When second-tier is the best bet for elite job hopefuls

May 02, 2014 09:01
Tangshan in Hebei is one city where college graduates could take flight. Photo: Xinhua

It's enough to daunt even the greatest optimist. This spring, 7.27 million college graduates are embarking on an annual rite of passage made tougher by tepid economic conditions: the job hunt. Many media reports are calling this year the most difficult it's ever been for tertiary graduates.

And it's only going to get harder. With more than 400 million people born in the country between 1990 and 2010, and the college admission rate rising, the overall number of graduates is expected to swell to no less than 150 million -- three times the size of Britain's population -- in the next two decades. That could translate into 7.5 million graduates a year from 2015 to 2035.

But economist Chen Yuyu {陳玉宇}, from Peking University’s Guanghua School of Management, says there's cause for hope. He told Xinhua that China’s continued urban push could be a job creation scheme; the key is small businesses.

China has reaped big rewards in the past 30 years as 270 million farmers have migrated to cities, ensuring an abundant supply of labor to grease the wheels of the country’s economic development. Yet Chen noted that small to medium-sized businesses -- which ought to have offered job opportunities to college graduates as they did to migrant workers -- have no idea how to make use of these younger and better-educated workers since many of these SMEs still produce low-value added goods, the traditional province of blue-collar workers.

But Chen has an idea for graduates -- go to emerging second-tier cities that hold strong promise of becoming the next economic powerhouses.

Chen maintains that cities with an urban population of one million and an average GDP growth rate of at least 10 percent over the past decade stand a high chance of becoming world-class. And the country has more than 100 urban centers over that threshold.

Chen says these cities are big enough to absorb some of the industrial exodus from the country’s major metropolises, and allow SMEs to flourish and take on more college graduates.

Job seekers willing to go against the tide to Beijing, Shanghai, Guangzhou and Shenzhen could gain first-mover advantages elsewhere like cheap housing.

Chen's top smaller-city picks include Huizhou {惠州} in Guangdong, Jiaxing {嘉興} in Zhejiang, Quanzhou {泉州} in Fujian, Zhenjiang {鎮江} in Jiangsu, Tangshan {唐山} in Hebei, Weifang {濰坊} and Zibo {淄博} in Shandong, and Luoyang {洛陽} in Henan. Many of these cities have also been named by Forbes as among the best on the mainland for business.

As a whole, SMEs in these cities have better access to loans and government incentives than their counterparts in larger urban centers. The reason is simple -- private firms are minnows in the top-notch metros, but cadres outside Beijing, Shanghai, Guangzhou and Shenzhen may still welcome SMEs and startups with open arms.

Many of the cities Chen names have their own industrial clusters, specializing in anything from home appliances to garments. This means significant scale effect and competitiveness. Major manufacturers there have the potential to grow into industrial leaders, and their demand for talent, especially college graduates, can be sustainable and robust. 

-- Contact the writer at [email protected]



EJ Insight writer