Why It Matters

Green card can cut both ways

China's latest move to relax permanent residency rules for foreign talent is a needed step to boost its economic restructuring efforts - but also one it has to make carefully to maximise the positive impact and minimise potential backlash.

Among the initiatives unveiled on Tuesday and set to kick in on March 1, Beijing will allow foreigners meeting income and tax thresholds to apply for the green card. Ethnic Chinese holding PhDs or having worked four years at the Zhongguancun high-tech park in Beijing will also qualify.

The authorities have used the phrase "wai ji hua ren", which translates as foreigners with Chinese ethnicity. It could refer to former Chinese nationals now holding foreign citizenship or foreigners with Chinese ethnicity and born elsewhere.

But targeting the first group could provoke unhappiness among mainland Chinese that those who had migrated before the country prospered would be allowed to enjoy citizen-like treatment. Targeting the latter group might spark concern among countries with a large Chinese population such as Singapore.Yet China would want its green card to be attractive enough to foreigners to reflect its growing national prowess, much like the American green card.

It is widely believed the key reason that only 5,000 green cards have been issued since 2004, compared with the nearly 600,000 foreigners living in China, is the strict requirement criteria. Another possible factor is that the perks are insufficient. Most interviewees tell me they are keen to apply only because holding a green card means they do not have to renew work permits yearly. Other benefits are either not clear or attractive enough to them.

A low take-up rate after relaxing its rules might reflect poorly on China and hurt efforts to make its economy more enterprising and innovative. But it knows that the green card, like a double-edged sword, can cut both ways.

A version of this article appeared in the print edition of The Straits Times on January 16, 2016, with the headline 'Green card can cut both ways'. Print Edition | Subscribe