of graduate students choosing to work and live in lower-tier cities not only helps lessen the burden for first-tier cities such as overpopulation and talents overcrowding, but it also helps lower-tier cities to develop and grow by receiving more Chinese bright minds.

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