Visitors at the Overseas Chinese Students Week in Dalian, North China's Liaoning Province, on June 27. Photo: Courtesy of the Organizing Committee of Overseas Chinese Students Week


Zhang Qun came to Dalian, Northeast China's Liaoning Province, in 2009 after studying in Japan and working in the US, and established Intesim Co, a firm specializing in computer simulation technology.

Zhang was awarded for being one of the top returned talents by the Dalian city government in 2011. He was also offered 2 million yuan ($320,000) in funding for his company, as well as a 100-square-meter office and a 100-square-meter apartment in the Dalian High-Tech Industrial Zone, which are rent-free for three years.

After he mentioned the need to integrate an industrial chain in the zone, he was given access to a 1,000-square-meter area to establish a pioneer park that could gather his peer companies together, and was offered help in arranging meetings and large-scale industrial conferences. 

His company also benefits from the marketing channels provided by the zone to expand the market.  

"The possibility of success is much higher for us with their support," Zhang said.

Zhang is among the growing number of overseas returnees who are attracted by China's favorable policies and its huge market potential.

National focus

Amid the global competition for skilled workers and talented graduates, China has suffered something of a brain drain for decades. From 1978 to 2008, only 28 percent of its students returned to China after studying abroad.

The Chinese government noticed the exodus and implemented several favorable policies in terms of funding, preferential tax rates, residence, family placement and children's schooling to reverse the trend, encouraging high-end overseas students to return with their projects and set up firms.

Local governments have also been aware of the importance of overseas returnees and offered good conditions in order to entice more of them. 

By the end of 2011, China had set up more than 160 pioneer parks for overseas returnees nationwide, in which over 8,000 enterprises have been set up, with 20,000 employees.

Moreover, a series of national fairs are held every year as a platform to connect overseas students with local government agencies, universities and enterprises. 

With all these efforts, a rising number of overseas students have chosen to come back. From 2009 to the end of 2011, 429,200 overseas students returned to China, accounting for half of the total number of students going abroad for further education during the same period, according to statistics released by the Ministry of Education.

In 2011 alone, 339,700 students went abroad to continue their studies, a 19.32 percent increase from the previous year. Meanwhile, the number of returnees rose by 38 percent to a total of 186,200 in 2011.

"We also have policies to attract overseas returnees with permanent residence permits and multi-entry visas for them and their families," said Wang Xiaochu, deputy minister of human resources and social security.

Started in 2008, China's Recruitment Program for Global Experts has attracted 2,263 experts, 445 of whom have established companies that last year produced a total revenue of 63.2 billion yuan and paid a total tax of 9.86 billion yuan.  

China also passed a new "talent introduction" visa system Saturday in an effort to attract a larger number of skilled professionals from abroad.

---

Big opportunities

Chen Datong, who returned from the US to start a handset chip company called Spreadtrum in 2001, said that emerging markets, primarily China, have made it possible for entrepreneurs to test their ideas in the past 30 years.

"When there are several companies developing the same product globally, maybe you can be the first in China. This is a very good opportunity for overseas returnees, and it would be unlikely to appear without emerging markets," Chen said. 

Zhang Qun said many of his friends have returned or are planning to come back because "the Chinese market is big, with many opportunities, and we can grow with the market."

Returning home also means his technologies belong to China, which is his homeland, Zhang said.

With local governments offering similarly favorable policies, Zhang chose Dalian to start his business due to several considerations.

"The startup costs in Dalian are one-third to half of those in Beijing and I can find the human resources I need here," he noted. "Also, the mature equipment manufacturing industry in Northeast China offers the market for my company."

"Most overseas returnees have developed technologies and worked for Fortune 500 companies, which is to their advantage," Chen Datong said. "However, they are not necessarily good at selling products or running companies. They should know their weaknesses and understand the local markets to be successful." 

More work needed

Silicon Valley in the US became a famous incubator for startup businesses largely because of a sound venture capital system. But financing is one difficulty for overseas professionals in coming back to China, said Wang Ercheng, deputy head of the Organization Department of the CPC Central Committee.

Liang Wenchao came back from the US to start a company specializing in LED (light-emitting diode) technology in Dalian in 2011.

LED technology has developed for decades in the US but is still relatively new in China, which means there are big opportunities, Liang said.

"However, there is little funding here despite support from the local government."

His project needed 15 million yuan to get going, but Dalian High-Tech Industrial Zone could only offer 2 million yuan in initial funding, far from meeting his needs. Luckily, the zone helped him find a private entrepreneur to invest 8 million yuan in his project.

"It is the business environment that matters in attracting overseas students, and China has a poor environment for starting companies," said Gan Jianping, managing director of Qiming Venture Partners.

He said that government controls should be reduced to the minimum level so that entrepreneurs can fully capitalize on their ability. 

Wang Ercheng said that the government cannot do everything for the startups and enterprises ultimately rely on the market for development, so China needs to further improve the market system and create a fair environment for these enterprises.

As local governments compete for high-level professionals with various preferential policies, ordinary returnees sometimes feel neglected.

Du Yang, an engineering student who graduated from an Australian university, came to a fair held for overseas students in Dalian on Friday, but saw the recruitment area filled with relatively small and unknown companies, while the top enterprises in the negotiation area only welcomed people who came with big projects or advanced skills. 

"The fair seems not so useful for people like me, but ordinary overseas students are the majority and we also need encouraging policies," Du noted.