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Story Publication logo October 21, 2012

Reverse Brain Drain: China Engineers Incentives for “Brain Gain”


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Traditional exporters of migrants have become importers, turning the old paradigm on its head. The...

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Sophie Ye Tao, who made her fortune as a hedge fund manager in New York, says she has returned to China in order to understand her home country better before strking off in a new business direction. Image by Peter Ford. China, 2012.

Nowhere in the world has a government taken the task of tempting exiled talent to return home as seriously as in China.

That goal has been enshrined as a major national policy; the authorities see it as a key shortcut to putting China at the cutting edge of technology and boosting the country to the next level of economic development.

"The leadership is very, very aggressive on this – very proactive," says David Zweig, a professor at Hong Kong University of Science and Technology who is writing a book about Chinese returnees. "The Chinese government has been the most assertive government in the world in introducing policies targeted at triggering a reverse brain drain."

Beijing has a lot to work with. China is the world's largest source of overseas students – 14 percent of the global total, according to the Center for China and Globalization, a Beijing think tank that advises the government on talent recruitment. In the United States, 22 percent of foreign students come from China.

More than 1.5 million Chinese have left their homeland to study since Deng Xiaoping began encouraging them to do so in 1978; for many years, few of them returned. Now the tide is turning, according to Ministry of Education figures: Last year, 186,000 came back, nearly 40 percent more than in 2010.

Their reasons vary, but one stands out: China's economic boom makes the country a very attractive place to anyone seeking to build a future.

Steven Bai, for example, stayed on to work for two years after finishing his master's in information technology in Australia. "I had a small job in a small company," says Mr. Bai, sipping a latte in a Beijing Starbucks one recent Saturday morning. He returned home to China last November and signed on with Lenovo. "Now I have a good job in a big company," he says happily. "The career opportunities are much better here."

Luring 'sea turtles' home

"Returnees" are not a new phenomenon in China; Mao Zedong was the only member of the first Communist Party Central Political Committee to rule China in 1949 who had not studied or worked abroad. Those who come back even have a nickname, "sea turtles," a play on the Chinese words for "returnee."

But since 2008, when it launched its "1,000 Talents Plan," the government has attached particular importance to persuading Chinese citizens to put their foreign training and experience to the service of their homeland.

Attracting China's overseas talent was "absolutely necessary" if China were to "raise its global competitiveness" and become "an innovative society," the plan declared.

The plan offered top scientists and high-tech entrepreneurs $150,000 in cash, free office or lab space, housing allowances, and fast tracks into good schools for their children. It spawned dozens of similar incentive schemes around the country that "have really geared up the momentum," says Wang Huiyao, head of the Center for China and Globalization. As many as 15,000 top talents have come back to take advantage of these benefits, he estimates.

One they have hooked – but it took two tries – is Han Jie.

Mr. Han was first recruited from his job at NASA in 2005, to head China's fledgling national nanotechnology laboratory in Shanghai. He lasted just one year, stifled by the official red tape and political interference from above that Mr. Zweig says scares away most of the best Chinese expatriate scientists.

"I had so many fathers and mothers all telling me different things," Han recalls of those trying to control him. "I could not decide anything." So he went back to America.

He was tempted to return four years later to Wuxi, a high-tech hot spot a couple of hours' drive inland from Shanghai whose incentive plans have put it at the forefront of China's overseas talent recruitment drive.

The city government's sweeteners helped convince him to start his new business there, manufacturing and selling medical diagnostic tools, says Han. But the real reason he came back to China was because "I saw a chance to combine a technology I knew about from America with the huge market opportunity in China."

The money, the housing, and the free office space were nice gestures, Han says, but the most useful thing the local government has given him is its support. "Their green light …has been really helpful in getting all sorts of permits," he explains. "After 20 years outside China I don't always know how things work. I need help."

Still, China is more familiar, and he feels more confident setting up a business here, Han says. "To be a good CEO you have to know the marketplace well. It is not easy for a Chinese to handle the market in the US. So I moved back to China."

China becomes 'next step' on career ladders

It was her search for a better understanding of the country she came from that brought Sophie Tao, a demure, 30-something financier, back home last year. She had made a fortune as a fund manager in New York, she says; now she wants to figure out "my next step."

"It would be much easier" to live in the US, Ms. Tao concedes. "The air is cleaner. It's safer. The service is better. The political system is better. The water is better, and the food is safer. It's less hassle. But now … I have to learn more about China, and I can only do that if I am based in China," she says.

Apart from anything else, she points out, "China is one of the few bright spots" in the world economy. "For a Chinese person looking for career and life opportunities," she says, "China is the best place to be."

That is especially true for returnees who can interest Chinese companies in their language skills and familiarity with foreign ways.

"I had no outstanding advantage competing [for a job] against locals in Australia," says Chris Zhang, who shared an apartment in Sydney with his friend Steven Bai before coming back to work in the finance department of a state-owned enterprise. "Here my foreign work experience is an advantage; sometimes your mind works a little differently from a traditional Chinese mind and you solve problems in a different way."

Here, says Mr. Zhang, he feels valued; in Australia he found it hard to fit in. When his work mates chatted around the water cooler about rugby or cricket, for example, he "had no idea what they were talking about," he recalls, ruefully. Abroad, he felt underappreciated, underused; back home, he can make a contribution.

Indeed, returnees are playing leading roles at almost every level of Chinese society, except in politics: The ruling Communist Party seems mistrustful of cadres who have had too much foreign experience, and a paltry 6 percent of the 204 full members of the current Central Committee have had any overseas education.

Elsewhere, however, "brain gainers" can be found running the Chinese branches of many multinational corporations, at the helm of the country's groundbreaking technology firms, and helping shape public opinion as editors and commentators in the media or as pundits staffing increasingly influential think tanks.

Brain gain breaks down walls

"People familiar with two worlds have become front-runners in China," says Mr. Wang, "and as China globalizes more and more, people with knowledge of globalization will be front and center of China's development."

From that privileged position, they will change China, Wang predicts. A study he conducted earlier this year, for example, found only 46 percent of returning entrepreneurs shared the standard Chinese collectivist outlook that attaches more importance to the community than to the individual.

"We have so many structural problems," laments Tao. "There is no panacea or easy answer, but I feel that if more people like me came back we could collectively find answers and make changes."

Already, Tao says, she senses changes. As she sniffs out investment opportunities, she finds "more companies run by … returnees that are run in a more professional way, more transparently. They understand the importance of corporate governance."

Han, too, has noticed progress in the three years since he returned home. "My company totally follows the law and the rules," he insists – highly unusual in China, where corruption and rule-bending are the norm – "and I am getting more and more respect. People used to tell me that contracts were nonsense. Now my distributors respect contracts and I can use lawyers" if they don't.

Most important, perhaps, is the bridging role that people like Han and Tao will play as China struggles to find its place in the world. Since Lenovo bought IBM's personal computer unit in 2007, Bai points out, "our company has gone from being local to global.

"Those of us with [an] overseas background can easily communicate with foreign people and colleagues, and think in their ways," he says. "We are breaking down the walls between China and the rest of the world."


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