Hokou is nothing to sneeze at! Considering talent mobility in China

The fourth edition of Maxxelli's "China International City Index" or CICI is out and provides some interesting insights for many of us involved in getting talent into strategic locations across China. The report features details on 29 different cities, looks at 44 different key indicators across seven categories and considers the degree of internationalization of China's emerging second-tier cities.  

Per Maxxelli, "If the 2015 CICI was a test run for an idea, then the 2016 CICI was the answer – finally, a way to compare China’s international development across multiple cities and industries through data analysis, not opinion, but by hard facts and data analysis." For a long time, China has boasted double digit GDP growth rates, but that has stagnated. However, second-tier cities are still growing at double digit growth rates.

The cities indexed in this year’s CICI are 

• Changchun
• Changsha
• Chengdu
• Chongqing
• Dalian
• Fuzhou
• Guangzhou
• Hangzhou
• Harbin
• Hefei
• Jinan
• Kunming
• Liuzhou
• Nanjing
• Ningbo
• Qingdao
• Shenyang
• Shenzhen
• Shijiazhuang
• Suzhou
• Tianjin
• Urumqi
• Wuhan
• Wuxi
• Zhengzhou
• Zhuhai
• Xi’an
• Xiamen 

While many consider Guangzhou and Shenzhen as first-tier cities, for this benchmark they were rated as second-tier cities that are emerging as first-tier. 

Many of the details from the report were shared in a very engaging Worldwide ERC® webinar recently (May 24) called "The China Experience - By The Numbers." Here are a few highlights from that webinar provided by Plus's Consulting team:

China overview

• In five years, China is set to become the biggest country for job expansion
• The Chinese job market is shifting away from manufacturing and toward a service-based economy
• Domestic wages are increasing due to a shrinking (aging) labor force
• Chengdu secures its third place in this edition’s rankings and can now surely be considered an emerging first-tier city.
• GDP per capita trends indicate second-tier cities are narrowing the gap between China’s established first-tier cities

Relocating employees:

• It is common for both expats and local transfers to work in one city while their family lives in another (more developed location). Transfers to second- and third-tier cities should anticipate this possibility.
• The Hokou system (national registration linked to a place of origin) can limit domestic transferees ability to enroll their children in school in another city. The Hokou system also limits the domestic Chinese transferees ability to purchase property outside of their home region. This may lead to more 'commuter' situations for intra-country moves.
• Mobility support for intra-China moves is relatively new. The majority of relocation benefits are managed in-house, with only a few pieces outsourced.
• Some companies are offering pollution allowances. 
• Hardship allowances are becoming less common throughout the country (uncommon in Shanghai and Beijing).

For mobility programs considering moving talent to or within China, consider one of our other great pieces of content:

1. China domestic mobility policies 
2. The fapiao is your friend
3. China immigration seeking to attract highly-skilled workers
4. Shanghai makes residency easier for foreign expats
5. Managing the cultural differences in China