The next 15 megacities #12 : The ancient capital of China is pulling out all the stops in a bid to defuse its ticking demographic timebomb

Tan Jingquan is exactly the kind of person the ancient Chinese city of Nanjing wants to attract. The 38-year-old had been searching rival cities for possible sites for his biotech startup for years – until the Nanjing government finally made him an offer he couldn’t refuse.

“I visited and explored opportunities in nearly a dozen cities,” recalls Tan, a native of Wuhan in central China. “It turned out Nanjing has the best combination of policy incentives and market potential for small startups.”

Tan’s drug research company, now operating in a suburban industrial park with a cluster of other biotech firms, enjoys local government funding of 1.5m yuan (£173,000), special low rates of office rent, tax rebates – and even salary subsidies for its employees.

With several million yuan in angel funding secured on top of the district government’s generous package, Tan is planning to double lab space next year and up his staff count from its current 10.

Q&A Where are the next 15 megacities? Show Hide By 2035 another 15 cities will have populations above 10 million, according to the latest United Nations projections, taking the total number of megacities to 48. Guardian Cities is exploring these newcomers at a crucial period in their development: from car-centric Tehran to the harsh inequalities of Luanda; from the film industry of Hyderabad to the demolition of historic buildings in Ho Chi Minh City. We'll also be in Chengdu, Dar es Salaam, Nanjing, Ahmedabad, Surat, Baghdad, Kuala Lumpur, Xi'an, Seoul, Wuhan and London. Read more from the next 15 megacities series here.

Nick Van Mead

Nanjing is rich in history, having been the national capital of six different dynasties. Sections of the 600-year-old city wall and gates still stand in the centre, but are now in the shadow of newly arrived skyscrapers and shopping malls. The 8.2 million people who currently call Nanjing home will swell above 10 million by 2025, making it China’s seventh megacity.

Nanjing’s problem is that, as it expands, its population of older residents is growing at a faster rate than ever before. Over-65s rose from 735,000 in 2010 to 953,000 in 2017, according to the city’s civil affairs bureau. At the same time, it is facing a shrinking working-age population, and the relaxation of China’s birth controls in 2013 has led to a rise in the number of young children. Overall, the percentage of people dependent on those of working age increased from 22.9% to 27.5% in the five years to 2016.

Facebook Twitter Pinterest Elderly women play mahjong in Nanjing. Photograph: Zhang Peng/LightRocket via Getty

“Nanjing has for the first time entered the phase of an ‘aged-society’, and the city’s burden of looking after both the young and the old is getting greater,” Zhao Jun, deputy director of the local statistics bureau, said last year. The burden of social support and caregiving will face “steep growth” until 2050, he warned.

Hence Nanjing’s desire to boost its population of educated under-40s such as Tan. It is not alone: last year, more than 20 Chinese cities – including fellow second-tier cities such as Chengdu, Tianjin and Xi’an – rolled out “talent programmes” offering a wide range of incentives to university-educated people under 40 who were willing to relocate.

In Nanjing’s favour is its desirable location in the Yangtze River Delta megaregion (YRD), an economic zone of cities including Shanghai and Hangzhou that the central government wants to strategically cluster by improving infrastructure and business connections. The YRD was set up in 2015 at the same time as the Pearl River Delta megaregion, which includes Shenzhen, Guangzhou and Hong Kong, and the Jing-Jin-Ji megaregion around Beijing.

The YRD is home to 80 million people (around 11% of China’s population) and contributes nearly 20% of the country’s total economic output, with an annual GDP of $1.5tn, roughly equivalent to that of Russia.

Facebook Twitter Pinterest The bullet train has cut the travel time of the 300km journey to Shanghai from five hours to a little over one hour. Photograph: VCG/Getty Images

The new infrastructure is further boosting productivity. A 350km/hour bullet train has cut the travel time of the journey to Shanghai from five hours to a shade over one hour, while a deep-water channel is being built along the Yangtze to allow 50,000-tonne ships access to Nanjing from the East China Sea.

Home to some of China’s best universities – including those in Shanghai, Hangzhou and Nanjing – the YRD is one of the country’s leading high-tech research and development hubs. Shanghai already boasts more than 400 foreign-funded R&D centres, including BMW, Dupont and Pfizer, while the presence of home-grown tech giants, such as Alibaba in Hangzhou and a Huawei research centre in Nanjing, helps make the region more attractive to the young “talent” they desperately need.

Nanjing has a target of attracting 200,000 college graduates a year, on top of a five-year plan to bring in 40 top-level startup teams from abroad and 30 foreign experts.

Last year, the city government expanded its talent programme, making it more lucrative and open to a wider range of people. Under the new scheme, the most desirable potential new residents can get a 3m yuan housing subsidy to help them relocate, while all fresh university graduates who travel to Nanjing for job interviews can claim 1,000 yuan to cover costs.

Facebook Twitter Pinterest Tan Jingquan was lured to the city by generous subsidies and tax breaks. Photograph: Jing Li

But the competition between cities is fierce. Whether these incentives can turn around Nanjing’s demographic challenge – and help the city lose its somewhat laidback reputation – remains to be seen.

Tan is considering a move back to Shanghai at some stage to develop his business, although he says he intends to keep his company headquartered in Nanjing.

“The company will remain in Nanjing, and I may also consider settling down in the city,” he says. “But we’ll see.”

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