Stemming the brain drain

China is exporting more than just inexpensive toys and auto parts to the world's developed nations; it's also exporting perhaps its most valuable commodity, its future leaders and scholars. Millions of Chinese students have gone abroad for higher education but only a fraction have returned. According to a recent report titled On the Development of Chinese Talent in 2006 conducted by the Chinese Academy of Social Sciences, between 1978 and 2006 over one million students left China to study overseas but only 275-thousand returned after graduation.

Despite the economic miracle currently happening in China those figures should cause the communist government and big business concern. Despite an improving economy 70 percent of students are choosing not to re-enter the Chinese workforce. The report says the resulting lack of first class scientists and research pioneers is the main obstacle hindering China's innovation capability. The country's drive to move away from textile manufacturing and low technology items could suffer greatly with the loss of the foreign trained students. Currently, the school system is built around standardized testing with a heavy emphasis on math, science, and language. Creativity and innovation is stifled while repetition and test preparation is forced on students from grade school through university.

Western media is awash with stories of China's growing economic, political, and military power so it's hard to imagine why students would not want to return home and get in on all the good financial times. The reality of the situation is that for the majority of returning students the future is bleak and working conditions are nowhere near as comfortable as they are in developed western countries. The report offers many reasons for the brain drain such as huge economic and social gaps, low personal income, few employment advancement opportunities, poor working conditions, sub par research facilities, and a lower standard of living.

The difference in working conditions between China and many western countries is not lost on two former classmates. Liu Jing and Angie Yang studied hotel management in Holland together. Liu Jing returned to China after graduation and Angie Yang didn't. Liu Jing has a young daughter from a previous marriage and her mother was very sick when she graduated so she was forced to return. Angie Yang, meanwhile, didn't have as many family commitments and decided life abroad suited her better. Both women found work in hotel management in comparable jobs after graduation but their level of job satisfaction was quite different.

Angie Yang is the payroll coordinator at the Park Plaza Hotel in London and Liu Jing was the food and beverage sales manager at the five-star Kerry Center Hotel in Beijing. The first thing separating the girls work experience is salary. Angie Yang makes about 46-thousand US dollars a year. Liu Jing made only US $4800 a year. The cost of living is much lower in Beijing than it is in London but certainly not 10 times lower. With her family obligations to her parents and daughter Liu Jing was forced to stretch every Yuan and live in an apartment with her sister that many in the west would consider hopelessly below the poverty line. Angie Yang is easily able to afford living in a clean comfortable flat and even save for her future.

Liu Jing has since left the Kerry Center for a less stressful job closer to her home for the same amount of money but she still remembers how tough the working conditions were. "Oh god, I was so tired. I would work at least 12 hours a day and sometimes more. It was very stressful and my work would call me day and night even on my days off."

Angie Yang says she is quite happy with the way things are going. "The working condition is quite good, I have normal shift. I work 9:00-17:30 Monday to Friday and I'm off Saturday and Sunday. Meanwhile, I am quite satisfied with what I am earning as well. The salary is a slice higher than other jobs."

Overtime pay is a concept that is generally not practiced in China. Liu Jing says she was tired of working from morning to night and not getting paid for it. "In Holland I worked in several restaurants and they always paid me overtime. It was very fair." Angie Yang says she doesn't miss working long hours with no compensation. "Working conditions are very different. In China, you don't get paid for overtime. Many Chinese people work over 12 hours per day and get paid less; it is not fair that you put in so much effort get so little money. In London, you do get paid for overtime or take a lieu day off and you also get more employee benefits, as well. Nobody can force you to work extra hours without your permission."

The problem of overwork was recently highlighted in an extreme case out of Guangdong Province in Southern China. A 25 year-old software engineer by the name of Hu Xinyu with Huawei Technologies, a major telecom company, died in May of 2006 of what's been discovered as extreme fatigue caused by overwork. However, the cause of death listed by the hospital was bacterial encephalitis. The engineer's tragic death created a media stir in China. Before joining Huawei, Hu was described as an athlete and sports enthusiast. The incident triggered a public outcry - not because it was an exceptional situation among white collar workers - but precisely because it was so common. In his death, Xinyu has become a symbol for thousands of Chinese workers forced into this culture of overwork.

China's inefficient business and government models have created a system dependent on personal relationships known as "guanxi". The old saying "it's not what you know, but who you know," seems to be nowhere more true than in China. Angie Yang says it alone keeps her from returning to the Chinese workforce. "I felt that the most difficult aspect when working for Chinese company is the relationship called guanxi. For instance, if there are 10 employees in one company, eight out of 10 will have a certain relationship (such as being a cousin) with the owner. How can you work efficiently in this situation? They don't take any responsibility anyway. Obviously, this is not right place for me and too complicated as well."

Foreign owned companies in China are as guilty of the disparity in wages and working conditions as state owned enterprises. Many companies pay foreign experts as much as ten times or more than their Chinese colleagues. There is no easy answer to the Chinese brain drain problem. Higher wages means inflation and inflation is currently a larger threat to stability than losing the best and brightest to other countries. Don't look for a quick resolution to the problem. As with most economic issues look for the Communist government to move in small increments to address its current brain drain.