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For China, Brain Drain Key to Brain Gain



Unlike India. Beijing''s official policy and industry incentives mean jackpot for those who want to return
For the last 25 years, many of the best and brightest in India and China have left for western shores in the belief that study and work abroad offer greater opportunities.

However, unlike India which has been wringing its hands over this "brain drain", the Chinese have systematically encouraged their best to acquire valuable expertise abroad—and then wooed them back to set up businesses or work in top government posts. Often, at the expense of western universities.

Apart from direct incentives, the Chinese have succeeded in creating a dynamic macro-economic environment to attract students back.

Overseas-educated researchers are playing a predominant role in China''s prestigous scientific projects, such as the space programme and human genome mapping. Returnees have founded nearly all the country''s high-tech companies listed on NASDAQ.

These returnees include Charles Zhang, founder and CEO of, China''s premier online brand and Internet portal; Edward Tian, head of China Netcom, the country''s second-largest fixed-line carrier; Robin Li, CEO of Baidu, the leading Chinese language search engine.

"Returnees are a force to reckon with in every significant area," says Jeff Huang, an entrepreneur who spent more than 10 years in the US before setting up his own cross-border merger and acquisitions advisory firm, Chisurf Ltd, in Beijing.

"All major financial institutions, like the central bank and the securities regulatory commission, are full of overseas educated personnel," he says, adding, "These people have practical experience in the US and they come back to try and shape the future system and policy here from within, bringing best practices with them."

Besides, Chinese universities are spending vast sums wooing academics with foreign PhDs. According to Professor Feng Lu of Beijing University''s prestigious China Centre for Economic Research (CCER), salaries for returnee economists range from $30,000-50,000 per annum, excluding housing and other perks. A foreign PHD is a minimum qualification for a job at CCER. Professor Lu says that despite this stringent requirement there are 10-15 applicants, on an average, for every opening.

Domestic firms and the scores of MNCs that have flooded the country are constantly on the lookout for Chinese executives with MBAs from the best business schools abroad.

According to Ana Westlake, a Beijing-based HR consultant, executives with foreign degrees and work experience can expect to be paid two to three times more than colleagues with a domestic education.

The policy of encouraging Chinese students to go abroad was instituted by Deng Xiaoping who believed that if even a small percentage returned, it would benefit the country.

However, in the 1980s, only a trickle of students returned. An embarrassed Ministry of Educating (MOE) then began to advocate a policy reversal till the then general secretary of the Party, Zhao Ziyang, stressed on continuing to "store brain power overseas". By the late 80s, Chinese cities began to compete with each other to recruit overseas-educated talent, offering tax incentives, preferential business loans, free office space, better housing and faster promotions. Currently, over 110 different kinds of special zones and industrial parks for such "returnees" have been established, according to the Chinese MOE website. Over 6,000 enterprises are located in these parks, employing more than 15,000 returnees.

Government policy aimed to attract back top-class scientists, economists and entrepreneurs, particularly those in hi-tech areas. According to Xinhua, the official news agency, all 23 national chief scientists in China are returnees.