(Yicai Global) June 30 -- Shanghai has further relaxed the permanent residency requirements for fresh master’s graduates so as to better retain talent.

Chinese students who graduate with master’s degrees from research institutions and universities in Shanghai can apply to become permanent residents in the city, the local government announced on June 28.

Shanghai began allowing fresh undergraduates from the city’s top four universities to become permanent residents in September 2020.

“Many more high school students applied for our university after Shanghai issued the settlement policy in September 2020,” Zeng Gang, director of the Institute of Urban Development at East China Normal University, told Yicai Global. “A number of students also called to inquire this year, with entrance grades likely to be even higher than before.”

Shanghai will have 227,000 college graduates this year, up by 20,000 from last year, the largest increase in the past five years, according to official data.

The effects of easier permanent residency in the city are always noticeable, Zeng said, adding that despite having many restrictions, Shanghai has always been attractive to talent.

“If a city can attract talent, its economy won’t decline,” Zeng said. When the risk of economic downturn increases, the demand and competition for talent between cities will intensify, so looser policies in various regions will remain the trend, he noted.

Earlier this month Shanghai also started to allow Chinese graduates from the world’s top 50 universities to apply to become permanent residents if they work full-time in the city, while graduates from universities with global rankings from 51 to 100 to apply to do the same after six months of social security contributions.

The move was part of the city's efforts to spur its economy after months of battling Covid-19.

Shanghai’s eased policy will create conditions for the release of the demographic dividend and lead to rapid growth in housing demand, said Yan Yuejin, research director of the think tank under E-house China Research and Development Institute.

As Shanghai’s poverty market is at the bottom, new permanent residents will spur house buying, especially as purchase restrictions are not yet clearly eased, Yan noted.

Editor: Futura Costaglione