Full coverage: 2016 Central Economic Work Conference

At the annual economic session, one of the issues Chinese decision-makers will be addressing is the vicious circle in the country’s worst performing region, where much of the young talent is leaving because opportunities are few and far between.

Post-graduates from a top university in China’s northeast—with a major in information science and engineering—Gao Liang and Tao Qingnan, are heading in different directions: Liang will remain at the local scientific institute; Qingnan is leaving for China’s silicon valley—Shenzhen.

“I think the pressure in first-tier cities is too much to handle: house prices, household registration, the fierce competition. I would rather settle down here,” Gao said.

“Bluntly speaking, I must say companies in southern China are more professional, they walk me through the recruitment processes, and then guide me on the right career path,” Tao said.

Tao Qingnan is not the only one in the northeast who thinks this way. In fact, the mass exodus of young people is threatening to dry the talent pool from a region that the central government is trying to revitalize.

Hundreds of thousands of people have abandoned China’s northeast in the last 15 years. Many of them are well-educated high earners who are looking for better jobs and lifestyles elsewhere. This brain drain is driven by market rules, and not because of a lack of talent retention.

High-tech firms is in an industry that relies heavily on young talent to survive and thrive. But they explained how difficult it is to recruit the kind of skilled workers they require.

“In recent campus recruitment drives, we’ve received lots of CVs, but then nobody turned up at the interviews,” said Han Xu, director, Yuanda Corporation.

“We later found out the candidates were worried about the lack of ‘cluster’ effect, as the high-tech industry in this region makes up a small proportion of the nation as a whole.”

According to Xinhua news agency, the negative sentiment surrounding the regional economy has spooked local students, to the point where graduates returning to the region for work has dipped by 20 percent.

“If we were recruiting for one particular senior position, we have to offer two to three times the salary our competitors in southern China would pay. And this has become a vicious circle for us: our overall budget goes up, and our products lose their competitiveness,” Han said.

Devising solutions to this vicious circle is a pertinent issue for the country’s policymakers have to address. The latest top-down efforts to reform inefficient State-owned enterprises and move toward a more service-based economy can succeed in the long run—but for now, young people are still voting with their feet.