China's Brain Drain Threatens Its Future - WSJ - 0 views
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the trend of rising emigration actually predates the pandemic—and coincides with the emergence of several other important economic trends since 2017, including higher youth unemployment, the state’s renewed grip on the financial sector and an apparently structural downtrend in Chinese growth.
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Rebounding emigration is also striking in the context of a declining overall birthrate, and suggests that Beijing must do far more to convince talent, both domestic and foreign, that China is a good place to put down roots if it wants to avoid a steeper growth slowdown in the years ahead.
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China, unlike the U.S., has always been a nation of emigrants—its diaspora is among the world’s largest and most influential.
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the scope of emigration has been highly variable over time. For most of the early 2000s around half a million residents, on net, were leaving every year according to United Nations data. But after 2008 that number fell sharply—probably in part due to China’s strong recovery from the global financial crisis while the U.S. and other major economies struggled. The early 2010s, a period of strong Chinese growth, also coincided with the slow erosion of China’s working-age labor force, creating opportunities for both ambitious Chinese citizens and foreigners willing to relocate there.
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by the late 2010s, this trend had begun to reverse. Net emigration from China, which had fallen as low as 125,000 in 2012 according to U.N. data, had rebounded to nearly 300,000 by 2018
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Net outflows of high net-worth individuals (with more than $1 million in assets) from China were steady at around 9,000 a year for most of the early 2010s. But in the late 2010s, that number started rocketing up: In 2017, net emigration by the wealthy was over 11,000 individuals, and by 2019 it was more than 15,000.
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Higher numbers of wealthy individuals leaving could indicate faster wealth creation itself—and ambitious emigrants can help facilitate flows of capital and technology back to China.
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this latest emigration wave is also taking place at a time of weakening growth and an increased populist tilt by Beijing. It is also happening during a fast rise in postsecondary education that is creating a growing supply of credentialed workers. Those same workers are facing anemic job growth in the service sectors where many of them would find employment
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Since 2017, average annual service-sector employment growth has been just 0.4%, according to figures from data provider CEIC. Excluding 2022, when much of the economy was shut due to Covid-19 lockdowns, only moves that average up to 1.4%. In the five years through 2017 on the other hand, service jobs grew an average of 4.4% a year.
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Rising net emigration also mirrors much smaller influxes of foreign talent in recent years—another trend that threatens to slow China’s climb up the technological ladder. Foreign residents of Shanghai and Beijing numbered just 163,954 and 62,812 in 2020, according to official data, down 21% and 42%, respectively, since 2010.
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For much of the new millennium, China has been a place where the ambitious, hardworking and lucky could often get ahead. But in today’s China—more focused on security and control, less on growth—it is no longer clear how true that really is.