Archives June 2007

Keeping China’s best and brightest at home

By Kent Ewing

HONG KONG – As Western countries worry over China’s rise on the international stage, they hold a key advantage in the competition for power and influence: many of China’s best and brightest go abroad for a university education, enjoy their lives in the West, and never return home to share their knowledge and expertise with the motherland.

A recent study by the Chinese Academy of Social Sciences (CASS), the nation’s top think-tank, shows that China is losing more first-rate minds to the West than any other country in the world. The phenomenon amounts to a new form of colonialism in which Western countries exploit intellectual talent rather than raw materials.

China is not the only victim of this international form of brain-picking, but it tops the list. More than 70% of the Chinese students who go abroad to study don’t return home, according to the study. Of the 1.06 million Chinese who have traveled overseas to study since 1978, CASS found that only 275,000 have returned.

And despite torrid economic growth of nearly 10% for the past three decades, the problem does not seem to be getting any better. In 2005, 118,500 students left China for study abroad. By 2010, 200,000 are expected to enroll in foreign universities.

All told, according to CASS, the Chinese diaspora holds 35 million people scattered in more than 150 countries, making China the world’s largest source of emigrants.

Yang Xiaojing, one of the authors of the study, was pleased by the international competitiveness of Chinese students but worried about the country’s future if the brain drain continues.

“This shows that Chinese students overseas, especially those with extraordinary abilities, are a real hit in the global tug-of-war for talent,” he told the state-run China Daily. “While strictly controlling the inflow of foreign labor to protect the interests of [their] domestic workforce, most developed countries spare no effort to attract the best talent from around the world.”

Yang added this warning: “Against a backdrop of economic globalization, an excessive brain drain will inevitably threaten the human-resources security and eventually the national economic and social security of any country.”

Previously, Beijing had embraced the concept of “brain circulation”. The aim was for students to study in the West and then bring back their expertise to China for the advancement of the motherland. In addition, emigration reduced competition in the job market, which is cutthroat for university graduates in China, and brain drain seemed of no great consequence in a country where last week 10 million students sat the annual university entrance exam. Emigration also brings US$20 billion in annual remittances to the country from Chinese living overseas, according to a 2006 United Nations report.

But with seven of every 10 students remaining abroad while China suffers from a dearth of expertise in important sectors of the economy, the thinking in Beijing has changed. Now the government is offering incentives for students and professionals to return. Issued in March, these include exempting professionals in undermanned fields – science, engineering, and corporate management stand out – from the burdensome hukou (house registration) system, which can limit where a person lives and works.

Low-interest loans and higher salaries are also being offered to returnees, as well as coveted places for their children in the country’s most prestigious universities. The Ministry of Personnel has even called for “a talent security alarm system” to monitor emigration.

Meanwhile, the diaspora continues to expand. What will it take to persuade those who are potentially some of China’s best and brightest stars to come home?

“Of the many reasons for the brain drain of Chinese students,” the CASS study said, “huge social and economic gaps in terms of personal income, employment opportunities, working conditions, research facilities and living standards are the main ones.”

Put plainly, talented graduates can make a lot more money outside China, enjoy a better work environment, avoid rampant corruption, and plan a family without worrying about the one-child policy.

Emigrants must also be daunted by the unemployment rate for university graduates in China. Since 2002, it has averaged 30%. Part of the problem is the education system itself, which has been unable to keep up with the rapidly changing needs of Chinese society. There is a shortage of qualified faculty and courses in finance, management, information technology and other fields that are in growing demand in the booming Chinese economy. At the same time, there are far too many graduates in the humanities and social sciences who battle for jobs in a glutted market.

The potential for social unrest among unemployed students rightly worries the Chinese leadership. Those worries must have been heightened last week when a riot ensued after a female student was beaten by city inspectors for illegally selling fashion accessories on a street in Zhengzhou, the capital of Henan province. The rioters were mostly other students from different universities in Zhengzhou.

The Zhengzhou incident is a painful reminder that the Chinese educational system is caught in a difficult catch-up game with the country’s runaway economy. It is no wonder that gifted students opt to go abroad and that, once there, many choose not to return.

Despite the large numbers, however, the Chinese emigration problem pales when compared in percentages with places in the developing world. World Bank figures show that a quarter to half of university-educated professionals in the world’s poorest countries live abroad, and the figure is as high as 80% in Haiti and Jamaica.
The brain drain is particularly acute in Africa, a continent that will need its educated professional class if it is to rise out of its post-colonial mire of poverty and corruption. But how can a country like Ghana cope with the challenge when 47% of its university-educated citizens live abroad? Things will also be tough in Mozambique, which has lost 45% of its educated class, and in Kenya (38%), Somalia and Angola (both 33%).

The list goes on. Indeed, there are more African scientists in the United States than in all of the 54 countries of Africa.

It is hard to blame students for fleeing their impoverished homelands for greener educational pastures when 90% of the world’s funding for research and development in higher education goes to the US, Britain, Australia, Germany and Japan. Developing countries simply cannot compete in the global contest for talent. In an age where, more than ever, knowledge equals power and wealth, this amounts to a new form of colonialism holding poor countries back.

While in sheer numbers the world’s most populous countries – China and India – appear to suffer the most from brain drain, studies show they lose only about 5% of their graduates. For China, however, that has become too much as it sorely needs the expertise of many of its citizens living abroad.

No doubt a Shanghai survey published this year in the Labor Daily has added to official concern. The survey showed that 36.9% of the city’s middle-school students hope to become US citizens one day.

UK Business looks to recruit Chinese students

Businesses are turning to MBA students from China because they believe too few British graduates have Chinese language skills, according to a report.

Meanwhile, staff at Liverpool John Moores University used graduation ceremonies this week to protest against the cutting of Chinese studies as part of a reform of its language school.

Forty-one per cent of business leaders surveyed by the Hay Group consultancy said they planned to recruit Chinese MBA graduates.

Universities produce fewer than 500 graduates a year from programmes in which Mandarin forms a substantial part and the report’s authors said the lack of linguists would lose the UK opportunities in the Chinese market.

Deborah Allday, one of the authors, said: “We are about to face a war for talent both in China and in domestic markets as companies scramble to recruit talented leaders and managers with an understanding of the Chinese market and business culture.

“The British government needs to take a fresh look at the higher and further education curriculum in this country to determine the best way to make UK graduates and UK plc competitive in the global market place.”

She said companies should demand that all MBA students they fund should do a China module on their course and that the government should introduce more Chinese language teaching.

The study, based on interviews with business leaders in Europe, north America and Asia Pacific, found that British business expects sales to China to be worth 10 per cent of their global revenues by 2009.

Managers at Liverpool John Moores decided to drop courses in Chinese to concentrate on those in higher demand and with greater growth prospects.

Don Starr, president of the British Association of Chinese Studies, said: “It is a very resource intensive subject to learn and it is therefore expensive to teach. Because the funding does not recognise that extra cost, vice-chancellors find it cheaper to offer subjects like English and psychology that can be taught in large lecture theatres.”

The school system was compounding the problem, he added.

“Private-sector schools have been introducing Chinese in large numbers but the government has allowed 14-year-olds in state schools to drop languages entirely.”

The Higher Education Funding Council for England said it would work to find alternative universities for the 15 places that will be lost each year.

Teresa Tinsley, assistant director of the National Centre for Languages, said that although the number of people taking A-levels and GCSEs in the subject had steadily increased, the overall number still remained tiny.

“It is alarming that employers are turning to foreign students with Chinese language skills because that will make them less likely to tackle the shortage of UK nationals,” she said.

China hot on UK skills’ heels

The UK must educate its workforce to compete in the global knowledge economy, writes Lara Williams

A skills crisis in the software development sector could seriously damage the UK’s ability to compete globally, according to the second of the Microsoft-commissioned Developing the Future (DtF) reports published last week.

The IT industry is growing five to eight times faster than the national average and needs 150,000 new entrants each year. But the number of students taking A-level computing has dropped 43 per cent from 2001 to 2006, and IT-related degrees almost halved ­ from 27,000 to 14,700 ­ between 2001 and 2005.

Technology skills are vital to the growth of the UK as a knowledge economy ­ one relying on high-level skills rather than a manufacturing base or large pools of cheap labour.

At the moment the UK knowledge economy accounts for 41 per cent of gross domestic product, but the proportion is expected to rise to 50 per cent by 2010.
And without the right skills, the country will not be able to compete with overseas rivals. But it is not only established economies making the transition.

At the current growth rates China will surpass the UK in the near future, says Microsoft UK managing director Gordon Frazer, who is also a board member of sector skills council e-Skills UK.

‘The shift towards the knowledge economy in the UK presents great opportunities but we must be aware of the skills challenge,’ said Frazer.

The DtF warnings are not new. Only last month a government advisory group, the Information Age Partnership (IAP), released a report calling on government, industry and academia to work together to meet the needs of the EU i2010 knowledge economy agenda.

The IT industry does not simply need more people, says e-Skills UK chief executive Karen Price.

‘Whether I am talking to the IT industry or the chief information officer community, they are all telling me it is not the shortage of people but developing the right skillset to compete in the global marketplace,’ she said.

UK universities remain world-class at producing traditional computer scientists for research and development roles, says Price. But there are also vital non-technical requirements.

‘The new market opportunity is people combining business and technology skills and that is where the growth and skills shortage lies,’ said Price.

The private sector has a central role to play, says Paul Smith, managing director of offshore software development at recruitment consultancy Harvey Nash.

‘If each decent-sized company were to commit to providing excellent on-the-job training today, sponsoring students next year and working with a partner university on designing and funding a vocational course, the UK would be back on track in five years’ time,’ he said.

DtF recommendations include: a curriculum review of IT teaching in schools; encouragement to large software companies to enhance their education programmes; and pilots to establish how to form effective links between industry and academia.

Ahead of Olympics, China faces charges of child labor

Beijing – When a British-based labor consortium charged this week that factory workers as young as 12 are toiling to produce gear and souvenirs licensed by Beijing for its 2008 Olympics, China’s reaction was swift.

Beijing officials announced they would deal “seriously” with factories that violate China’s “very strict” labor codes. But the negative publicity – along with other reports that the problem goes beyond production of Olympic-related memorabilia – comes at a sensitive moment for Beijing as it seeks to burnish its international image ahead of the games.

Some observers say that the latest reports represent a weak point in China’s otherwise strong record of enforcing child labor laws – especially at a time when child labor is on the decline worldwide.

Playfair Alliance, which targets sporting goods and athletic merchandise, reported this week that child labor in China is not limited to a few factories making Olympic souvenirs but may be a growing, potentially widespread problem spurred by increasing labor shortages and rural poverty.

Another survey report from the Hong Kong-based China Labour Bulletin, which investigated a growing underage labor force in several small towns, found that poorly funded rural schools and a higher-than-recorded school dropout rate are forcing many children to work before the law allows.

In small towns across the vast Chinese countryside, kids age 13, 14, and 15 – below the legal working age of 16 – are entering the workforce as factory owners and other employers turn a blind eye, according to the report.

“Looking at the results of our on-site surveys, and reports in the Chinese media … we do not believe that the child labor problem in China has been suppressed that effectively,” said the China Labour Bulletin’s report.

A 2006 study from the International Labor Organization (ILO) said that overall, child labor has been reduced by 11 percent in the past four years worldwide.

Despite the recent studies, conclusive figures aren’t available in China, so no true comparison is possible. The Chinese government considers the topic too sensitive to allow international groups to conduct widespread national investigations of how many under-age workers appear in the labor force.

With the problem not yet quantified, labor-rights groups are relying on bits and pieces of information they can gather by interviewing factory workers, families, and school authorities. The anecdotal evidence shows increasing pockets of child labor, especially in the poorest areas and in factories that operate as subcontractors to major producers.

“We haven’t done a national study, but the assumption is that this is a national problem and therefore deserving of attention from the national government,” says Robin Munro, research director of China Labour Bulletin.

Some officials doubt reports
Even with the new charges regarding Chinese child labor infractions, some officials doubt the credibility of the China Labour Bulletin report. Constance Thomas, director of the ILO for China and Mongolia, says that without a thorough, conclusive study of the national scope of the problem, no one knows for sure what’s happening. Ms. Thomas has been trying to convince the Chinese government to undertake a major prevention campaign, but the mere mention of child labor has been too sensitive.

Thomas says she doesn’t see a widespread problem, especially when comparing China with countries like Pakistan and India where children age 8 and 9 are routinely found working. China’s doing pretty well, she maintains.

“We’re not picking up yet on any large numbers of child labor; we’re just not,” says Thomas.

However, she says, “There are pockets of child labor, and my concern is that they may be growing.”

There are “magnet factors” that could lead to a growing reliance on child labor, Thomas says, and China, with its previous track record in avoiding child labor, should address them. The three magnets, she says, are pockets of labor shortages, increasing numbers of privately owned business, which are more prone to unscrupulous hiring, and the huge mobility of the nation’s workforce.

Migrant work contributes to problem
China has as many as 200 million migrant workers who have left hometowns and provinces to fill its factories. At least 20 million of their children have been left behind with relatives and the kids are often forced to work when they reach their teenage years. Those who travel with their parents face prohibitively high school fees that can make work seem a more plausible option.

China needs to play to its strengths, says Thomas and others. For one, its standards are higher than the ILO’s, which considers anything under age 13 child labor. The Chinese government has set its minimum working age as 16, with limited working hours, or 18, for dangerous jobs with longer hours.

Anita Chan, a China labor scholar at Australian National University, says quantifying the child-labor problem is difficult, particularly when the country is having a difficult time enforcing labor standards for adults. In any case, she says, the country should stay firm to its strict anti-child labor laws and enforce them. Certainly, she says, government officials must realize that in addition to giving a country political problems, child labor can have basic economic consequences.

“If you hire a lot of children, the grown-ups won’t have jobs,” says Ms. Chan.