Keeping the best and brightest

Outward mobility is not a new phenomenon for China. There are about 35 million people of Chinese origin living in more than 150 countries. China’s growing integration with the rest of the world would even make some of this outward flow unavoidable.

Some experts maintain the brain drain helps ease pressures in the domestic labour market. Furthermore, a recent United Nations report showed that China receives about $20 billion a year from emigrants sending money back home. Yet China is losing precisely that segment of the population it requires to run its economic engine and to accomplish its global objectives.

Ever since Deng Xiaoping launched his Four Modernisations in 1978, China has actively encouraged students to seek knowledge and skills abroad. Since 2002 alone, more than 100,000 students have gone abroad each year, the study estimates, but the number of returnees has been only 20,000 to 30,000. The depletion of well-educated professionals the country has invested so much in represents a real setback.

Clearly, Beijing must create incentives to encourage at least a sizeable segment of these migrants to return. Since many talented students choose to stay on abroad for lack of opportunities back home, at least part of the priority becomes quite clear.

Beijing already offers low-interest loans for business start-ups, but much more would be required by way of incentives. Chinese businesses find it difficult, for instance, to compete with foreign firms in terms of salaries and benefits they can offer. Reversing a process of migration that has occurred over decades is undoubtedly harder than it sounds. The report nevertheless has made a compelling case for action.