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Qiu Zhenhai: China Desperately Needs More Cutting-Edge Talent

Posted 2014-7-4

The provincial college entrance exam scores have been announced, signifying that another group of young students will soon enter college. China’s entrance-exam based educational model is often debated and is seen by many as controversial. Does China’s current education system maximize talent effectively? Does it encourage and cultivate the most competitive talent?

In fact, according to the Ministry of Science and Statistics, China seriously lacks top talent. In China, there are about one million people that could be called high-end talent. The United States has at least ten times more the amount that we do. We lack talent in many cutting-edge fields, including aviation. We are a large country and have the second largest aviation market after the United States, as well as a huge automobile industry, however, we have few scholars either of those fields.

The loss of talent is an even more important issue. The United States now has over 200 Nobel Prize winners working long-term in the US while China has a chronic shortage of Nobel Prize scholars. In addition, according to a survey done by McKinsey, 75,000 top-level professional managers are currently needed in the Chinese market, but how will these professionals be found? There are currently only 5,000, which is more than ten times less the demand. When compared with China, the United States has a considerable advantage in this. US companies account for the majority of the world’s Top 500 companies and the US holds considerable talent reserves.

These reserves include the university talent pools, the government’s talent pool and the talent pools of scientific research institutions. Silicon Valley, the world’s center for innovation, is a good example. We see many high-tech, new innovations come from Silicon Valley, a place in which 50 percent of enterprises are created by immigrants. In fact, 47 percent of the US’s medical scientists were not born in the United States.

In the next 25 years, China’s demand for talent will only increase. China has a large population: currently four times larger than that of the United States. Because of this, after ten years, China will need 1 million high-talent professionals. For China to become a world superpower, we must rely on talent to support it.

However, Chinese talent is constantly draining. Take students, for example. According to official statistics, there are about 2.6 million students studying abroad and about one million returnees. Therefore the rate of return is about 30 percent to 40 percent. This means that about 60 percent of the students stay overseas, which is a relatively large ratio. Internationally, the common ratio is about 40 percent to 50 percent, which seems more appropriate. The majority of Chinese students, however, stay overseas. The proportion of high-end talent that stays overseas is even larger. More than 90 percent of students who earned science and engineering doctoral degrees chose to stay overseas. According to the latest statistics from the Ministry of Education Service Center, those who had studied past a master’s degree, including one-year master’s degrees from the United Kingdom, had a return rate of only 5 percent.

The pace of China’s economic development has slowed and its population surplus is declining. China now has the opportunity to transform itself: from a population surplus to a talent surplus, from “Made in China” to “Innovated in China,” from investment-driven to talent-driven. All of these goals rely on talent. China now mainly relies on exports, and these exports are not high-tech. China should grow to depend on science instead of depend on labor. However, if the current brain drain continues this goal will be difficult to achieve.

If there is a population surplus and a talent surplus and the two decline at the same time, what will China look like in ten years’ time?

Here is an example. In the past few years, China’s number of enterprises in the world’s Top 500 businesses has increased. Originally, China only had a few companies on the list, but this later increased to more than a dozen, then to two dozen and then to sixty or seventy in 2013. However, despite being among the most powerful companies in the world, only a tiny number of companies can truly hold shares in the international market and benefit from globalization. The small number of truly powerful companies only include companies like Lenovo and Huawei. An important reason behind this is China’s lack of top ranking international talent like international Top 500 company executives.

China’s is facing a difficult road ahead. China’s economic development is difficult as well. Domestically, different value chains are rising, and the high-tech industry is developing. This creates a need for high-end talent, especially talented entrepreneurs.

We have been successful in these past 30 years because we increased mobility with domestic labor laws and reduced barriers to labor globalization and nationalization. This nationalized population includes two hundred million migrant workers. The flow of these migrant workers has brought about economic prosperity. In the next 30 years we must rely on globalization and the flow of high-end talent. We must attract the surplus of global talent to China and become more attractive to talented Chinese who study overseas. We must also attract international talent from other countries to China in order to support the next 30 years of China’s development.

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