25 April 2019
Taiwan has seen a growing number of its citizens seek employment opportunities in mainland China due to stagnant wages and rising living costs on the island. Photo: Xinhua
Taiwan has seen a growing number of its citizens seek employment opportunities in mainland China due to stagnant wages and rising living costs on the island. Photo: Xinhua

Taiwan must think anew to stem talent flight to China

Ever since Tsai Ing-wen took office as Taiwan’s president in May 2016, relations between Taipei and Beijing have been on a downward spiral.

Apart from diplomatic setbacks, Taiwan is facing another, even more profound, threat: a massive brain drain. Ironically, this is happening because Beijing is rolling out policies to encourage Taiwanese businessmen, students and professionals to come to the mainland.

For example, the Taiwan Affairs Office of the State Council in Beijing recently announced a package of 31 measures aimed at luring Taiwanese citizens.

Some of the measures relate to demands that Taiwanese firms entering China are granted equal rights and treatment as mainland businesses. Proposals also include enabling Taiwanese companies doing business in the mainland to participate in the “Made in China 2025″ program, as well as offering them tax concessions.

Under the policy package, Taiwanese citizens will gradually enjoy equal rights and treatment as mainlanders, when it comes to education, entrepreneurship, employment and residence.

In the past 10 years, Taiwan has seen many of its manufacturers move their production lines overseas for cheaper labor, yet the island has remained sluggish in transforming itself into a high value-added economy. As a result, average wage growth in Taiwan has virtually ground to a halt.

According to government statistics, the ranks of the working poor (i.e. those who make between NT$22,000 and NT$23,000 a month) have grown to 1.3 million, with 33 percent of them aged between 21 and 30.

Worse still, Taiwan has also slipped in terms of housing affordability. Given all these factors, an increasing number of Taiwanese have been moving to mainland China to seek a better life.

At present, there are around 3 million Taiwanese people working and living in the mainland. In Shanghai alone, there are over one million of them, according to Taiwan’s 2016 population census.

And in recent years, a growing number of Taiwanese with professional qualifications joined the exodus to the mainland.

Apart from central authorities in Beijing, many provincial governments are also working aggressively to attract Taiwanese talent. 

For example, the Fujian government recently launched a high-profile program to recruit high-end Taiwanese professionals specializing in electronic information, biology and new medicine as well as cultural and creative industries.

Now, what is perplexing is the way that the Taiwanese government is responding to the mainland’s aggressive recruitment of its social elites.

Rather than offering the people better employment conditions at home, it is trying to deter would-be-emigrants through intimidation.

For instance, the island’s education minister, Pan Wen-chung, had warned that it would be illegal for professors at Taiwan universities to teach in mainland institutions on a project-based arrangement or take part in key R&D projects in China.

Anyone who violates the law would be dealt with seriously by the government, the minister said.

Taiwan’s Ministry of Health and Welfare also said, citing the Act Governing Relations between the People of the Taiwan Area and the Mainland Area, that doctors who have a civil servant identity cannot work in the mainland.

But such threats may not work as people will continue to seek opportunities where they find a better deal.

Unless Taipei reviews its policy on talent retention immediately and drastically, it will lose out amid the intense competition from Beijing for Taiwan’s valuable elites.

This article appeared in the Hong Kong Economic Journal on March 23

Translation by Alan Lee with additional reporting

[Chinese version 中文版]

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Hong Kong Economic Journal contributor

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