GBA Brief

China’s war for talent is being fought on many fronts

The trade war may be making more of the headlines but a ‘war for talent’ is being waged in Guangdong, home to the Greater Bay Area and also China’s most populated province, with 113.5 million people. 

Last month we reported how Shenzhen was trying to seduce tech professionals with tax breaks. The push was being positioned as a response to the Trump administration’s targeting of Huawei, with the reasoning that the Chinese need a self-sufficient supply chain if they are to sidestep the same situation in future. 

But it’s not just an international battle. As soon as we mentioned Shenzhen’s efforts, there were reports that Guangzhou was rolling out more measures of its own, having already made it much easier for new arrivals to get residency permits in the last two years. 

Then there was news that Zhongshan, a smaller city on the western banks of the Pearl River, would be rolling out its own version of the welcome mat. And in another piece earlier this month, a contributor to GBA Brief talked about how he was able to secure incentives for a start-up in the Hengqin special zone near Zhuhai, as well as monthly payouts for its key personnel.

In fact, parts of the GBA have always had bigger migrant populations than elsewhere in China because the manufacturing miracle of the reform era was a magnet to workers from other parts of the country. 

A completely new city like Shenzhen, which had to attract millions of outsiders, is a case in point. Mandarin is the language of choice there because it is home to so many people with different native dialects. Travel a few minutes to neighbouring Guangzhou, an established city with centuries of history, and you are much more likely to hear Cantonese, the provincial tongue for Guangdong.

But the search for workers today is rather different to the tens of millions of new migrants who filled factories in the 1980s and 1990s. Now the talk is of capturing know-how rather than elbow grease, something that the Chinese have been trying for years by encouraging the return of the haigui, or ‘sea turtles’, a term for graduates who come home after studying abroad.

Skill sets like these are supposed to power a workforce that trades more on quality than quantity. Yet size still matters in places like Guangzhou, which has just published a new plan to become an “international metropolis” of 20 million people by 2035. To get there it will need to add at least 300,000 people a year.

Presumably, most of these newcomers are supposed to be the well-educated, over-achievers that the other top-tier cities are chasing as well. But the campaigns to attract them are concerning the central government, which worries that the richer cities are sucking the lifeblood out of lesser-developed parts of the country. Last week there was even a warning from the State Council that cash incentives and other special benefits shouldn’t be used to lure the brightest minds from other areas.

Creativity at city and provincial level will make them difficult to police but directives like these are part of a bid to protect other parts of the country, including what is left of the economies in rust belt provinces like Jilin, Heilongjiang and Liaoning, where state enterprises are struggling to survive in smokestack sectors like steel and coal.

These economies are almost the mirror images of places like the GBA, where the focus is a high-tech, green, super-productive future. They are also why young people are leaving in droves: the median age in the three provinces was 42 in 2015, compared to 37 in the rest of China.

Perhaps that was why the news of the bans on incentives for quality migrants provoked an angry response on social media, with accusations that the policy was tantamount to chaining people to their birthplaces. Skilled workers would be stupid to take a job in rust belt cities was another piece of advice, because they might get trapped there forever. 

All in all, it’s a useful reminder that the war for talent is being fought on many fronts: not just the superpower clash with Washington, but as a struggle between provinces in China, and even the rivalries inside the GBA itself.