Why My Chinese Employees are Leaving… by Wesley R. Gray, Ph.D., Alpha Architect

WSJ recently published an interesting article named “The Self-Inflicted U.S. Brain Drain:”

Every year, tens of thousands of disappointed tech workers and other professionals give up while waiting for a resident visa or green card, and go home—having learned enough to start companies that compete with their former U.S. employers…. The U.S. no longer has a monopoly on great startups. In the past, the best and brightest people would come to the U.S., but now they are staying home.

“Companies like Alibaba and Tencent are a warning signal that it is almost too late. Either we get back to picking off the best and brightest STEM talent in the world, or someone else will.” — Vivek Wadhwa, the author of book “The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent”

The US is currently a magnet for the brightest talents from all around the world. For example, every 3 in 10 students at MIT are non-US-citizens or permanent residents and 17 out of 25 largest tech companies in the US are founded by immigrants (click here to read post).

However, the US is no longer the exclusive and unique platform for these talents.

The Chinese Approach to Talent Acquisition: PAY THEM OFF

We employee/partner with a handful of Chinese nationals who also happened to be my students while I was a professor at Drexel University. They are truly the cream of the crop, but trying to employ them in the States is extremely expensive and a paperwork nightmare, thanks to the US Government.

I’m worried that China is going to inspire my Chinese friends to come home quickly to mother China by offering them up to $500k in cold hard cash to return.

We pay market wages and have a great culture and work environment, but we certainly don’t have $500k checks we can dump on my teammates.

Let’s review some policies and data from Chinese government that relates to efforts to attract Chinese talent (translated by Tao Wang):

Main Requirements:

  • master degree or higher
  • have over 3 years experience overseas at research or management level
  • bring technology, projects, own funds (over $90k ) and start business in Jiaxing

Main Benefits:

  • local government provides fund ranges from $160k to $500k
  • for R&D projects, free office provided no smaller than 1,000 sqft for 3 years.
  • any capital gain tax incurred within the first three years will be refunded back for further R&D or business expansion.

Some other benefits including subsidies for 50% on a new residential home.

The new plan has not fell on deaf ears:

Between 1990 and 2010, the Ministry of Education spent close to $98 million in seed funding for about 20,000 returnees.

The basic formula, as told by my Chinese employees/partners is as follows:

  • Educated in the US.
  • 3 years of full-time experience in the US.
  • A $500k blank check to start a business when you come back home to the mainland

Not bad!

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Self-Inflicted U.S. Brain Drain: Why My Chinese Employees are Leaving