Article

Vol. L No. 3 2013
September 2013
China's Return Migration and its Impact on Home Development

China's Return Migration and its Impact on Home Development

As the world enters a stage of unprecedented globalization and economic interconnectedness, the world labour market has become increasingly competitive. In this era of international competition for talent, the Chinese diaspora is an immeasurably critical factor in helping to realize domestic development objectives, which in turn will alter the future world geopolitical balance.

With the Chinese economy growing at a breathtaking rate, Chinese international migration is also ushering in a transformative stage. International migration is altering both the political and business landscapes of China. The impact it exerts on the country’s development can be gauged from the following aspects.

The beginning of the twenty-first century witnessed soaring numbers of overseas Chinese migrating back to China. According to statistics from the Ministry of Education, in 2012 alone, over 272,900 overseas students came back, with an increase of 46.57 per cent compared with 2011.

CAUSES OF CHINA’S RETURN MIGRATION

With its high growth rate, the Chinese economy has become the world’s second largest after the United States. After the financial crisis in 2008, while other major world economies were trapped in recession, China’s economy remained robust, which created more opportunities at home for Chinese living abroad, hence spurring the return of some Chinese migrants.

In addition, in recent years, the Chinese Government has given unprecedented attention to the development of talent. Particularly worth noting is the launch in 2010 of China’s National Talent Development Plan, which forms the cornerstone of China’s efforts to combat emerging talent development issues and helps maintain the Chinese growth locomotive. This talent cultivation plan, dubbed the National Medium- and Long-term Talent Development Plan (2010–2020), is China’s first comprehensive national plan for human resources development. The plan is set to exert an extremely powerful influence on the nation’s economic and social development for years to come.

The central government programmes for attracting overseas talents include the 2008 Thousand Talents Programme; 2010 Thousand Young Talents Programme; 2011 Thousand Foreign Experts Programme; 2011 Special Talent Zone and the 2012 Ten Thousand Talent Plan. In line with the central government’s talent attracting strategy, by August 2012, 35 industries in 31 provinces and municipalities in China initiated a total of 2,778 local talent plans, such as the Beijing Haiju Programme, Jiangsu Seagull Programme and the Guangdong Pearl River Talent Plan. Under these programmes, more than 20,000 high-level overseas talents have been recruited.

The Thousand Talents Programme launched in 2008 has attracted more than 3,300 high-quality professionals from abroad to China’s key areas, while the Recruitment Programme of Foreign Experts launched in August 2011 has attracted more than 100 non-Chinese top experts.1

THE IMPACT OF CHINA’S RETURN MIGRATION

China’s new talent strategy builds on the fact that returnees have played a pivotal role in opening up and globalizing China. As a special group, returnees have contributed to the nation’s development especially in education, science, culture and health. Most returnees have kept abreast with the latest international developments and have also been very innovative. Their work has lifted the status of China’s academics in the world. In the education sector, statistics from the Ministry of Education show that 78 per cent of the presidents, 63 per cent of PhD advisers in Chinese universities directly administered by the Ministry of Education, and 72 per cent of directors of key laboratories at the national and provincial levels are returnees.2 Statistics also show that 81 per cent of academicians in the Chinese Academy of Sciences and 54 per cent of academicians in the Chinese Academy of Engineering have studied overseas. In addition, 21 out of the 23 heroes on the “two bombs and one satellite” projects are returnees.3

Many returnees have won the National Award for Science and Technology. Among the first winners of the National Award for Science and Technology, the National Award for Technological Invention, and the National Science and Technology Progress Award, 36.85 per cent are returnees. Among the winners of the National Award for Science and Technology, 66.67 per cent are returnees. Among the winners of the National Award for Technological Invention, 40 per cent are returnees. Among the winners of the National Science and Technology Progress Award, 30 per cent of the first batches are returnees. This data illustrates the fact that many returnees have become leaders in China’s scientific and technological research.4

In the health sector, the majority of the heads of medical schools and hospitals of Grade 3A (highest grade in hospital classification by the Ministry of Health) in China are returnees. A large proportion of chief physicians are returnees who play a central role in the nation’s medical science and research.

Returnees have likewise made contributions to other sectors including journalism, culture, entertainment and media. They have not only made remarkable scientific achievements, but also pushed for the reform of the education and scientific research systems.

RETURNEES IN CHINA’S GOVERNMENT

Returnees have participated in Chinese politics since the end of the Qing Dynasty, taking on important jobs in various government bodies throughout China’s modern history. In the temporary cabinet of Doctor Sun Ya-San, returnees took 15 of the 18 minister and vice minister positions in the nine government ministries.5 During the Cultural Revolution, returnees suffered and were forced into silence. Today, they have become active again. Compared with their predecessors, the greatest advantage of the new generation of returnees is their professional skill and advanced mindset. They help China integrate with the world in policy design and in the practice of these policies.

With China’s economy fast growing and its international status rising, communications between China and the rest of the world have increased tremendously. Meanwhile, the country still faces numerous challenges in terms of science and technology innovation. Facing a variety of domestic and international complexities, China has to employ high-quality talent with modern professional knowledge and international views, especially those who have studied overseas. Fortunately, in recent years China has made great strides in this aspect. In 2007, two returnees took ministerial positions in the central Chinese Government: Wan Gang was appointed Minister of the Ministry of Science and Technology, and Chen Zhu was appointed Minister of the Ministry of Health. During the past 10 years, the Chinese Central Organization Department has sent nearly 500 top officials to the Harvard Kennedy School for short-term training and exchanges, including the Chinese Communist Party politburo member and Chinese Vice President Li Yuanchao.

DRIVING FORCE OF THE NEW CHINESE ENTREPRENEURS

Over the past two decades, the country has witnessed the formidable economic and technological power of Chinese returnees. They have started numerous high tech enterprises and contributed directly to the economic development of the country. In addition, they introduced many new management concepts and new ways of financing, which benefited overall the development of entrepreneurship in China. The new generations of returnees have become a major driving force behind China’s new entrepreneurial movement. Returnees have started businesses in many sectors including technology, the Internet, telecommunications and media, and have also helped to revitalize many traditional industries. Enterprises started by returnees are now in the mainstream of China’s high tech economy. Fifty-seven per cent of businesses started by returnees are in the scientific field, with 44 per cent holding patents.

KEY PLAYER IN CHINA’S HIGH TECH INDUSTRIES

Most of the enterprises started by Chinese returnees are in the high tech sector or in high-end services. The leadership teams of these enterprises usually consist of experts commanding the latest scientific knowledge. With their close relationship with international companies, advanced management experience and wide contact, they function as a bridge between China’s domestic companies and the international market. Since the 1990s, returnee entrepreneurs have significantly propelled the development of domestic high tech businesses and services, and improved the competitiveness of Chinese enterprises in the global market. There have already been over 260 returnee entrepreneurial start-up parks set up all over China. Indeed, returnee entrepreneurs have changed the domestic business landscape and fostered the development of the new economy.

PIONEERING ENTERPRISES LISTED OVERSEAS

Chinese returnees are also the main drivers of the overseas listings of China’s high tech companies in the United States financial markets. In 2009 alone, a record 33 Chinese companies were listed on the NASDAQ, with a total of 124 Chinese companies listed on the stock market. In November 2009, NASDAQ celebrated its 100th listing from mainland China by adding China Nuokang Bio-Pharmaceutical, a health care company that provides blood and cardiovascular treatments. Most of the NASDAQ-listed Chinese companies are either funded or run by Chinese returnees.

Chinese returnee venture capitalists are active in fostering the growth of small and medium enterprises, and then listing them overseas, especially in the United States. They often reap a huge return while helping the newly listed enterprises participate in world financial markets where they are evaluated by international investors. Since most of the firms are funded or managed by Chinese returnees, they advance the development of new technology and create new models for developing businesses in China and raising funds overseas. As noted by a NASDAQ representative: “The Chinese concepts brought about by these companies listed on the NASDAQ are also accepted by international markets. It is a good thing for Chinese enterprises. Among these Chinese companies on the NASDAQ, most of their management teams have studied overseas.”

MANAGING MULTINATIONALS IN CHINA

With the world’s top 500 multinational corporations (MNCs) now operating in China, the demand for talented people with the management skills and transnational networks to bridge the East-West divide has mushroomed. In fact, a McKinsey report, as well as other studies, point out that China faces a serious shortage of middle- and high-level managers. As a result, the new waves of Chinese overseas graduates who have already returned, or who work for MNCs or leading companies abroad, have filled many of the top management positions in MNCs, often as in-country directors. The list of MNCs that employ returnees as chief executive officers, executive vice presidents, and other senior posts is impressive and includes Google, Microsoft China, UBS, Alcatel, News Corps, Siemens, Hewlett Packard, Ernst & Young, BP and General Motors. Having participated in their company’s strategic planning for China, these experienced returnees are able to put new strategies into practice. They facilitate localization, improve the country’s overall industrial structure, and help Chinese enterprises move up the value chain in world trade.

Notes

1  “Time to take a proactive approach in the global hunt for rare skills”, China Daily, 15 July 2013.

2  China, Ministry of Education, Achievements of Returnees Who Start Business in China, (Beijing, March 2004).

3  Ibid.

4  Xinhuanet.com “Returnees won National Science Rewards”, (27 February 2007).

5  China’s Modern Celebrities, edited 傅润华主编:《中国当代名人传》,世界文化服务社,1948年。

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