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    Categories: Macro

China’s Second-tier Cities on the Verge of Peak Population Growth

A new report indicates that many Chinese cities are about to undergo peak population expansion, as established urban centres start to see easing or even negative growth.

More and more Chinese cities are relaxing their residential permit or hukou restrictions in 2018, as well as launching policies to compete for human capital by providing various subsidies to talent individuals.

As a result analysts expect some Chinese cities to soon pass through a period of peak growth in their permanent or registered populations, as others see levels ease or even decline.

A report from the 21st Century Economic Research Institute (21世纪经济研究院) looked at changes in the registered populations of total of 8 first and second-tier Chinese cities, including Beijing, Shanghai, Hangzhou, Wuchan, Changsha, Chengdu, Nanjin and Xi’an,

According to the report both Beijing and Shanghai have seen easing and even negative growth in their permanent populations over the past five years.

Across the three years from 2014 to 2016, for example, Beijing’s permanent population grew by 367,000, 189,000 and 240,000, before posting negative growth for the first time in 2017, with a decline of 22,000 people compared to the previous year.

Growth in Beijing’s registered population has followed a similar pattern, rising by 171,000, 118,000 and 177,000 across the three years from 2014 to 2016, before seeing a decline of 37,000 in 2017, to 13.592 million in total.

Shanghai has also seen easing or negative population growth in recent years, with a decline in permanent residents of 104,000 in 2015 and 13,700 in 2017, with only a modest increase of 24,000 in 2016.

During the four years from 2014 to 2017 Shanghai saw steady and slight growth in its registered population, of 41,200, 43,600, 58,800 and 61,500.

According to analysts this trend is consistent with many first-tier Chinese cities reaching saturation point, and unveiling population control measures in response.

In sharp contrast China’s second-tier cities are seeing explosive growth in their registered populations as they unveil a slew of measures to compete for the best domestic talent in the form of preferential housing or employment policies.

Data from the Hubei province capital of Wuhan indicates that it saw growth in its registered population of 19,600 and 45,700 in 2015 and 2016 respectively, before posting growth of 198,100 in 2017, for a year-on-year rise of 2.3%, or 11.5 times the growth rate of 0.2% just two years previously.

The Zhejiang province capital of Hangzhou unveiled policies to attract human capital in 2015 and 2016, targeting areas including housing, education, social welfare, venture capital investment, finance and medical treatment.

The policies appeared to have paid off in terms of growth in its skilled and educated populace, with the Hangzhou 2018 Government Work Report indicating that the city attracted 79,300 tertiary graduates last year, of which those with post-graduate qualifications numbered 10,000, for an increase of 20.9%.