Tuesday, August 10, 2010

China Struggles to Plug Brain Drain as Best and Brightest Head for the Door

A popular Internet writer recently caused a stir when he asserted that “all Chinese who earn more than 120,000 yuan [$17,700] a year want to emigrate.” While this view is exaggerated, there is no denying the upsurge in Chinese emigration to Western countries — particularly the United States, Canada and Australia — since the mid-2000s. Most worrying for the Chinese Communist Party leadership is the fact that despite widespread publicity given to the supposed viability of the “China model,” an increasing number of its elite are choosing to flee.

China became the biggest emigrant nation in 2007. According to the official Chinese media, 65,000 Chinese last year secured immigration or permanent resident status in the United States, 25,000 in Canada and 15,000 in Australia.

Only Mexicans acquired more green cards than Chinese in the United States in 2009.

Particularly in the area of investment-related immigration to major Western countries, Chinese are tipped to become the largest cohort within the next few years.

Despite the downturn in Western economies in the wake of the financial crisis, more Chinese students are expected to stay on after getting degrees and professional qualifications.

Among the 270,000 Chinese who are going to foreign universities as self-paying students this year, only 25 percent are projected to return home upon graduation.

Then there are middle-class and affluent Chinese who take advantage of liberalized travel regulations to give birth to children in the United States and other Western countries.

It is little wonder that, according to the Overseas Affairs Office of the State Council, there are more than 45 million overseas Chinese worldwide.

Emigration to the West started not long after Deng Xiaoping inaugurated the reform era in 1978. Deng’s second son, Deng Zhifang, who gained a Ph.D. in physics from Rochester University in New York and subsequently became a wealthy businessman in China, was among the first members of the Chinese elite to settle in the United States.

Emigration picked up speed by the mid-1990s, even as coastal China boomed.

Prominent members of this first wave of emigrants were corrupt officials who found it safer to park their loot in the West.

Their modus operandi was sending spouses and children overseas before slipping away themselves.

By the end of 2009, an estimated 4,000 corruption-tainted cadres had gone abroad, according to local press reports.

Owing to China’s opaque business and tax laws, most private entrepreneurs deem it prudent to transfer a good part of their fortunes to Western countries through legal investor immigration schemes.

The trend has intensified despite the passage in 2007 of the landmark Property Rights Law, which guarantees the inviolability of private property.

A recent investigation by the official Hangzhou Daily noted that around 1,500 businessmen from coastal Zhejiang province emigrated to the West every year — and the numbers were expected to rise.

In the past decade, the newspaper reported, emigrants from Zhejiang had taken at least 60 billion yuan of assets overseas.

These “red capitalists” have cited the “hate the rich” mentality in China as an important reason for emigration.

Partly owing to the growing gap between the poor and rich, nouveau-riche businessmen often become targets of crimes including kidnap and murder.

Yet the largest group of emigrants consists of professionals and experts with a middle-class background who, according to immigration consultant Qi Lisun, outnumber entrepreneurs by a large margin.

The official Chinese media concedes professionals, and to some extent businessmen, are leaving due to dissatisfaction with Chinese politics and society.

In other words, as a result of China not recognizing global norms such as civil and democratic rights, many of its best-trained, most qualified citizens are voting with their feet by settling in the West.

Nie Xiaoyang, deputy chief editor of the popular Globe magazine, said emigrants destined for the United States were not just after a higher standard of living.

“A very important point is the tolerance and energy of American society,” Nie said. “Its multifaceted cultural environment can give people more confidence.”

Partly to counter the brain drain, the State Council last month unveiled “The Mid- to Long-term National Plan for the Development of Talents,” which covers from 2010-2020.

Beijing’s goal is that by the year 2020, “China will have entered into the front ranks of countries with superior human resources.”

According to the director of the CCP Organization Department, Li Yuanchao, “human resources constitute the core competitiveness in scientific development.”

Li, who is also a politburo member, pointed out that party and state authorities “will not waver in embarking on the road of [turning China into] a country with outstanding talents.”

In January 2009, Beijing launched the “Thousand Talents Program” to lure accomplished Chinese back from overseas. Li said recently that “China is going through the third wave of talent returning to the motherland.”

He said the first wave, which included the “Father of the Republic,” Sun Yat-sen, and former premier Zhou Enlai, came back to overthrow feudalism.

The second wave was a reference to patriotic scientists who left high-paying jobs in the United States and Europe in the 1950s. “

The third wave is taking place now,” Li said, adding that more foreign-based Chinese than ever were eager to contribute to the modernization enterprise.

Statistics, however, do not seem to support Li’s claims. As of May this year, central-government units had attracted only 600-odd high-caliber experts and entrepreneurs under the “Thousand Talents Program.”

Moreover, most of these prized returnees were businessmen, and many chose to hang on to their overseas passports and green cards.

One basic reason behind this less-than-successful effort could be the glass ceiling that exists within the party and government.

Without a record of accomplishment in political reliability and service to the CCP, it is difficult for the expert returnees to be given major responsibilities.

In a Xinhua news agency article that ran in July entitled “The United States is ‘co-opting’ elites from around the world,” author Ran Wei saluted American soft power, particularly the country’s ability to attract gifted personnel from different countries.

Apart from the allure of high-caliber universities and cutting-edge high-tech firms, Ran cited institutions and systems that “encourage gifted people to achieve breakthroughs.

America puts a lot of stress on the rational use of human resources and on retaining outstanding personnel,” Ran wrote. “Much emphasis is put on the free flow of talents and the abolition of restrictions and discrimination.”

It is significant that in its policies regarding retaining and luring talents back home, Chinese authorities appear to have given top priority to such tangibles as salaries, promotion prospects and seed money for starting new ventures.

Yet until the CCP leadership is willing to pay more attention to intangibles, particularly modernizing and democratizing sociopolitical institutions, the wave of emigration is likely to continue, even as China narrows its gap with the United States in terms of conventional yardsticks such as GDP and military might.

Jamestown Foundation

Willy Lam is a veteran China correspondent.

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