China opens doors of state-run companies to world’s top talent


In this photo taken Sept. 30, 2011, visitors look at an artwork depicting a 100-yuan Chinese currency at the 2011 Chengdu Biennale in Chengdu in southwestern China's Sichuan province. (AP/AP)
Vivek Wadhwa
Contributor, Innovations November 16, 2011

The top talent in countries around the world have a new suitor: the Chinese government.

China has a severe shortage of skilled talent and, in a policy reversal, has decided to open its doors to talent from around the world. This could mean that the brilliant NASA scientists the U.S. laid off, could find new employment — and a new home — in Shanghai or Beijing.

Vivek Wadhwa is a fellow at Rock Center for Corporate Governance at Stanford University, director of research at Center for Entrepreneurship and Research Commercialization at Duke, and distinguished fellow at Singularity University. His past appointments include Harvard Law School, University of California Berkeley, and Emory University. View Archive

Chinese research labs have long had difficulty recruiting qualified workers to perform necessary research and development, and its corporations struggle to find competent managers. The situation will likely get worse as China’s high-tech industries grow and it increases its national R&D spending from the present 1.62 percent of GDP, according to the Chinese government, to the planned 2.5 percent by 2020. China’s President Hu Jintao, in May 2010, declared talent development a national priority in order to fill the void. The goal is to dramatically increase the education level of China’s workforce and to build an innovation economy.

China has launched several high-priority programs to encourage skilled Chinese to return home — all in an effort to meet the country’s pressing talent demands. One of these programs is the “Thousand Foreign Talents Program.” The program’s goal is to bring 2,000 experienced engineers, scientists, and other experts of Chinese origin back from the West. The government also announced that it aims to cultivate 100 “strategic entrepreneurs” who can lead Chinese firms getting into the ranks of the world’s top 500 companies.

Both efforts are running ahead of target according to Dr. Huiyao Wang, the Director General of the Center for China and Globalization and an advisor to the Chinese government. China had recruited more than 1,500 “high quality talents,” according to Wang, and 300 returnees had been enrolled in management training courses by August 2011. The courses were conducted by senior ministers. These individuals, while re-learning how to operate successfully within the Chinese system, are expected to serve as a critical catalyst in transforming China’s innovation environment in ways that will enhance the country’s competitive edge across a range of key, strategic industries.

China is getting more ambitious, based on the initial recruitment successes of the returnee program.

The Chinese government invited me to attend the International Conference on the “Exchange of Talent” held in Shenzhen on Nov. 5. Vice Premier, Zhang Dejiang launched China’s “Thousand Foreign Talents Program,” which, for the first time, opens China’s doors to skilled foreigners to secure long-term employment in China. The Chinese government announced that it will allow foreign nationals to take senior roles in science and technology sectors and state-owned enterprises. They will also pay foreigners salaries equal to what they can earn at top paying jobs in America. And the government announced that it intends to offer permanent resident-type visas to foreign entrepreneurs.

This announcement was front-page news in China, and its importance should not be underestimated in the U.S. where these developments were not widely covered. These programs, which were announced with amazing fanfare, represent a significant break from the traditional “use Chinese” policies and a greater openness to the outside world. Chinese governors and senior officials from across the country participated in the ceremonies, and the Chinese government claimed the conference had 100,000 attendees. The festivities that accompanied this were nothing short of dazzling, with cultural entertainers and acrobats brought in from all over China.

Denis Fred Simon, author and Vice-Provost for International Affairs at the University of Oregon was one of the nine foreign experts at the Shenzhen conference. China, said Simon, sees talent as the next big global race for driving competitiveness and innovation. The country is determined to win this race if only to ensure it can complete the goal of transforming its economy. Wang also explained that the Chinese see this new talent pool as the key to moving from a “made in China” orientation to a “created in China” capability. China’s future growth, continued Wang, will rely more on the new talent strategy, even as its past successes were built mainly on its population dividend and investment.

But sometimes things aren’t as rosy as they seem.

Some of the returnees have found themselves victims of discrimination and petty jealousy from those who stayed behind. Moreover, they have struggled to re-adapt to China’s relationship-oriented culture, which stands in sharp contrast to the performance-oriented culture of the West. Compared to the generally transparent set of rules and decision-making processes that are commonplace in U.S. and European research and university settings, returnees are frequently confounded by the “personalized” ways research proposals are evaluated and research grants are distributed. The reality is that despite the good intentions of the program, the Chinese research environment remains plagued by plagiarism, fraud, and other scandals.

There is an even greater challenge, however. Returnees are refusing to make full-time commitments to their new Chinese employers. Many have returned only sporadically, often not meeting the stated residency requirements of the Thousand Talents Program.

The best of the Chinese talent pool abroad has not yet chosen to return to China, especially in the science and technology fields, said Simon. Some who were considering returning home, he said, are still watching and waiting as their peers cope with the challenges of returning. Family considerations also pose an important barrier, said Simon, as many Chinese expatriates based overseas would prefer their children to complete their education abroad and not have to suffer through China’s “examination hell” prior to college.

Discussions with Chinese government leaders in Shenzhen made it clear that Chinese leaders are not satisfied with the level of innovation in the country. I told them that I didn’t believe that China could fix this problem merely through returnees. China would need to learn some of the techniques that Indian industry has employed to upgrade its workforce. China’s most critical challenge will be to create a more conducive environment for entrepreneurship. Innovation requires risk-taking, breaking existing systems and challenging the norms. Within Hu Jintao’s model of a “harmonious” society (what he calls “hexie shehui”), this presents some real challenges.

Until China allows and encourages more “out of the box” thinking and behavior, it simply won’t innovate, nor will it produce the types of breakthrough products top Chinese leaders wish to see coming out of China’s research labs and key enterprises.

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