The Chinese economy’s transformation reshuffles some of the cards, with cities that remain on old development models “watching the train pass,” while others grasp modernity. Faced with the widening gap between North and South and East and West, one region breaks the categories and stands out from the crowd: the urban pole of Chengdu-Chongqing.
The Meituan Group’s research center, in a study on “new industries and professions within the life services sector,” ranks the top thirty cities between three levels: 1. the first level 2. high-potential group 3. Cities with potential. Sichuan’s capital, Chengdu, and Chongqing have broken the usual classifications by moving to the forefront with the top tier cities, Beijing, Shanghai, Shenzhen, and Guangzhou.
Meituan specializes in online sales related to the restaurant industry. The term “life services industry 生活服务业” includes services related to food, restaurants, housing, beauty care, aesthetic medicine, hairdressing, wellness, repairs, apartment management, recycling, photography, personal styling. What are the new occupations in this industry?
Chengdu and Chongqing at the forefront?
A city’s ability to be a leader in new trends is inevitably linked to a dynamic economy and an open environment. Moreover, Chengdu and Chongqing also display unique competitiveness, the former being nicknamed the capital of cosmetic medicine. The life service industry has formed a group of new initiatives. The epidemic has accelerated the penetration of digitization in life services, such as take-out, group purchasing, flash sales, online car booking, and other services to form a “new digital infrastructure” serving residents’ lives.
Chengdu and Chongqing residents have always been more adventurous consumers, and they are looking for new experiences in food, drink, and entertainment. The market felt the wind, capital, and talent quickly flowed in, and service became the main battleground. New business formats began to emerge.
The attraction of the region
Chengdu and Chongqing are ranked third and fifth in China regarding the number of employees in new occupations in the life services sector. The Chengdu-Chongqing cluster, thanks to targeted measures and a suitable living environment, has attracted a large number of young employees. Over the past five years, Chengdu and Chongqing have recorded a positive net migration of nearly 500,000 people each year. It is no coincidence that Chengdu and Chongqing are in the lead.
China’s GDP per capita must exceed the $10,000 threshold to avoid falling into the middle-income trap. The first trend is to replace dependence on investment and resources by relying on consumption and scientific and technological innovation; the second is to keep up with the wave of digital transformation and seize new momentum. The second is to embrace the wave of digital transformation and take new momentum. The epidemic has brought about revolutionary changes in the consumer services sector: online retailing, online education, and online entertainment are growing rapidly. New models, such as contactless services, are emerging, showing remarkable economic resilience.
Policymakers have realized that the service industry should rely on digital platforms. In the last two months, the central government has issued two documents on accelerating society’s digitization and support.
Chengdu-Chongqing has a prominent place. As part of the development of West 2.0, they are at the heart of the national strategy to promote Chinese cities’ fourth circle. Within the framework of the dual-cycle process, local and international, the two cities are the few cities in the interior that record a takeoff of its economy.
The new forerunner of urban competition
Among the cities in the new format, Chengdu and Chongqing are typical examples of experience-based cities.
Another category is the cities of new technology-based industries. Shenzhen, the city of the digital economy, is the technological innovation capital of China. These two types of cities have one thing in common: they are more attractive to new professionals. Shenzhen ranks third on the list, second in terms of the number of new employees. Competition between cities for new professions is bound to intensify.
Most new jobs are created through a combination of the Internet and offline. On the Meituan platform alone, there are more than 70 types of new professions. During the epidemic, the “neighborhood group purchasing manager” came into being. The niches generate rare jobs: takagist decorator (live game), traditional Chinese style costume designer, wildlife photographer, digital operations manager, meal planner in theme restaurants, adviser and salesman of country products, organizer for tailor-made business or tourist trips.
The new professions require essential digital skills. Staff in the sector are better educated and have higher incomes than in the last decade. 26.7% of Meituan’s merchants have a bachelor’s degree or higher, 40.7% have a monthly income of more than 9,000 yuan (US$1,350), and 24.7% have a monthly income of more than 12,000 yuan (US$1,350).
With the development of new industries and new professions in service to local life, Meituan’s data is quite convincing. For example, in the first half of 2020, the number of delivery personnel on the Meituan platform reached 2,952,000, a 16.4% year-on-year increase, which is very important for stability and employment.
In 2019, the life services industry’s transaction volume on the platform reached 483.74 billion yuan. From 2016 to 2019, the transaction volume grew at an average annual growth rate of 55.1%.
Training needs to improve
Today, vocational schools’ training system is often lagging behind market developments, and the slow updating of teaching materials and equipment is penalizing. Macroeconomic monitoring is also necessary to adapt to changes. For example, it is essential to speed up recognizing new professions to encourage the renewal of vocational school courses and increase practitioners’ training of new occupations.
Thanks to digital technology, the life service industry is gradually breathing new vitality into the Chinese economy by forming a more efficient industrial chain. Changes have already begun to appear. Chongqing and Chengdu have taken the lead.
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17 October 2020