China attracting global talent: central and local initiatives.
Chinese leaders Deng Xiaoping, Jiang Zemin and Hu Jintao have stressed the importance of human talent in China's modernisation project. Over the years, China has gradually established a nationwide policy of human resources development (HRD). Recent research has documented the evolution of China's HRD policy. (1) One milestone event was an Asia-Pacific Economic Cooperation (APEC) conference on human capacity building (Beijing Initiative) that Beijing hosted in 2001. Building on this momentum, China included a special chapter on HRD in the 10th Five-year Plan (2001-2005), the first time ever in a five-year plan. This in turn helped China take more pro-active measures to develop human resources through education, training and research and development (R&D).
Against this backdrop, China has become much more open and outward-looking towards global talent, including overseas Chinese and foreigners of non-Chinese origin. Not only has the central government, but also local governments have shown great interest in attracting global talent. Indeed there has been growing competition among the large cities for top-notch talent from abroad. Another development is that the type of talent China is recruiting has changed over the years. While the central government continues to value top scientists and engineers for the purpose of national innovation and competitiveness, other types of talent--senior managing staff in multinational corporations and banks and technopreneurs who have developed their own patents or technology--are also targeted by various talent schemes.
The current global financial crisis, while bad news for employment and economic growth, is helping China attract global top talent. The worst financial crisis in decades has resulted in a cutback in research programmes in some developed countries whereas China continues to increase spending on science and technology development. The global financial crisis is therefore serving as a push factor to the advantage of China. The Central Organisation Department of the Chinese Communist Party (CPC) launched the "One Thousand Talents Scheme" in December 2008. The scheme plans to recruit 2,000 talent of any nationality in the next five to ten years. It represents China's latest effort in a global hunt for top-notch talent.
China's HRD Systems
Traditionally, China's human resource functions have been divided among three agencies. The first agency is the Organisation Department of the CPC, extending from the central level down to the county level. It is responsible for leadership selection, evaluation, promotion and training. The Department plays a central role in allocating qualified individuals to leadership positions at various levels of Party and government agencies, as well as managerial positions in medium-to large-sized state owned enterprises (SOEs). The second agency is the Ministry of Personnel in the central government and Bureau of Personnel at the provincial, municipal and county levels. This system is in charge of human resource functions for professional employees in the state sector, including party and government agencies, public institutions such as schools and hospitals and SOEs. The third agency is the Ministry of Labour and Social Security in the central government and Bureau of Labour and Social Security in sub-national governments. This system is in charge of human resource functions for workers in the state sector. With the expansion of private employment, it also oversees functions such as unemployment insurance, labour relations and workplace safety for workers in the private sector. (2) In 2008, the Ministry of Personnel and Ministry of Labour and Social Security were merged and renamed the Ministry of Human Resources and Social Security. The new ministry is responsible for national labour policies, standards and regulations and managing the national social security system.
Insofar as talent schemes are concerned, the Central Organisation Department plays a much more important role than the Ministry of Human Resources and Social Security or its predecessors. This is in line with the basic principle of "Party managing human talent" (dang guan rencai). In 2003, the Central Committee of the CPC and the State Council organised a national conference on human resources development, the first of its kind since the founding of the People's Republic of China in 1949. Based on the remarks made by Hu Jintao that "human resources are the first primary resource in China, that the country should be turned from a populous nation into a big nation with abundant talented human resources" and that "the country should make good use of human resources at home and abroad", attracting global talent was emphasised as an important part of China's HRD strategy. (3) The Central Personnel Work Coordinating Small Group (zhongyang rencai gongzuo xietiao xiaozu) was established that year, headed by the Central Organisation Department, with members coming from a dozen other departments. This small group coordinates the national policy-making processes and resources, ready to play a central role in recruiting top-notch talent from abroad.
Other than the Central Organisation Department, important ministries and agencies that are attracting global talent include the Ministry of Education, Ministry of Science and Technology, Chinese Academy of Sciences, Ministry of Public Security and so on. The Ministry of Education is in charge of Chinese universities, where many national key scientific subjects and laboratories are based. The Chinese Academy of Sciences is relevant for the same reason. The Ministry of Science and Technology takes a leading role in drawing up science and technology development plans and policies and is responsible for drafting the National Basic Research Programme, National High-Tech Research and Development Programme and Science and Technology Enabling Programme. The Ministry of Public Security is relevant because it manages immigration and household registration issues. Any effort to revise policies to make it easier for foreign talent to work and live in China must go through the Ministry of Public Security.
Through the Central Personnel Work Coordinating Small Group, China has established a centralised mechanism to coordinate HRD at the national level since 2003. Down the party and government hierarchy to the provincial level and the municipal level, however, local governments have both incentives and autonomy to set up their own talent schemes. Seen in this light, just as China's economy and social services are decentralised, to a large extent the same is true for China's effort in recruiting global talent. Local governments take initiatives to set up their own talent schemes, independent from and in some cases ahead of the central initiatives. Shanghai was the first city to encourage the return of overseas Chinese. It announced favourable policies as early as 1992, when China's integration with the world economy through FDI and trade was about to accelerate. In 1994, China's first high-tech park for overseas Chinese returnees was established in Nanjing, the capital city of Jiangsu Province. Other cities are actively following suit. They have been fiercely competing with one another for FDI and economic growth. Now they have to compete for global top talent as well.
Attracting Top Scientists and Academics
At the central level, the first group of talent that the government is keen to recruit includes scientists and academics. This group of talent remains the most important target of the central government's talent schemes today. In an effort to boost the country's scientific and innovative capability, the central government has set up programmes to attract top scientists and academics since the 1990s. The Chinese Academy of Sciences initiated the "100-Talents Scheme" (bai ren jihua) in 1994; while the Ministry of Education initiated the "Yangtze River Scholar Scheme" (Changjiang xuezhe jiangli jihua) in 1998. From 1998 to 2006, among a total of 1,107 Yangtze River Scheme scholars, 94 per cent had overseas work or study experience. These two schemes have attracted more than 4,000 researchers over the past 15 years. Most of them were postdoctorals or associate professors at the time of recruitment. (4)
As a result of the state policy of sending scholars to study overseas and recruit scholars from abroad, 77 per cent of the presidents of Chinese universities, 84 per cent of the academicians at the Chinese Academy of Sciences and 75 per cent of the academicians at the Chinese Academy of Engineering have overseas study and/or work experience. (5) The official data do not make a distinction between those who received a PhD degree from overseas universities and those who went abroad as a visiting scholar or for some short-term courses. The official number therefore conceals two distinct career paths. One path began with domestic education and continued with career advancement within the system. Prior to further advancement to more prominent positions, candidates were selected and sent to overseas universities. Their overseas study experience is a short episode in the career path of "sponsored mobility". (6) The other path began with a foreign degree and eventually led to prominent positions in Chinese universities, Chinese Academy of Sciences or Chinese Academy of Engineering. While those on the first path do not theoretically belong to the category of global talent attracted to China, official data lump both groups together as overseas returnees. The Chinese government simply uses the numbers cited above to argue for the working of its talent schemes.
In December 2008, the Central Organisation Department launched the "One Thousand Talents Scheme" (qian ren jihua). Compared with earlier programmes such as the Chinese Academy of Sciences' "100-Talents Scheme" and the Ministry of Education's "Yangtze River Scholar Scheme", which continue, the new scheme not only sets the bar higher, but also casts the net wider. It aims to attract three groups of top-class minds who (1) have an academic title equivalent to professor in internationally well-known universities and institutions, or (2) work as a senior managing staff within a well-known international company or banking institution, or (3) have developed technologies and patents and established their own businesses abroad.
According to this scheme, four types of organisation can apply to recruit global talent through the scheme. These organisations are (1) national innovation projects (guojia zhongdian chuangxin xiangmu), (2) key scientific subjects and laboratories (zhongdian xueke he zhongdian shiyan shi), (3) central government-owned enterprises and state-owned banking institutions and (4) high-tech parks (gaoxin jishu chanye kaifa qu). Alternatively, candidates can send their applications directly to the Ministry of Human Resources and Social Security, the State Administration of Foreign Experts Affairs, the All-China Youth Federation, the China Association for Science and Technology and the Western Returned Scholars Association.
The Office for Attracting High Level Overseas Talent established by the Central Organisational Department will coordinate the evaluation and selection process. The Ministry of Science and Technology will evaluate candidates for national innovation projects and work with the Ministry of Education to evaluate candidates for key subjects and laboratories. The State-owned Assets Supervision and Administration Commission of the State Council and the People's Bank of China will evaluate those applying for positions with state-owned enterprises and banking institutions. Finally, the Ministry of Science and Technology and Ministry of Human Resources and Social Security will evaluate talent with entrepreneurial skills.
Organisations participating in the scheme are required to provide good career opportunities and working conditions to those who are selected. Those chosen have favourable chances for leading research institutes, state-owned banking institutions or government-funded key research programmes. They can apply for research and industrial development funds provided by the Chinese government and apply to be an academician at the Chinese Academy of Sciences or an academician of the Chinese Academy of Engineering.
Non-Chinese professionals and their families can apply for Permanent Residence or multiple-entry visas valid for two to five years. For all professionals selected by the scheme, the central government will provide each with one million yuan as a one-time subsidy in addition to their salaries, which should be comparable to the remuneration of their previous job. Moreover, the selected talent and their families will be able to enjoy various social security benefits.
The Overseas Students and Experts Service Centre, under the Ministry of Human Resources and Social Security, will open special service windows to help professionals handle paperwork and get settled, including Permanent Residence or household registration and schooling for their children.
Li Yuanchao, head of the Central Organisation Department, is keen to push this scheme forward. He had learned the importance and skills of attracting overseas returnees when he was the Party Secretary of Jiangsu Province before his promotion to his current position. Li has a stake in managing the new scheme well, which can add credit to his bid for membership in China's top leadership--the Standing Committee of the CPC--in the 18th Party Congress to be held in 2012.
The scheme plans to recruit 2,000 top talent over the next five to ten years and will consider any nationality. By April 2009, the scheme had lured the first batch of 96 scientists and 26 entrepreneurs to China. Of the group, more than 80 hold foreign passports and four are of non-Chinese origin. (7)
Promoting Local Technopreneurship
China has been reshaping its national science and technology policy to be more enterprise-led and commercial-oriented. Under this reorientation, China has been actively recruiting entrepreneurs in high-tech industries, such as the internet, IT, communication and media, as well as professionals in high-end service industries like finance and accounting, consulting, law, media, publishing, public relations, advertising, tourism, meetings and exhibitions and education. By February 2009, China had established more than 110 overseas returnee entrepreneurship incubation centres, with more than 8,000 enterprises and 20,000 returnees. (8)
While the central government has placed priority on recruiting top scientists and academics, local governments have been very active in attracting high-tech entrepreneurs. The best known example is Beijing's Zhong Guan Cun Science and Technology Park, which has established 25 incubation centres. By the end of 2007, Zhong Guan Cun incubation centres had attracted 4,200 companies. Among the returnee entrepreneurs in Zhong Guan Cun, 44 per cent have patents. (9)
Provincial level governments have recognised the importance of returnee entrepreneurship for local economic growth. They are now willing to spend on a variety of talent schemes, in some cases as much as that offered by the central government. Jiangsu Province initiated a scheme targeting innovative returnee entrepreneurs in the 11th Five-Year Plan period (2006-2011). It planned to spend 100 million RMB every year. More than one million RMB will be provided as financial support to each of the selected talent. In 2008, total spending was increased to 200 million yuan every year, to attract 150 high-level innovative and entrepreneurial talent annually. (10)
Beijing has a number of schemes to promote returnee entrepreneurship. In December 2008 it set up an Overseas Students and Scholars Service Centre to help recruit overseas Chinese. Shanghai initiated China's first talent scheme as early as 1992. It is now competing for global talent through the "10,000 Overseas Returnees Cluster Project". This project has attracted more than 20,000 overseas returnees who created over 4,000 enterprises. (11)
Large cities in coastal regions are in an advantaged position to attract overseas returnees. Among an estimated total of 300,000 to 400,000 returnees, about 100,000 have chosen to live in Beijing, 70,000 in Shanghai, 30,000 in Guangzhou, Shenzhen and other Pearl River Delta cities, nearly 100,000 in provincial capital cities and another 50,000-100,000 returnees in more remote counties. (12)
While provincial and city governments take the lead in promoting returnee entrepreneurship, some county governments in the coastal regions have begun to follow suit. A good example is the county government of Changzhou, Jiangsu Province, which identifies four categories of returnees for recruitment: (1) those who have developed technologies in high-tech industries, (2) those who have intellectual property rights and patents which have great market potential, (3) those who can bring in advanced technologies and equipment to Changzhou and (4) those who can manage big projects and help Changzhou develop high-tech industries.
Changzhou's county government will provide three million yuan as start-up capital for selected returnee entrepreneurs. It is also willing to provide venture capital up to 15 per cent of the registered capital of the new enterprises. There are also various innovation funds for returnee entrepreneurs to apply. Finally, the Changzhou county government will provide good education and welfare benefits to the children and family of returnee entrepreneurs. By 2008, four batches of overseas returnees had been recruited to Changzhou.
While in recent years there have been efforts to attract global talent to provincial, city and even county governments, a horizontal network involving governments and businesses in different regions has also been forming. For example, 41 high-tech and industrial parks from Beijing, Nanjing, Shanghai, Shenzhen and some other cities formed the Association of China Returnee Entrepreneurship Parks to promote cross-regional cooperation. Local governments in different cities have played a facilitative role in cultivating this trans-local network, which gives high-tech and industrial parks mutually beneficial comparative advantages. For example, Zhong Guan Cun is strong in its high-tech R&D, but is relatively weak in production. On the other hand, the Nanjing high-tech zone has competitive advantage in labour and infrastructure cost and production scale. There is much to gain by cooperating through the Association of China Returnee Entrepreneurship Parks. (13)
Attracting High-Level Professionals
Other than top scientists, academics and technopreneurs, China is also in need of high-level professionals. A 2005 McKinsey Global Institute survey found that fewer than ten per cent of Chinese job candidates would be suitable to work in a foreign company for reasons including the lack of practical skills and the relatively low creativity of Chinese students. (14) For both foreign firms investing in China and Chinese firms going global, professionals with knowledge of international practices are always lacking.
With Chinese banks and state-owned enterprises becoming some of the largest in the world, high-level professionals for the first time are becoming the target for recruitment in the central government's most recent talent scheme--"One Thousand Talents Scheme". Eligible candidates must have worked as senior managing staff in a well-known multinational corporation or banking institution. The State-owned Assets Supervision and Administration Commission will work with the Central Organisation Department to recruit high-level professionals for central government-owned enterprises; and the People's Bank of China will work with the Central Organisation Department to attract high-level professionals for Chinese banks.
Local governments seem to be more interested in attracting technopreneurs than high-level professionals in part because technopreneurs directly contribute to local economic growth while high-level professionals do not. But some provincial governments have recognised the importance of professionals for local enterprises, be they private or state-owned. Zhejiang Province, which has a more developed private economy than most other provinces, organised a job fair in Wenzhou in 2004 to attract overseas professionals for local private enterprises. The job fair brought international and domestic job agencies and 120 overseas returnees into contact with more than 300 private enterprises.
While most overseas returnees prefer to work for multinational corporations, state-owned enterprises and banks are now able to offer attractive packages. With the growing effort by central and local governments, more high-level professionals and other top talent are likely to be found in SOEs. Some private firms in high end service industries are also able to attract high-level professionals. Some are in fact set up by overseas returnees.
The talent schemes initiated by central and local governments target top scientists and academics, innovative technopreneurs and high-level professionals. Less competitive overseas returnees have to compete for jobs with other overseas returnees, whose numbers have been increasing rapidly in recent years and a much larger number--amounting to over six million in 2009--of Chinese university graduates. Education abroad alone can no longer guarantee a high paying job.
Overseas returnees have been stratified into different status groups as a result of growing competition. The Chinese have coined a number of terms to describe them. The earlier term is haigui (sea turtles, pronounced the same as "overseas returnees"). Previously, this term was associated with high paying jobs and high socioeconomic status. As overseas returnees became more differentiated, two new terms have appeared. The term haiou (seagulls) refers to a group of "half-returnees" who split their time between China and other countries. They are of course the most privileged among all the haigui because they are mobile globally and enjoy the benefits of jobs in both China and abroad. Members of another group, now known as haidai (seaweed, pronounced the same as unemployed returnees), have yet to find a regular job in China. The talent schemes have nothing to do with this group of haidai.
Challenges and Opportunities
China's sustained economic growth and rapid integration with the world economy have created favourable conditions for central and local governments to attract global talent. China is now able to offer globally competitive packages and better career prospects to overseas Chinese whose climb up the corporate ladder has often been blocked by the racial-based "glass ceiling". Previously, China's SOEs and banks were generally closed to foreign talent. As they globalise and grow into some of the largest in the world, they have begun to review their human resource practices and are now keen to recruit senior managers from multinational corporations.
Compared with earlier programmes, China's new talent schemes are helped by a number of factors. First, China is able to offer a much more generous package than before. The "One Thousand Talents Scheme" initiated by the Central Organisation Department offers a one-time relocation allowance of one million RMB in addition to globally competitive salaries. The talent schemes initiated by local governments are no less generous. Material incentives have become an important part of various talent schemes. Second, China's research, business and social environment has improved considerably over the years. After the 2008 Beijing Olympics, large cities such as Beijing and Shanghai have become more internationalised, making living in China a less daunting challenge for the families of foreign talent.
Third, China's ability to attract global talent is helped by the increasingly larger pool of talent formed over the years as more than 1.4 million Chinese had studied abroad by 2008 (see Appendix 1). It is estimated that more than 200,000 Chinese have been working in developed countries after receiving education there, including 67,000 who have a title equivalent to assistant professor and 15,000 equivalent to associate or full professor. (15) Some of them may find China's talent schemes attractive enough to take a part-time or full-time job in China.
Last but not least, the worst global financial crisis in decades has hit the developed countries and their universities and research institutions hard, resulting in research programmes being cut back. In contrast, China continues to increase spending on science and technology. Its state-owned enterprises and banks, some among the largest of their kind in the world, are ready to recruit talent from Wall Street and multinational corporations. China--at both the central and local levels--now faces a rare opportunity to take advantage of the global financial crisis, a unique advantage not previously available.
China today is in a much better position to attract global talent than before. The pull factors (globally competitive salaries, better career opportunities and improved research and social environment) as well as the push factors (the global financial crisis) work to the advantage of China. Local governments have joined the central government, and the state-owned enterprises and banks have joined universities and national laboratories, in stepping up efforts to lure global talent. While top scientists and academics remain an important target for recruitment, China's talent schemes have cast the net much wider to include high-level professionals and high-tech entrepreneurs as well. China's hunt for global talent therefore changes with its economic needs.
So far, ethnic Chinese have dominated talent recruited to Chinese universities, research institutes, development zones and state-owned enterprises. To fully tap into the pool of global talent, China's largest cities still have a long way to go, compared with more internationalised Singapore and Hong Kong. In this competition, material incentive is not the only factor that matters. The broader institutional environment, which affects how people live, work and interact, will become a more important determinant when salaries in different places tend to converge for global talent.
The number of Chinese overseas students grew from 270,000 in 1996 to 1,392,000 in 2008, and the number of returnees increased from 89,000 to 389,000. The returning ratio initially dropped from 32.9 per cent in 1996 to 24.3 per cent in 2004, but since then increased gradually to reach 27.9 per cent in 2008. There are currently 1,002,000 remaining abroad, with 735,000 undertaking their undergraduate, post-graduate and post-doctoral research.
In 2008 alone, among the total 180,000 new Chinese overseas students, 11,000 were sent by the government, 7,000 by various organisations and companies, while the remaining 162,000 were self-sponsored students, or 90 per cent of the total. On the returnee side, among the total of 69,300 returnees, 7,500 were sent by the government and 5,000 by organisations and companies, while 56,800 were self-sponsored students, accounting for 82 per cent of the total returnees.
Chinese Overseas Students and Returnees 1996 1998 2000 Accumulated Overseas Students (1,000) 270 302 340 Accumulated Returnees (1,000) 89 99 130 Return Ratio (%) 32.9 32.7 38.2 2002 2004 2005 Accumulated Overseas Students (1,000) 585 814 933 Accumulated Returnees (1,000) 153 198 233 Return Ratio (%) 26.2 24.3 24.9 2006 2007 2008 Accumulated Overseas Students (1,000) 1,067 1,212 1,392 Accumulated Returnees (1,000) 275 320 389 Return Ratio (%) 25.8 26.4 27.9 Source: Ministry of Education website. (16)
(1) Baiyin Yang, De Zhang and Mian Zhang, "National Human Resource Development in the People's Republic of China", Advances in Developing Human Resources 6, no. 3 (2004): 297-306.
(2) Ibid., pp. 299-300.
(3) See <http://www.chinadaily.com.cn/en/doc/2003-12/ 21/content_292190.htm> [June 2009].
(4) See <http://www.gci-online.de/modules.php?name=News&file=print& sid=1621> [June 2009].
(6) For a more detailed discussion of the term and its application to China, see Bobai Li and Andrew Walder, "Career Advancement as Party Patronage: Sponsored Mobility into the Chinese Administrative Elite, 1949-1996", American Journal of Sociology 106, no. 5 (2001): 1371-408.
(7) See <http://www.chinadaily.com.cn/china/2009-04/16/ content_7682212.htm> [June 2009].
(8) "China Established More than 110 Overseas Returnee Entrepreneurship Incubation Centres", 16 Feb. 2009 <http://www.gov.cn>.
(9) China Daily (Overseas), 10 Aug. 2008.
(10) <http://news.xinhuanet.com/newscenter/2009-01/07/ content_10620815.htm> [June 2009].
(11) <http://news.xinhuanet.com/newscenter/2009-01/20/ content_10692254.htm> [June 2009].
(12) <http://vip.book.sina.com.cn/book/chapter_48894_34361.html> [June 2009].
(13) See <http://www.jdhitech.com/new/onews.asp?id=422> [June 2009]; <http://www.cscse.edu.cn/publish/portal6/tab655/info7821.htm> [ June 2009].
(14) See <http://www.atimes.com/atimes/China_Business/HG06Cb05.html> [June 2009].
(15) See <http://news.xinhuanet.com/newscenter/2009-01/07/ content_10620815.htm> [June 2009].
(16) See <http://www.moe.edu.cn/edoas/website18/level3.jsp? tablename=1305&infoid=1242963391971267> [June 2009].
Dr. Zhao Litao (firstname.lastname@example.org) is a Research Fellow at the East Asian Institute, National University of Singapore. He received his PhD in sociology from Stanford University. His main research interests include social stratification and mobility, sociology of education, organisational analysis and China's social policy.
Zhu Jinjing (email@example.com) is a Research Assistant at the same institute. Her main research interests include China's science and technology policy and China's elite and talent circulation.