Published daily by the Lowy Institute

The new Chinese diaspora

The skills these individuals pick up in Western countries help to plug gaps created by well-known shortcomings in China’s education system and corporate culture.

Chinese students at a summer program at the Hill School in Pottstown, Pennsylvania (Photo: Flickr/Montgomery County)
Chinese students at a summer program at the Hill School in Pottstown, Pennsylvania (Photo: Flickr/Montgomery County)
Published 31 Mar 2017   Follow @J_B_C16

Recently in Berlin, I was discussing the local tech sector with a young woman who was born in Shanghai, went to university in the UK and now works at an internet services firm with offices in Berlin, Beijing and San Francisco, between which she regularly commutes. She typifies a new and globally mobile class of diaspora Chinese: students, professionals and entrepreneurs who maintain close personal and professional ties to China while residing abroad.      

In another post, I looked at the role of the ‘old’ diaspora – the long-established Chinese populations of ‘greater China’ and Southeast Asia – in reform-era China’s development. But perhaps more important today is the ‘new’ diaspora, high-skilled and born in mainland China, who are at the forefront of China’s transition to a knowledge-intensive economy. These people are the face of China’s new globalisation, forging links with foreign economies that are more entwined than a simple export-import relationship.     

The ‘old diaspora’ has played a part in China’s move towards a higher value-add and service-oriented economy, from the Taiwanese engineers who transmitted knowledge from Silicon Valley to China’s budding infotech sector, to Singapore’s role in bilateral projects such as the Guangzhou Knowledge City. Now the ‘new diaspora’ is rising to prominence through a confluence of factors. On the demand side is the Chinese state’s redoubled effort to close the technological gap, and in some fields to surpass the advanced economies. On the supply side is China’s huge expansion of tertiary education and the growing ranks of Chinese alumni of foreign universities, many of whom have built successful academic or business careers overseas.       

The ‘old diaspora’ had its heyday in the first two decades of China’s reform era, when the country needed foreign capital along with the access to foreign supply chains and markets that Hong Kong, Taiwan and the Southeast Asian Chinese could provide. Now the need is for foreign outlets for mainland Chinese capital, and for technologies and management experience held by industry-leading firms which remain concentrated in Western countries. The high-skilled Chinese diaspora in these countries is ideally placed to mediate the two-way flow of funds and information.   

A decade ago such individuals had already been christened the ‘new argonauts’, seeking wealth in a transnational economic space created by digital communications and cheap air travel. Unlike previous generations of migrants, they are able to keep a foot in two (or more) countries, with their high education levels opening opportunities that they exploit through sustained cross-border interactions. This phenomenon is now so pervasive that one recent report calls for the concept of ‘brain drain’ to be replaced with ‘brain circulation’, recognising that skilled migrants now engage in continuous exchanges between their origin and adopted societies. They are the sinews of the world’s ‘new type of hyperconnectivity’

This is especially true for the infotech and internet services sector, in which Chinese firms show potential to be global leaders. A case in point is the search engine giant Baidu, which has developed an industry-leading artificial intelligence (AI) project, split between laboratories in Beijing and Silicon Valley. The firm’s co-founders both received their postgraduate education and foundational work experience in the US, as did its current chief operating officer (previously with Microsoft) and former Big Data Lab director (now working for Tencent); the recently resigned head of Baidu’s AI project is also a product of the US college system, with parents from Hong Kong and a secondary education from Singapore.  

China’s successful Internet firms are aggressively poaching talent from foreign competitors, focusing on Chinese-born engineers and researchers. These firms are increasingly co-locating and co-funding between China and Silicon Valley, where non-US citizens now make up half the core workforce and Chinese is the most spoken foreign language after Spanish. And Chinese expatriates and diaspora members are at the forefront of other countries’ moves to tap China’s booming startup scene, an example being Australia’s push for greater cross-border industry collaboration.  

The skills these individuals pick up in Western countries help to plug gaps created by well-known shortcomings in China’s education system and corporate culture. And over the last decade they have been returning to China in growing numbers, reflecting the general trend for a rising percentage of Western-educated foreign postgraduates to return to their origin country, or at least to make professional commitments there. Beijing’s long-running incentive schemes to attract home skilled émigrés have started to show some notable results, helped by the pull of an economy and innovation system that now offers opportunities comparable to those in developed countries.

Ducking the bamboo ceiling

‘Push’ factors likely include weaker job markets in Western countries post-2008, sclerotic immigration policy (which at least in the US has led to a drop in foreign talent retention) and a ‘bamboo ceiling’ limiting career advancement for people of Asian ethnicity. For those working in sensitive fields there are also fears about racial profiling, fanned by a spate of espionage prosecutions against ethnic Chinese researchers in the US, most of which ended with all charges dropped. This trend is starting to raise shades of the McCarthyist era, with potential adverse consequences for the host country: in 1955, the US deported on suspicion of espionage the Hangzhou-born Caltech engineer who became the father of China’s missile programs, an act described by one Pentagon official as 'the stupidest thing this country ever did'.  

Given the growth of transnational business and research networks, concerns about ethnic Chinese residents as potential subversives will become increasingly prominent. Western multinationals are locating a growing share of their R&D work in China, and Chinese firms are increasingly setting up R&D centres in Western countries. The new millennium has seen a steady rise in cross-border research collaboration, with China now a leading source both of published research and of students for Western universities; foreigners now earn over half of doctoral degrees awarded in engineering, computer and information sciences in the US, where one in three international students is from China. In the face of rising anti-immigration sentiment, academia and industry are warning that inability to keep such people will undermine US technological leadership; even the US cannot produce enough homegrown talent for the tech sector, let alone smaller advanced economies like Australia.  

Yet the rise of this transnational Chinese ‘creative class’ is paralleled by Beijing’s trend towards being ‘more repressive at home and more assertive abroad’, including a renewed push for the ideological loyalty of its citizens, alongside new goals to raise domestic content levels in China’s manufacturing and to reach the technological frontier in strategic industries. Patriotic mores are being expressed more forcefully by Chinese nationals overseas (exemplified in the ‘little pink’ movement), which generates tensions with host societies, including ethnic Chinese of different backgrounds and views. And the growing focus of Chinese outbound investment on technology acquisition is raising concerns in Western countries about building up the competition.    

In the 1980s-90s, the ‘old diaspora’ helped fuel China’s emergence as the Asia Pacific’s manufacturing hub, setting in train a shift in the region’s political balance of power. The new Chinese diaspora is at the heart of a transformation that may have still more profound consequences. At a time when the premises of globalisation are increasingly under siege, this group of people – quintessential products of a globalised world – will likely loom ever larger in relations between the developed countries and a rising China. 

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