Solving China’s growing migration deficit

August 27, 2014 by Yang Shen

Never before has China experienced such large migration, both into and out of the country. Both have increased in recent years, although the number of outbound migrants is far higher than those inbound. With so many qualified Chinese failing to return from their education and training abroad, will there be a skills deficit at home?

From 1978 to 2013 the total number of outbound migrants was 9.342m, compared to a mere 849,000 inbound migrants, according to the Annual Report on Chinese International Immigration 2014 (CII). The migration deficit measured up to 8.49m in 2013, compared to 3.71m in 1990. By 2013 China had become the fourth largest exporter of migrants in the world, behind only India, Mexico and Russia; while it ranked 7th in 1990 based on the Report on Overseas Chinese Professionals (OCP) published in 2014.

And the migration deficit has been increasing; it is estimated that in 2012, 300,000 people from mainland China received permanent residency overseas. Over half of these settled in just four countries: the US, Canada, Australia and New Zealand. By comparison, in the same year the Chinese government granted only 1,202 Chinese green cards to foreigners.

A 2013 UN report reveals that China also dominates the international flow of students. The number of Chinese students studying abroad reached 1.14m in 2012, compared to less than a third of this number – 326,300 – international students studying in China. Research shows that there were 850,000 Chinese contract labourers working abroad in 2012, compared to only 200,000 foreign migrants working in China.

Figures from the Overseas Chinese Affairs Office of the State Council (OCAO) suggest that there were 45.43m overseas Chinese outside mainland China, Taiwan, Hong Kong and Macao in 2010. There are some new trends amongst this Chinese diaspora, with many of the new migrants holding relatively high educational qualifications compared to migrants before the reform in 1978.

The OCAO research suggests that the primary purposes of migration are for education, followed by family reunion, business, and contract labour. According to OCP, there are 4m professional overseas Chinese, most of whom are in high technology, education, finance and are concentrated in the US (33%), Australia (15%), Canada (10%) and Singapore (9%). Half of them were born in mainland China.

It is also worth noting that investment migration has increased rapidly in the last three years, contributing to the enlarged migration deficit. According to CII, in recent years the number of outward immigrants by investment has increased conspicuously and the trend is expected to persist. An anonymous interviewee based in the UK who helps clients to process investment immigration from mainland China to the UK told China Outlook that almost all of his clients immigrate for child education.

This squares with a recently published Forbes report which identifies 10.26m people as a ‘mass affluent group’ in mainland China, whose personal investable wealth ranges from 600,000 yuan (£60,000) to 6m yuan (£600,000), most of whom are aged 40-50. Three-quarters of this group plan to send their children abroad to be educated at some point.

According to an immigration report published by Hurun, child education (21%), concern of environment pollution (20%) and food safety (19%) are the primary reasons for investment immigration. And the most popular destinations are the US (52%), Canada (21%) and Australia (9%).

China’s ministry of education says that just over three million students studied abroad from 1978 to the end of 2013, of whom 1.44m (73%) have since returned China, when those who are still studying and doing research abroad are excluded.  Both the numbers of outward students and returnees (sometimes called turtles) have increased; the former grew by 3.58% and the latter had a rapid increase of 29.53% compared to 2012. The Annual Report on the Development of Chinese Students Studying Abroad 2013 reveals that from 2007 to 2012, the returnees reached almost 800,000, three times the average figure for the years from 1978 to 2007.  This rapid growth is expected to continue in the coming years.

However, the number of high standard returnees is relatively small. According to the People’s Daily, the proportion of the doctorate, master and bachelor degree-held returnees is 1:8:1.  Nevertheless, the person in charge of the CPC Central Committee’s Talented People Coordinating Team pointed out that the proportion of top talent that China lost ranks the top in the world. For example, 87% of talents in science and engineering naturalized abroad, creating a skill shortage in the realm of research and development.

Half of the returnees trained for one-year master’s course. 80% of the returnees are aged 24 to 30 and primarily returned from UK (31.2%), US (15.1%) and Australia (11.8%). Most of them took programme in management, economics, science and engineering.

The Annual Report on the Development of Chinese Returnees (DCR) notes that 48.5% of the returnees work in finance and associated sectors. Other sectors include education and research (9.1%), new information technology (8.7%), innovative culture industry (7.4%), biological engineering and medical (7.4%), new energy and new material, (7.0%), government and public sector (6.9%).

As discussed earlier, the growing migration deficit is becoming of increasing concern. In response central government has developed several strategies to attract high skilled talent from overseas. The Recruitment Programme of Global Experts (the 1000 Plan) is one of them. The state sets high standards for what is meant by global experts – people who hold professorships or the equivalent in renowned universities or institutions; senior professionals or managerial employees in international corporations; and experienced entrepreneurs having either intellectual property rights or core technologies.

The 1000 Plan Project started in 2008, soon after the beginning of the global financial crisis. It is reported that 4,180 experts were tempted to go back from 2008 to 2013.

A strong patriotic component is embedded in the strategies to attract returnees. For instance, the main page of the official website bears a slogan stating ‘the homeland needs you, the homeland welcomes you, the homeland is putting hope in you!’ with a background picture of the Great Wall. The government grants special preferences to these global experts, including priority in applying for a permanent residence permit (Chinese green card). By May 2014, over 1300 such permits had been issued.

Apart from the 1000 Plan Project, other state-launched programmes include the Chunhui Plan, the Programme for Changjiang Scholars, Recruitment Programme of Global Young Experts, and so on. Usually these projects are only applicable to either experts who return to work in universities and institutions, government departments and the state-owned companies or entrepreneurs who have expertise in biotechnology, new energy, etc. All have a strong focus on well-established talents in science and engineering, reflecting the state’s pragmatic and utilitarian approach.

However, it raises two issues. First, all of the above-mentioned programmes focus on science and engineering, whereas humanities and social sciences are marginalized. Although the productivity of the latter are difficult to assess, they are important for dealing with social issues and to improving the wellbeing of people. Second, most of the programmes focus on well-established talents, who are more likely to be older. Young talents who have great potentials are less well supported.

According to DCR, the most attractive places for returnees to work include Beijing (41.6%), Shanghai (14.2%), Guangdong Province (14.2%), Jiangsu (6.4%), Zhejiang (5.3%) and Shandong (5.2%). As for the motivations for their return, 90.9% consider “wishing to be close to parents” as the primary reason; 78.4% claimed that they returned because they have confidence in their future career development in China; and 64.1% are motivated by the believe that China’s market will keep being prosperous.

The obstacles to return include the constraints at work. In comparison, the factors that motivate people to emigrate, such as air pollution and food safety issues, don’t seem to be as much of a concern. One person interviewed for this article, who returned from a world leading university through the Recruitment Program of Global Youth Expert and who is now working for a renowned institution commented that the working environment is far from perfect because only short-term performance is evaluated, forcing a returnee to have significant achievements in a couple of years.

Nevertheless, it takes time for returnees to accommodate themselves at work. To establish and lead a brand-new lab in a research institution is also time-consuming. But the employment contract does not take these effects into consideration. In some research institutions, the management is still administration-oriented rather than academic-led and office politics can be very complicated.

Some returnees find themselves uncomfortable in this system. However, the expert interviewed said that although facing difficulties, he would not consider going abroad for the time being because research funding is better in China and he felt he achieved more compared to the time he worked abroad.

The DCR says the state is developing new strategies in response to skill shortage and the migration deficit. The approach to attract talents changes from ‘return and serve the country’ to ‘serve for the country’; and from ‘the return of the people’ to ‘the return of the skill’, which implies that an expert does not need to move back permanently and he/she is able to provide the skills and technologies without going back. What’s more, the Chinese green card system is expected to change, with efforts to make it more relaxed and flexible.

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