How China’s Shandong is fighting involution to win back its youth [Eye on Shandong series]
With quality jobs, lower life-costs and transparent career paths, Shandong could turn its brain drain into a comeback story. The province’s future depends on whether staying becomes the smart career move — not just the sentimental one. Shandong economics professor Yan Song explains.
Shandong province, cradling the Yellow Sea’s edge in eastern China, has long been a bastion of prosperity, its name evoking the ancient kingdoms of Qi and Lu, where Confucius once pondered the heavens.
From the misty peaks of Mount Tai to the bustling ports of Qingdao, this land of 100 million souls has woven a tapestry of agricultural bounty and industrial might, earning it the moniker “mother of China’s granary” for feeding the nation with wheat and corn. Yet even giants like Shandong face the tremors of change — demographic pressures and the restless ambitions of a youth generation eager to redefine its future.
In a nation racing toward high-quality development, can the province’s vibrant young minds elevate its already formidable economy to uncharted realms?
China’s third largest economy
Millennia ago, in the cradle of Chinese civilisation, Shandong’s fertile plains birthed early farming societies, trading silk and ceramics along the Silk Road.
Fast-forward to the 20th century: post-1949, it surged as an industrial vanguard, with coal mines in Zibo thundering and oil fields in Shengli gushing black gold.
By the reform era of 1978, Shandong had pivoted masterfully — township enterprises sprouted. Today, its GDP towers at over 9 trillion RMB (about US$1.3 trillion), ranking third nationwide, a behemoth fuelled by manufacturing (think Haier appliances and Hisense TVs), marine economies (one-fifth of China’s output) and agricultural exports that make it the world’s top garlic and peanut supplier.
The media often hails Shandong as a model of balanced growth, but locals whisper of “hidden rust” — pockets of stagnation where youth migrate to Beijing or Shanghai, leaving behind ageing villages.
When all that glitters is not gold
But beneath the sheen of success lies a subtle unease. Shandong’s GDP share has held steady, yet its growth rate cooled to 5.7% in 2024 amid national headwinds. Factories that once hummed with state-owned enterprise (SOE) glory now grapple with overcapacity in steel and chemicals.
The media often hails Shandong as a model of balanced growth, but locals whisper of “hidden rust” — pockets of stagnation where youth migrate to Beijing or Shanghai, leaving behind ageing villages.
In 2020, the number of people who migrated out of Shandong reached 4.259 million, about 4% of its total population.
As one Jinan factory veteran put it during a 2024 interview, “We built the engine, but now the fuel’s running low on innovation.”
To grasp Shandong’s pulse, consider the “bridge generation”, those born in the 1970s and 1980s, who straddled the command economy and market frenzy.
Family albums from Yantai show proud workers in the 1980s, assembling tractors in vast SOEs under the iron rice bowl — jobs for life, housing and healthcare bundled in. These folks fuelled the export boom, turning Qingdao into a gateway for Korean and Japanese capital, birthing global brands amid the 1990s WTO frenzy.
Yet as China embraced “new quality productive forces”, many found themselves sidelined.
Demographically, Shandong’s population is graying faster than the national average, with low fertility rates and pension strains looming.
The pull to first-tier cities is national, but it’s especially salient for Shandong, where a large industrial base is upgrading itself amid an ageing demographic.
SOE reforms in the 2000s shuttered inefficient plants, thrusting mid-career engineers into the gig economy or small trades.
In Zibo, once a coal kingpin, a vacant mill site now hosts a tech incubator, symbolising the pivot. “We were taught loyalty to the factory, not the market,” recalls Zhang Mei, a 55-year old former machinist now running a street-side noodle stall.
Her story echoes thousands: disrupted careers bred caution, reliance on guanxi networks, and a wariness of risk.
Youths finding opportunities
Demographically, Shandong’s population is graying faster than the national average, with low fertility rates and pension strains looming.
National youth unemployment hit 16.9% in early 2025, and in Shandong, “lying flat” — the viral ethos of minimal effort amid cutthroat competition — resonates in urban cafes, where graduates lament “involution”, the endless grind yielding diminishing returns.
... quality jobs — roles that offer training, responsibility and clear paths for advancement — so graduates see real reasons to build long-term careers at home, not just start their first job elsewhere.
Local governments have responded with talent incentives, housing support and a clear push for quality jobs — roles that offer training, responsibility and clear paths for advancement — so graduates see real reasons to build long-term careers at home, not just start their first job elsewhere. The results are uneven, but the direction is clear, and signs of success are already visible on the ground.
In Heze’s Caoxian, a Shandong-born PhD and his designer spouse traded big-city tracks for the county’s garment cluster, starting with a local government-arranged loan and a rented poverty-alleviation workshop. They pivoted to original Hanfu designs, scaled through Taobao and livestream e-commerce, and professionalised production; annual sales now run into eight figures in RMB.
Along the way, they trained village residents on sewing and order handling, added steady payroll jobs, and tapped youth credit lines to expand their range and improve fulfillment — an illustration of how county ecosystems can turn education and design skills into durable firms outside Beijing and Shanghai.
From jobs to careers: Shandong’s plan
Yet hope brews like Qingdao’s famous lager, fizzing from the veins of Shandong’s youth. Low costs and policy perks are drawing millennials and Gen Z back from megacities, infusing rust-tinged towns with startups and creativity.
The momentum among young Shandong returnees today is ultimately about creating good jobs — roles with clear progression, specialist training and real responsibility tied to R&D and export customers.
Cities like Jinan and Qingdao are building integrated advanced manufacturing and marine-tech ecosystems, enabling local employers to offer real mid-career pathways — roles like process engineers and quality leads driving production upgrades; data analysts growing into product owners; and international sales teams managing key accounts — rather than cycling through indistinct, dead-end positions.
Policy is moving in tandem: programmes now tie incentives to per-employee R&D spending, patent output and export performance, while encouraging firms to publish two-year promotion rates alongside salary bands. Paired with practical supports — youth housing near industrial parks, expanded childcare availability and transit links that connect campuses to residential areas — the package raises the expected return of staying in Shandong for a second and third job and a long-term career, not just the first.
Longer-term impact will depend on sustained wage growth and rising R&D intensity to match the career trajectories offered in Beijing and Shanghai.
At the 2024 Challenge Cup in Jinan, over 10,000 students pitched ideas — from AI-driven smart farms in Weifang to blockchain solutions for marine fisheries in Rizhao — snagging national prizes and seed funding. In Weihai, a cluster of returnee entrepreneurs has transformed old shipyards into green energy hubs, harnessing wind from the Bohai Sea to power turbines that now supply half of Shandong’s renewable energy.
At a December 2024 forum in Linyi, young social entrepreneurs unveiled solutions for climate woes — including biodegradable packaging made from peanut waste — aligning with the province’s broader green agenda: blue skies mandates, clean energy systems and marine sanctuaries spanning 240 coastal pastures.
“We’re not waiting for handouts; we’re hacking the system,” says an entrepreneur who launched a Qingdao-based app connecting rural artisans to global e-commerce markets, echoing Shandong’s 2025 blueprint for cultivating “new quality forces” through tech-driven upgrades.
Government initiatives are keeping pace. The 2025 provincial plenary pledged deeper reforms in education and talent, with 100 billion RMB committed to R&D parks in Jinan and the Yellow River Economic Belt. Youth-focused programmes — like the Shandong Innovation Voucher for under-35s — offer grants of up to 500,000 RMB to lower barriers for young innovators.
In the near term, these policies are expected to boost graduate placements and retention. Longer-term impact will depend on sustained wage growth and rising R&D intensity to match the career trajectories offered in Beijing and Shanghai.
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Challenges persist — bureaucratic hurdles stifle startups and eastern-western divides fuel inequality — but the energy is palpable.
Generating good jobs the key
What will lift Shandong out of its slump is not a new slogan but a stronger fabric of good jobs that people can grow into. That means deepening the province’s real strengths — advanced manufacturing, the marine economy and export-facing supply chains — so firms can offer roles with responsibility, training, and clear paths to promotion.
It also means lowering the “life-cost” of staying through the second and third job: rental housing near industrial parks, childcare and eldercare that make dual-career lives manageable, and reliable transit linking campuses to factory floors and R&D labs.
Finally, transparency matters. Publishing campus-by-campus first-job salaries and two-year promotion rates, and holding local employers to those benchmarks, helps graduates weigh a credible path in Jinan or Qingdao against a speculative bet in Beijing or Shanghai.
Do those three things in concert — industry depth, liveability that raises the effective wage, and clean information — and the province won’t just retain more of its own talent; it will start to win some back.
Do those three things in concert — industry depth, liveability that raises the effective wage, and clean information — and the province won’t just retain more of its own talent; it will start to win some back.
Shandong’s rise is real — but the next stretch depends on whether it can turn industrial upgrades into good jobs. If advanced manufacturing and the marine economy continue to compound — with more process engineers owning quality systems, more product teams tied to export orders and more labs integrated with factory floors — and if cities make staying easier through housing, childcare and fast links between campuses and industrial parks, then youth won’t just symbolise renewal — they’ll deliver it. Caoxian already shows the blueprint: when skills become firms and firms become ladders, staying in Shandong isn’t a consolation prize — it’s the smart bet.
