Covid, decoupling provokes biggest foreigner exodus from China

Mark O'Neill May 23, 2022 11:19

China’s strict quarantine policies and its decoupling from the West have provoked the biggest exodus of foreigners since after June 4, 1989.

The number of foreign residents in Shanghai fell by more than 20% from 208,000 in 2011 to about 163,000 in 2021, In Beijing, the number declined 40% since 2010 to about 63,000 last year.

In a report published on April 21, the British Chamber of Commerce said that 74% of surveyed British businesses reported a large or serious impact on business operations and cash flows from Covid outbreaks and restrictions.

“Businesses are reporting an impacted ability to attract and retain foreign talent (69%), decreased yearly revenue projects (55%), difficulty in developing the market and opportunities (54%), supply chain disruptions (51%) and decreased and delayed investment (49%),” it said.

“The education industry in particular is expecting an overall negative impact on business due to increasing difficulty of hiring foreign talent (74% of responses), which is concerning when paired with forecasts for the upcoming 2022-2023 year indicating an expected turnover of teachers at 40%. Our worry is that this will contribute further to the flow of talent out from China in the coming months if left unaddressed,” it said.

This month Harrow, one of the most famous British private schools, announced that it was changing the name of its bilingual school in Beijing to Lide after the Chinese government banned schools with Chinese students from using foreign names and words like “global” or “international” in their titles.

The Harrow International School in Beijing, which accepts foreign passport-holders and caters mainly to expatriates, will be unaffected.

A survey conducted before the recent lockdowns showed most international schools across China losing 40% to 60% of their teachers and enrolment falling by 25% in the next academic year, according to Julian Fisher, vice-chair of the British Chamber of Commerce in China.

The two-month lockdown in Shanghai has accelerated the exodus. Pet movers, property agents and law firms say they are seeing a sharp uptick in departure queries, while online chat groups swapping advice on how to leave the city amid lockdown curbs have swelled.

The last straw was difficulties obtaining food and fears of being separated from family members should they be infected with Covid and the inhuman treatment meted out by those enforcing the lockdown.

Those who managed to leave describe traumatic efforts to reach the airport, from paying US$500 for a cab that usually costs US$30, battling neighbourhood workers who blocked departures, to being stranded at the airport after their flights were abruptly cancelled.

One said she and her five-month old daughter spent nearly a week sleeping on the floor of Pudong Airport, running out of food. She could not obtain the documents needed for her baby. The lockdown has shuttered visa offices and many administrative firms in the city. She will not return to Shanghai.

This is the biggest exodus of foreigners from China since June 1989, when the European Union and the United States imposed sanctions against the country for its military crackdown on student-led protest.

The question is whether those leaving will return or other foreigners will replace them.

Foreign companies have asked the government for a schedule for ending the Zero Covid policies but it has declined to provide one. They expect the measures to last at least until the Communist Party congress this autumn that will give President Xi Jinping a third term.

Without such a schedule, it is difficult to persuade foreigners to relocate to China, especially those with families, when they do not know under what conditions they will live and work.

Another shadow is the ongoing decoupling between China and the U.S.

“Some in the leadership in Beijing are happy to see this exit,” said Richard Leung, a business consultant in Hong Kong. “They see the foreigners as privileged and over-paid and argue that China has a huge pool of its own talent to replace them.

“In the early decades of reform and open door, China needed the technical expertise, management skills and capital the foreigners brought. Does it still need them now?” he said. “These conservative officials want a strict visa policy, telling foreign companies to hire qualified Chinese before they bring in a foreigner.”

As relations between Beijing and Washington deteriorate, both sides are stressing the importance of “national security”. This means that foreign residents may find themselves caught in this battle, especially if they work in sectors considered sensitive, like telecommunications, IT, computer chips and other high-tech products.

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Mark O'Neill

A Hong Kong-based writer, teacher and speaker.