globalization Work in China

China Wants You

By: M.E. Strickland August 2, 2018 6:13 am

Nevermind Uncle Sam. China wants you: “With our country’s door to the world opening even wider, we will produce more appealing policies to attract foreign talents to work in China.” That was Premier Li Keqiang, speaking at the start of this year. It wasn’t a one-off statement, either. He and other members of the Chinese leadership have talked up the need and desirability of importing foreign professionals a number of times in recent years. The idea that China should roll out the welcome mat for foreign workers is now enshrined into formal policy, with specific programs in place to entice foreign experts and professionals to move to China for work. And all of it with the express purpose of aiding the country’s innovation economy.

The question, of course, is: will it actually work?

Fresh Blood

For all the rancor over immigration that seems to have bubbled up in the United States and Europe of late, it would be easy to believe that there’s little appetite for international migration left in the world. But public discourse isn’t always a faithful reflection of popular sentiment.

In the US, Americans themselves might be surprised to know that a record high of 75% of people now say that immigration is a positive force for the country. Meanwhile, under President Macron, France has instituted new policies to try to attract foreign researchers to move there. In the UK, even in the wake of Brexit and hardened attitudes towards the EU among many, there has been a 14 point rise over the past five years in people saying that immigrants are good for the economy. And in Japan, where there has long been a widespread aversion to immigration, there seems to be a halting acceptance that immigration may be necessary for an aged and aging country with a rapidly dwindling population.

These are all fragmentary glimpses of two intertwined global trends that speak to the often overlooked value of immigration.

As places like Silicon Valley well know, there has been a partially globalized job market for decades. At least for those working in certain professions, especially research, tech, and engineering fields, competition and opportunities for jobs can span continents. And for businesses there are plenty of reasons to be open to international recruitment. Obviously, it widens the pool of candidates as far as it can go, and foreign workers may bring with them skills, knowledge of other markets, and connections that domestic hires don’t have. A somewhat fuzzier yet still very real benefit is that they may infuse an organization with more diverse viewpoints and ideas, contributing to greater innovation and creativity.

Secondly, ongoing demographic changes are forcing a rethink about the practical benefits of immigration for destination countries. Across the world, developed economies almost as a rule have seen their populations aging and fertility rates dropping below replacement level, with the result that their labor populations are being squeezed ever further. Thus, some in policymaking circles here and there have finally started to warm up to what research has long shown: that immigrants are real economic assets.

These two factors—the benefits that immigrant workers bring for business and innovation and the gaps they can fill in yawning labor markets—mean that they are worth competing for. And it is in this context that China’s policies towards “foreign talent” need to be understood.

For the time being, the second factor of labor force contraction is less relevant in China's case, though that is set to change eventually. Shifts in China's basic demography and age structure are following the same arc as Japan, Germany, and other advanced economies—they just aren't so far along yet. The working age population started contracting in 2012, and there is reason to anticipate that by the middle of the century younger workers will be weighed down by the need to support a larger ratio of older people. Yet thus far there’s been very little talk in China about drawing in immigrants to take up the economic slack.

Instead, when officialdom talks up the possibility of bringing in foreign workers, it's in winningly positive terms. Foreign talent is spoken of as a requisite for an innovation economy. Policy measures have followed accordingly. A “green card” system for permanent residency, though introduced only in 2004, has seen some revamps in the last few years with the express purpose of widening eligibility to more people. In 2008 the government launched the so-called Thousand Talents Plan, which seeks to entice star researchers and professionals to move to China with promises of hefty pay, grants, and titles (along with more favorable visa terms than are available to other workers). There are moves at the provincial level as well, with the island province of Hainan indicating that it might welcome foreign nationals as it seeks to pull in a million new residents. And Shanghai has even gone so far as to declare a specific target for increasing its international population, all in the name of remaking itself into a more fully cosmopolitan city. On the surface, at least, these things suggest a more generally positive attitude towards immigration than is to be currently found in many other countries.

In short, China has grasped that immigration has a role to play in advancing its economy, and its technology and research industries in particular. Programs have been launched, and some credible progress has been made. But digging past the surface, it’s clear that the domestic tech industry still faces an uphill fight before it can truly rival Silicon Valley for cosmopolitanism.

Starting on the Back Foot

However much goodwill there may be for foreign talent, the reality is that by both relative and absolute measures China’s population of foreign born people is miniscule. For the US, those born in another country contribute to a little over 14% of the population. For Japan, the figure is just short of 2%. For India—dense, already populous, and less developed—international migrants are a tiny 0.4%. But for China? A mere 0.07%, putting it dead last among the world’s nations, behind even Cuba and North Korea.

The 2010 China census found only 593,832 foreign nationals living in China at the time. Perhaps that was an undercount and some were missed, but the census also set a rather low bar for who was included as a foreign resident, counting anyone who was staying in the country for three months or longer.

More optimistic UN estimates from last year suggest that there are just shy of a million international migrants in China, but about 30% of that figure is made up of people from Hong Kong and Macau (confusingly, the Chinese government’s own data tends to count Hong Kong and Macau residents alongside foreign nationals, despite also being viewed as Chinese citizens). Incidentally, the UN figures also reveal that the makeup of China’s international migrant population isn’t what many might assume. As of last year, the UN estimates that South Koreans made up the largest group of foreign nationals by far, at about 191,000, distantly followed by people from Brazil, the Philippines, and Indonesia. US nationals, at a relatively small 27,000 people, came in at a remote fifth place.

All the same, there does seem to be a sincere interest in trying to grow the international population, at least in some quarters. Shanghai, for instance, says it wants to reach a local population of 800,000 foreign residents by 2035, up from only about 170,000 currently (incidentally making it the first place in China, and one of only a few in the world, with a goal of increasing its international migrant population). Of course, that's a total; official data indicates only about 86,000 of the current foreign born population are actually working in the city, the rest being students or family. But even the target of 800,000 is fairly modest, given that Shanghai’s current population, including suburban areas, ranks at a mega-city level 24 million. New York City, by contrast, currently has over 3.3 million foreign born residents in an official metropolitan population of just about 8 million. In other words, almost 20 times the number of foreign born residents in an overall population a third of the size.


Progress has thus been slow. Since 2010, the UN estimates that the number of foreign nationals in China has grown by about 17.8%. But in starting from such a low base, such a growth rate is actually not that difficult to achieve. If anything, it could be expected to be higher, considering the way China’s economy and tech sector have boomed over the last decade.

It’s not as if there’s a lack of interest from foreign workers. A recent Boston Consulting Group survey of workers in 197 countries found that China has been moving up in the rankings as a desirable destination for those willing to relocate to another country, jumping from 29th to 20th over the last four years.

Of course, getting people to China is one problem. Getting them to stay is another. Given the incompleteness of the data available, it’s hard to say how long people really stay in China once they move there, but there have been repeated claims of foreign nationals abandoning China in large, if unverifiable, numbers. For instance, a relocations service company reported in 2015 that it was seeing twice as many people exiting China as entering. As their clientele isn't a representative sample, though, it's hard to evaluate the significance of a data point like that. But the fact that China's foreign born population remains so small suggests that there could be a great deal of churn, offsetting gains from new arrivals.

But for the moment the crucial questions are whether or not an interest stated on a survey will translate into action, with foreign workers actually taking the plunge and moving to China, and whether or not China’s economy and visa system will really accommodate them.

As to the first question, it's true that some may be put off by China’s reputation for problems such as air pollution or food safety scandals, problems that are regularly cited by professionals who leave China. But those can be put aside; if someone has already expressed a willingness to relocate to China for work, they have presumably decided that they can live with such things. Instead, it is the second question which may be more of an issue: even with goodwill from on high, and policies designed to attract foreign talent, is the existing system actually well-tuned for the purpose of drawing in people from abroad?

Terms and Conditions May Apply

That officials are actively endorsing the recruitment of foreign talent is no small thing, but actual implementation doesn't always keep pace with rhetoric. Despite all the reforms that have been made to the visa system in the last few years, it can still be a burden for those who wish to work in the country. Most work visas in China (or residency permits, as they are technically called) are only good for one year, demanding that foreign workers go through a laborious process every year to have them renewed if they want to stay in the country. While that is usually possible to do, it adds a weighty overhead cost to both foreign workers and their employers, and can introduce an element of instability and uncertainty into foreign workers’ lives.

For those hoping to secure a more lasting residency, the possibilities are extremely limited. China’s permanent residency program has operated at a trickle since it formally began issuing green cards in 2004, averaging no more than a few hundred per year. However, there are signs that it is ramping up in scale. According to the Center for China and Globalization, a Beijing-based think tank, 1,881 foreign nationals in China were granted residency from April 2 to June 2—still a small number compared to most other countries, but on par with the total for all of last year, indicating a steep acceleration in approvals.

And yet, even now the eligibility requirements set a threshold so high that only a very few can pass over it. For years, unless you married a Chinese national, were willing to plow some sizable sums into local investment, or were Stephon Marbury, then the only feasible route to a green card was to work as an executive in a major firm for several years. Some jurisdictions have recently moved to simplify those requirements, but they can still be quite high. Shanghai requires applicants to show an annual income of at least 600,000 RMB, for instance, while the cutoff in Guangdong is 400,000 RMB. Those income requirements might be easy enough to meet for tech workers in Silicon Valley, but in Shanghai and Shenzhen still only elite workers are likely to make those pay grades.

Yet a select few might be able to bypass all that. In 2008, the government established the Thousand Talents series of programs, intended to attract highly regarded professionals in business and academia to China. The programs have gotten quite a bit of press attention, and the decamping of some higher-profile academics for China has certainly begun to worry some policymakers in the US. 

The benefits packages can be lavish compared to what some may be used to in their home countries. In the main program, for instance, recipients start off with one million yuan grants, along with various living benefits and possible additional research grants. Some of the benefits, like guaranteed school admission for awardees' children and the right to settle anywhere they wish in China rather than being relegated to one jurisdiction, might not seem like much, but are not generally available to other foreign workers. Still, the eligibility requirements here are, as expected, set very high. In the main program, candidates must be either full professors in foreign academic institutions or hold some senior position in a suitably presitigious international firm. Other programs specifically targeted at young entrepreneurs or researchers also stipulate a certain level of experience and distinction.

But there are some important qualifications to make here. First, the main programs have so far only attracted about 6,000-7,000 people in total. Even Shanghai, as of the start of 2016, could only count just under 1,500 people across various Thousand Talents programs, while there were over 4,900 businesses started by foreign workers and 2,787 foreign students joining the localized Shanghai-Pujiang Talent Program. That is laudable, but consider that 57% of college-educated STEM workers in Silicon Valley are foreign born, while in New York it’s 43%. 

Second, in judging these numbers it's important to remember that the Thousand Talents programs aren’t just for foreign nationals. In fact, most of the awardees are actually Chinese citizens who had previously moved abroad and have since been drawn back. The reverse flow of Chinese professionals, and particularly those from Silicon Valley, is an important trend in its own right, but it’s still separate from the problem of drawing in foreign workers. Thus, while the Thousand Talents programs do attract attention, they have yet to really start pulling significant numbers of people.

Still A Ways to Go

China does seem to recognize the value in immigration, at least in principle, and groundwork has been laid to attract overseas professionals and researchers. But if international talent is ever to make a substantial contribution to China’s tech inudstry and economy, and if innovation hubs like Beijing, Shanghai, and other cities are serious in their efforts to build up their international workforces, then current policy initiatives simply may not be enough.

China's population of foreign born people is minute, and will need to grow many times over to even begin to compare to the enriched and cosmopolitan workforces found in most other developed economies. There are a number of programs that have been put in place to help that cause, and visa and green card rules have been revised, but it is safe to say that more could still be done to streamline the processes.

But there may be a less visible problem buried in the assumptions that underwrite the existing policies. From the ordinary worker visa system to the green card system to the Thousand Talents programs, current policies set high barriers for qualification and recruitment. Even qualifying for a standard work visa often requires a certain minimum of education and work experience, and yet it doesn't offer any guarantee of being able to reside in the country beyond a short term.

On the face of it, the reasoning is sound: China wants the best people, and so the criteria are correspondingly high. But while being already well-established in one’s field may be a proof of talent, not all talent comes with a stellar resume already attached. It's a cliche, but some of Silicon Valley's own biggest names were college dropouts before they were industry leaders, or they were children of immigrants who themselves might not have passed a screening process built around merits and credentials.

The current policies on international talent take no risks, and offer little, if anything, for those who haven’t yet been able to make their mark. Bright, bold, and restless upstarts will have to look elsewhere. And that is a problem, because once professionals or entrepreneurs establish themselves in one locale, it will likely take vastly greater efforts to draw them to China. Though there may be a certain natural appeal to focusing on the cream of the crop, doing so effectively guarantees that China’s pool of international talent will remain constricted, and costlier to recruit.

China has clearly accepted the value of bringing in international talent, and has made it official policy to attract talented professionals of all stripes to the country to help build an economy led by innovation. That shouldn't be overlooked, particularly now. China is starting from a very low base, recruitment policies remain fairly narrow in scope, and the country's tech hubs have a lot of catching up to do if they are to match even a fraction of the international representation that places like Silicon Valley or Singapore already possess. If the goal is to create a sustainable and productive workforce of international talent, then much more will need to be done.




(Image credit: Andy Beales; a traveler at Shenzhen Airport)


globalization Work in China