From: lessgovt@gmail.com   
      
   China’s Brain Drain Threatens Its Future   
   By Nathaniel Taplin, July 5, 2023, WSJ   
   Is China reopening to the world or turning inward again?   
      
   Many would argue the latter, but in one important way, the country is still   
   going global: Residents appear to be leaving at a faster clip than they have   
   in years, including a significant number of the wealthy and well-educated the   
   nation needs to keep    
   modernizing and investing.   
      
   Rising numbers of footloose Chinese in 2023 shouldn’t be a surprise. Getting   
   out of the country is easier again now that pandemic controls have been   
   dropped. But 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.   
      
   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.   
      
   China, unlike the U.S., has always been a nation of emigrants—its diaspora   
   is among the world’s largest and most influential.   
      
   But 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.   
      
   But 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. Although those numbers dropped back again   
   during the pandemic,    
   the latest U.N. forecast puts net emigration in 2022 at over 300,000 again,   
   after a net drain of about 200,000 in 2021.   
      
   Strikingly, the U.N. data actually lines up surprisingly well with data from   
   private sources looking at a more specific demographic—the wealthy. Data   
   collated by South Africa-based New World Wealth and Henley & Partners, a   
   London-based investment    
   migration consulting firm, show a similar pattern. 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.   
      
   Henley and New World Wealth don’t have figures for 2020 and 2021, although   
   emigration almost certainly dropped back during those years thanks to   
   China’s initial success at controlling Covid-19. But the consultants   
   estimate 13,500 wealthy individuals    
   will, on net, leave China this year, following a 10,800 person net drain in   
   2022.   
      
   Of course, net emigration isn’t necessarily a bad thing, and it has often   
   played a critical role in China’s development. 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.   
      
   But 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. 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.   
      
   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.   
   The pandemic is clearly a major factor. But given the well-publicized rising   
   tensions between China and the West, slowing growth and the rising risks of   
   detention and    
   investigation for what used to be considered routine business by foreigners in   
   China, a portion of that decrease seems very likely to persist.   
      
   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.   
      
   Some people, at least, seem to be voting with their feet.    
      
   https://www.wsj.com/articles/chinas-brain-drain-threatens-its-future-dbe38096   
      
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