August 05, 2016

Is China setting up its first immigration office?

President Xi Jinping is seeking overseas talent to help drive the transition of China’s economy from manufacturing and investment to consumer spending and innovation, according to unnamed sources.

Like many countries, China faces the economic and social demands of an aging population—it finally relaxed its controversial one-child policy in 2015 after the working-age population shrank for the first time in two decades—whilst, it also strives to avoid the “middle-income trap” that has stalled developing economies from Asia to South America.

The new immigration office may be an indication that the government sees the recruitment of foreign workers as a way to address these challenges. However, it is still not entirely clear who the office would seek to attract: international talent or the Chinese diaspora, particularly those who left to further their education and never returned.

Only 600,000 foreigners currently live in China, a very small proportion of a population of almost 1.4 billion. Strict visa rules have complicated previous efforts to lure overseas workers. In the first decade after permanent resident status was made available, only 7,300 foreigners actually secured it. The Ministry of Public Security recently announced measures to streamline permanent residency applications and other skilled foreign worker approvals in the free trade zone in China’s southern manufacturing powerhouse of Guangdong, which borders Hong Kong.

The government has also broadened the categories of people eligible for a Chinese green card, highlighting foreigners who work in innovation-focussed careers in laboratories and technology centers.

Wang Yukai, a professor at the state-run Chinese Academy of Governance states that the government “would like to attract the elite, talented people, but we wouldn’t allow those who we don’t need to flood into China.”

Abdurrahman B. Aydemir, advises, in his IZA World of Labor article, that “designing skill-based selection policies is complicated; policies need to reflect labor market characteristics and the applicant pool. To maximize benefits, immigrant selection policies should be complemented by economic integration policies to ease the transfer of foreign human capital.”

China may also wish engage with its diaspora population, e.g. the large proportion of the 2.6 million students sent abroad between 1978 and 2012 who chose not to return. In his article on engaging diaspora populations for IZA World of Labor, Changzoo Song highlights the case of South Korea. South Korea’s diaspora engagement policy was “a response to a demographic crisis caused by a rapidly aging population, a falling fertility rate, continued emigration of the middle class, a rising number of non-Korean residents in the country, and a stagnating economy.” The government’s Overseas Koreans Foundation is fostering a Korean identity among the diaspora, enhancing and expanding economic and political cooperation with them, and building networks linking them to one another and to Koreans in South Korea.

Related articles:
Skill-based immigration, economic integration, and economic performance, by Abdurrahman B. Aydemir
Engaging the diaspora in an era of transnationalism, by Changzoo Song
The brain drain from developing countries, by Frédéric Docquier
How to attract foreign students, by Arnaud Chevalier