Why My Chinese Employees are Leaving…

Why My Chinese Employees are Leaving…

November 22, 2014 Uncategorized
Print Friendly
(Last Updated On: January 18, 2017)

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.

Victory is Reserved for Those Willing to Pay the Price. — Sun Tzu

 

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!

 

 


Note: This site provides no information on our value investing ETFs or our momentum investing ETFs. Please refer to this site.


Join thousands of other readers and subscribe to our blog.


Please remember that past performance is not an indicator of future results. Please read our full disclaimer. The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Alpha Architect, its affiliates or its employees. This material has been provided to you solely for information and educational purposes and does not constitute an offer or solicitation of an offer or any advice or recommendation to purchase any securities or other financial instruments and may not be construed as such. The factual information set forth herein has been obtained or derived from sources believed by the author and Alpha Architect to be reliable but it is not necessarily all-inclusive and is not guaranteed as to its accuracy and is not to be regarded as a representation or warranty, express or implied, as to the information’s accuracy or completeness, nor should the attached information serve as the basis of any investment decision. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission from Alpha Architect.


Definitions of common statistics used in our analysis are available here (towards the bottom)




About the Author

Wesley R. Gray, Ph.D.

After serving as a Captain in the United States Marine Corps, Dr. Gray received a PhD, and was a finance professor at Drexel University. Dr. Gray’s interest in entrepreneurship and behavioral finance led him to found Alpha Architect. Dr. Gray has published three books: EMBEDDED: A Marine Corps Adviser Inside the Iraqi Army, QUANTITATIVE VALUE: A Practitioner’s Guide to Automating Intelligent Investment and Eliminating Behavioral Errors, and DIY FINANCIAL ADVISOR: A Simple Solution to Build and Protect Your Wealth. His numerous published works has been highlighted on CBNC, CNN, NPR, Motley Fool, WSJ Market Watch, CFA Institute, Institutional Investor, and CBS News. Dr. Gray earned an MBA and a PhD in finance from the University of Chicago and graduated magna cum laude with a BS from The Wharton School of the University of Pennsylvania.


  • IlyaKipnis

    Yet another example of the possibility of a symbiotic relationship between government and the populace. A $500,000 seed funding from Uncle Sam with tax breaks, no questions asked, for anyone that’s educated and has a business idea? Yeah, if only.

  • Michael Milburn

    On the independent merits there should be a lot of public support for simply giving visas for anyone who gets a PHD and wants to stay and work and/or start a company, but for whatever reason it’s difficult (fatal?) politically despite being self-destructive to the country. I can’t recall the sources of the stories, but venture capitalists are eager to supply start-up funding if the visa issues can be resolved. The VCs say they often see ideas they’d like to support, but realize the individual(s) can’t stay in the U.S, and I assume there’s a lot of truth to it. A “comprehensive” immigration deal needs to be reached to move this issue along.