China Struggles to Keep Young Talent as Road to Post-Pandemic Recovery Proves Lengthy
Zhengzhou, located in Henan province, is a typical representation of Chinese cities characterized by towering structures of identical block-like buildings, extensive roads that traverse through densely populated areas, and LED lights illuminating the night sky.
As its cityscape resembles many others across China, Zhengzhou’s unsteady economic comeback from three years of severe isolation from the world presents a stark picture of the nation’s formidable task of regaining its place as a worldwide economic giant.
Like the rest of China, the city’s population of 10 million was severely impacted by the initial wave of the Covid-19 pandemic in early 2020, with devastating losses. A large number of deaths led to China’s rigorous zero-Covid policy, confining residents to their homes for much of the pandemic under strict lockdown measures.
As China begins to reopen, the future of Zhengzhou’s economy is uncertain. Many young people are leaving the city and businesses are struggling with low profits. The once-thriving real estate industry has come to a halt, with developers facing financial problems and buyers refusing to repay loans for unfinished houses.
Despite the generally pessimistic outlook, China is expected to push ahead with its plans to grow its economy and reestablish connections with the world. However, there is still uncertainty among the public and concerns about the lingering impact of the pandemic on the economy.
Experts believe that the Chinese government may have underestimated the severe impact of the pandemic and that future economic growth may not be as strong as before.
According to Taisu Zhang of Yale Law School, forecasting China’s economic future is challenging and it may not be as positive as hoped. Despite a projected growth rate of over 5% year-over-year, the underlying structural issues such as demographics, a housing bubble, local government debt, and low consumption, are unlikely to be resolved.
An increasingly powerful and intolerant government that silences dissenting voices is a major concern for experts, who believe it will drive foreign businesses away. Some corporations are already considering relocating their supply chains and diversifying them to mitigate the risk of relying on Chinese manufacturing.
It is uncertain whether businesses can still trust the Chinese government and profit from doing business there, making the possibility of relocating the supply chain a lack of better options rather than a desire to stay.
In the long term, China’s massive workforce that contributed to its economic success is facing a decline due to an aging and shrinking population. The strict pandemic control measures have left a lasting impact, causing many young people to lose the desire to have children. Such sentiments are common in a society where job loss and poverty are widespread. Jun Xiang is one of many who have decided not to have children due to these challenging circumstances.