The Development of Rencai - China's Talent Ambition and its Implications
By Constance Ip

“Talent is the most important resource and it is a key issue that concerns
the development of the Party and country.”

- Hu Jintao at the formal release ceremony of China’s National Medium
and Long-Term Talent Development Plan (2010–2020)

On June 6th 2010, the Central Committee of the Chinese Communist Party (CCP) and the State Council jointly issued a National Medium and Long Term Talent Development Plan (NTDP), the first national comprehensive plan in China’s history of human resource development. It is part of China’s vital reexamination of its 30-year old national development strategy as it faces the overwhelming challenge of transforming the economy from one focused primarily on manufacturing to a world leader in business and innovation. This plan details the great change that has occurred in the government, Party and country. Unlike the past, when much importance was attached to the development of infrastructure and manufacturing, human talent - or rencai - is the most valuable and important asset for China. A year after the formal release of the plan, the implications of this alteration in mentality can be seen in government policies and spending as well as in the changing dynamics of the battle for talent within China.

INNOVATION AND CREATIVITY

In the NTDP, the Chinese government has set a target to transform China into an innovative and creative country by 2020. This will redirect investment towards education, R&D, public health, energy and environmental conservation, and social welfare. In the annual meeting of the National People’s Congress, it was agreed that R&D spending in the next five years should rise to a targeted 2.2% of GDP compared to 1.6% now. R&D is predicted to contribute 60% of China’s economic development by 2020 with R&D investment rising to 2.5% of GDP. "China must rely on scientific innovation and an improvement in labour quality to enhance the quality and efficiency of [economic] growth," said Prime Minister Wen Jiabao. China’s goal for annual patent filings by 2015 is two million patents, surpassing the United States in patent filings by the end of 2011. This patent strategy can be seen as part of a far-reaching national plan to drive innovation and creativity.

ATTRACTING TALENT

The NTDP states that more policies will be introduced to attract overseas talent. One program that has received a lot of attention is the Thousand Talents Program. This initiative encourages Chinese academics and experts living overseas to return to work for Chinese universities and companies. Participants receive competitive salaries, substantial relocation aid, and generous funding for research. Since the start of the program, more than 1,100 scholars have returned. This program shows how important the sourcing for intellectual power is to Beijing today. According to the Chinese Ministry of Education, increasing numbers of Chinese students have returned in recent years – 134,800 from the US last year, marking a 25 percent increase from 2009.

THE BATTLE FOR CHINA’S TALENT

Statistics show that there is a growing proportion of high-potential Chinese workers who prefer to work for domestic employers than for Western multinationals – a three-fold increase since 2007. Some Western multinationals have found it difficult to retain their experienced Chinese middle managers and junior executives. A report by the Financial Times in June indicates that multinationals have lost their image as the best employers in China. A further recent survey states that sixty percent of management-level employees say a Chinese privately owned company would now be their first choice.

A CHANGING TALENT LANDSCAPE

A year after the release of the NTDP, government rhetoric is still firmly set on driving the country towards innovation and a more knowledge-based economy. Although it is still too soon to tell the full impact of the policies and plans that have been put in place, there is no doubt as to Beijing’s commitment to science and innovation investment with the Thousand Talents plan, the National Patent Development Strategy, and the Innovation Plan, to name a few. Coupled with more fertile and welcoming employment opportunities at home, local Chinese workers may choose to work locally rather than abroad, changing the talent landscape now and in the coming decades. As scholars who have studied and worked in the West return to China, they bring with them not only scientific knowledge, but also the management skills necessary to lay the foundations for China’s future.

(Sources: Harvard Business Review, Wall Street Journal, Financial Times, New York Times, The Brookings Institution)