Brains Down the Drain

by Bill Dodson

The recent convictions in Chinese court of two overseas Chinese who carried passports from Western countries have thrown a wet blanket over the heat foreign direct investment into China has created the past seven years. Stern Hu, an Australian citizen, was convicted in February this year of bribery of and by Chinese steel mills involved in negotiations with Mr Hu’s employer, Rio Tinto, over discounts on the annual benchmark pricing of iron ore mined from Australia. And during the first week of July Chinese courts convicted Xue Feng, an American geologist, to an eight-year prison term on charges of illegally obtaining state secrets related to the oil industry. China is sending two clear messages in the convictions: overseas Chinese who return to the motherland with foreign passports and foreign employers are no safer from arbitrary arrest and detention than the country’s own citizens; and China will stop at nothing to protect the interests – no matter how picayune – of what it designates as “pillar” or strategic industries. Other industries that have the distinction of being central to the development and security of the Chinese economy and nation include aerospace, automobile, and, yes, renewable and clean energy technologies.

The central government, however, is clearly unaware of the undertone of the message it is beaming out to well-educated Chinese overseas professionals: don’t step out of line. Unfortunately, the government does not want to show where the lines are in these gray areas in which business and geopolitics merge. For the past five years central and local governments have been offering educated overseas professionals perquisites to lure them back to the Mainland to contribute their expertise in areas the Mainland would sorely like to develop. Some of the perks included subsidized housing, tax breaks, residence permits, education opportunities for children and more. The governments in China clearly know they require such outside experience to kick-start 21-st century industries like pharmaceuticals, aeronautics and alternative energy generation. The governments, though, do not understand how their wayward charges tick, nor how the value systems of Overseas Chinese might have changed from those of stay-at-homes.

Though Mr Hu did confess to taking bribes, his ten year conviction was certainly vindictive. Mr Xue Feng’s conviction was the same sort of poke in the eye at overseas Chinese who return to their homeland as conquering heroes, but who are treated with envy and scorn by the very government that encouraged them to come in the first place. In the end, though, it is China who will lose through its archaic and ham-fisted approach to nurturing the brains that will continue to drain from the country.

Further reading: The Economist

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Image Credit: lifewiththeclub.blogspot.com