In the past two decades, China has experienced the most rapid economic growth rate in the world - so much so that in 2006, it overtook Japan as the country with the largest foreign reserves. In 2002, China overtook the United States as the most attractive destination for inward foreign direct investment. In that same year, the Chinese government announced its “go global” policy, which had the objective to create several national champions in the years ahead. In response to this government initiative, some of China’s largest companies have begun to expand abroad, such as Lenovo’s purchase of IBM’s PC division, and Haier’s establishment of manufacturing plants in the United States. Even though some of these investments abroad have failed – such as CNOCC’s unsuccessful bid to acquire Unocal and the dissolution of the joint venture between TCL and Alcatel only nine months after the merger – the desire by Chinese companies to invest abroad has not abated.

While there are many challenges to successful expansion abroad, including the lack of brand name, host government restrictions, financing difficulties, lack of distribution channels etc., many Chinese companies have acknowledged that the shortage of highly qualified talent could pose the most significant bottleneck to thwart that country’s aspirations in this regard.

In this proposal, we seek to examine the human resource challenges associated with China’s outward foreign direct investment objectives in two important ways: One, we seek to investigate the willingness of qualified talent in host countries to work for Chinese companies that seek to invest abroad. In this regard, we plan to examine the attitude and experiences of professionals and university graduates in West European countries toward working for (a) Chinese-invested (whether wholly- or majority-owned) companies in their home countries; and (b) working in China for either Chinese or non-Chinese owned companies. Information about the challenges and issues associated with working for Chinese companies and/or working in China will also be collected.

In the past two decades, many Chinese students have also left China to study abroad. Initially, many of these students chose to remain abroad to work upon graduation. With continued economic growth in China, a rising number of these Chinese students have begun to return, although the stay rate of Chinese graduates in science and engineering in the United States remains high. This second and related study seeks to examine the attitudes of Chinese students, who have studied and/or are now working in West European countries, about returning to work in China. Furthermore, in this sample, we will examine the motivations and anticipated challenges/issues they might encounter upon returning to work in their country of origin.

Two questionnaires have been developed in order to measure the attitudes and experiences of these two groups of people towards working for the Chinese. These questionnaires will be supplemented by in-depth interviews to gain a better understanding of the issues under investigation.

The findings of these two related studies will have important implications for (a) projecting the viability of China’s outward foreign direct investment objectives; (b) understanding the potential problems that West European countries might likely have to contend with as Chinese companies expand abroad; and (c) examining the phenomenon of “brain circulation”, i.e., the movement of human talent across international boundaries. For example, if highly qualified talent from West European countries are indeed attracted to work for Chinese invested companies both at home and in China, how will that affect the supply of human capital at home?

Contact person: Verner Worm