Party committees, governments and officials at all levels should respect knowledge, talent and creation, follow the law of scientific development, and push for sci-tech innovations and their transformation into productive forces,” said Chinese President Xi Jinping at a symposium for scientists in Beijing last year.
China has recently doubled down on a bold and ambitious plan to become a leader in science and technological innovation under its 14th five-year plan (2021-25). It also has its eyes on semiconductors.
The available resources on the 14th five-year plan suggest that recruitment of foreign talent – both at home and abroad – will be a crucial policy goal.
“We should implement a more open talent policy and build a high ground for scientific research and innovation that gathers excellent talents at home and abroad,” says Chapter 6 of the 14th five-year Plan. The entire chapter is dedicated to the topic of talent in innovation economy.
“We will enhance the capacity of enterprises to make technological innovation, unlock the creativity of talent, and improve the systems and mechanisms for making scientific and technological innovation,” said Chinese Premier Li Keqiang in March 2021.
Li Keqiang also added that China will explore “science and technology immigration” under the new plan. Xi Jinping had already revived the “dual circulation” strategy to leverage domestic capacity to pursue opening up to global markets in 2015.
But Donald Trump administration’s campaign against Huawei and several other policy decisions to restrict China’s access to US intellectual property has revealed a key vulnerability faced by Beijing’s technology ambitions: talent, or human resource.
Talent is the Achilles heel of China’s technology ambitions.
A worldwide talent and info programme
China has continued to pursue a strategy of innovating on top of intellectual property secured through espionage activities. The Thousand Talents Programme is an example.
China’s Overseas High-Level Talent Recruitment Programme or the Thousand Talents Programme was started in 2008 to establish partnerships with key foreign scientists and experts. A US Senate committee has claimed that it is one of the 200 programmes targeted at recruiting foreign academics and experts to secure strategic intellectual property.
An academic who enters a contract with the Thousand Talents Programme is supposed to jointly develop intellectual property with a Chinese institution. Chinese companies and State-owned enterprises have signed contracts under the programme with experts at universities in Canada, UK, US and some countries in Europe.
The institution where the expert is employed may, at times, not even be aware of the existence of such a contract between their employee and the Chinese. The US has charged multiple individuals for not disclosing their association with the Thousand Talents Programme.
Until 2018, the recruitment of foreign talent was conducted through the State Administration of Foreign Experts Affairs (SAFEA), which was an agency directly under the State Council of China. The National People’s Congress decided to merge SAFEA into the Ministry of Science and Technology after allegations of intellectual property theft and espionage were directly levelled at the Chinese agency. SAFEA was involved in the recruitment of US scientist Noshir Gowadia, who is said to have shared missile technology with the Chinese agency.
China has since scrubbed the existence of the Thousand Talents Programme from some of its government websites.
The other talent programmes hire top researchers, scientists, and engineers to work for companies in mainland China. But the country has had only limited success at convincing top talent to move their base to mainland China.
Shanghai has over 215,000 foreign workers, which accounts for 23.7 per cent of the total population of foreign nationals working in China, according to Chinese state media.
Hand-tied innovators and experts
Despite the common rhetoric, not all innovation in China results from intellectual property theft.
Chinese companies have been getting good at innovation, as the case of drone-maker Da Jiang Innovations (DJI) exemplifies. But these companies heavily rely on international talent to supply and improve their products.
Even Huawei is reconfiguring its business strategy by moving its focus to cloud computing, smart cars, and other software services. Huawei has launched an operating system called Harmony OS to reduce reliance on Google’s Android operating system. Huawei’s foray into the software world comes with a surmountable challenge, including the need to attract the best talent to develop and improve their services. Apple and Google’s widespread use was possible because of an ecosystem of developers that supported the growth.
“I think Chinese developers are doing development work with one hand tied behind their back,” said D.C. Collier, a Shanghai-based start-up founder, in an interview with Tech In Asia.
TikTok and other companies that have entered the global technology landscape were able to develop applications with a global network of offices. The general suspicion about the operation of Chinese companies around the world has made recruitment of talent tough.
Xi Jinping has sought to impose strict control on the private sector by establishing party committee branches within private companies.
“Party leadership is the fundamental political guarantee of advances made in the cause of scientific innovation with Chinese characteristics,” Xi Jinping said in 2018.
The recent investigation into Jack Ma’s Ant Group financials shows that Xi Jinping can go after homegrown giants if needed.
Tsinghua University has recently announced a new semiconductor research-focused department to train semiconductor engineers. Developing a homegrown semiconductor industry and reducing reliance on foreign suppliers is one of the recommendations in the 14th five-year plan.
China has had a successful run with a strategy that mixes industrial espionage with talent recruitment to acquire strategic intellectual property. But repeating the success of that strategy will be very difficult.
China is then left with domestically trained experts with little interaction with the outside world. The way forward for China’s rise in the science and technology supply chain looks a bit tricky.
The author is a columnist and a freelance journalist. He was previously a China media journalist at the BBC World Service. Views are personal.
(Edited by Neera Majumdar)