Taiwan battles brain drain as China aims to woo young talent away

China had on Feb 28, 2018, unveiled a package of 31 incentives to attract Taiwanese people and businesses to the mainland.
China had on Feb 28, 2018, unveiled a package of 31 incentives to attract Taiwanese people and businesses to the mainland.PHOTO: REUTERS

TAIPEI (WASHINGTON POST) - After studying fashion management in London, 33-year-old Gaga Liu considered her choices: a move back home to her native Taiwan, or a job in the glitzy city of Shanghai on the Chinese mainland.

"Shanghai is a very fashionable city, a big market. Every brand wants to set up a flagship store there," she said. "Taiwan is a very small market."

It was no contest. Three months ago, like many of Taiwan's young people, she moved to mainland China to work as a visual merchandiser for Hermès.

She is one of hundreds of thousands of Taiwanese flooding to their booming neighbour to find work, fuelling fears of a brain drain from their island home.

And it is a brain drain that China appears to be gleefully exploiting.

On Feb 28, it unveiled a package of 31 incentives to attract Taiwanese people and businesses to the mainland, offering tax breaks and subsidies for high-tech companies, research grants for academics, and a promise to allow Taiwanese companies to bid for government infrastructure projects and even become involved in China's Belt and Road global development plan.

China called the measures an expression of its belief that there is "one family" on both sides of the Taiwan Strait.

Taiwanese Vice-Premier Shih Jun-ji cast it as an effort to undermine the island's economy.

"China's attempt to attract Taiwan's capital and talent, especially high tech and young students, has clear political intentions," Mr Shih said at a news conference, unveiling eight countermeasures designed to keep people at home.

In 2012, Oxford Economics judged that Taiwan faced the largest "talent deficit" among 46 countries surveyed, and the research firm recently said the conclusion stands today.

In Taipei, some politicians are becoming worried.

"This is very clearly targeted at luring our talent to China," said Mr Jason Hsu, a lawmaker for the opposition Kuomintang party. "I see a huge exodus."

Tensions rose across the Taiwan Strait after the 2016 election of Ms Tsai Ing-wen as president. Her party, the Democratic Progressive Party (DPP), views Taiwan as a de facto independent nation, and although she has ruled out a declaration of independence, she has declined to endorse the idea of "one China".

In response, China has taken diplomatic and military steps to isolate and intimidate Taiwan, but that has not been winning many hearts and minds here, so Beijing took a different tack, one it employs all over the world: using its economic might to try to buy friends.

China's economy dwarfs Taiwan's, and its growth rate, at nearly 7 per cent last year, outstrips Taiwan's, which was 2.8 per cent last year.

Although Taiwan's per capita income is much higher - more than US$24,000 (S$31,428) compared with less than US$9,000 on the mainland - in certain sectors, mainland salaries can be twice, three or even five times higher than in Taiwan, according to people who have worked in both places.

Official figures show 720,000 of Taiwan's 11-million strong workforce have left the island for work, with more half of them going to China. But experts say the real figure is much higher.

A poll conducted in March found that nearly nine in 10 Taiwanese workers have worked abroad or are willing to do so.

"You have to consider your future, your job opportunities, what you want to achieve," said Mr Nelson Kuo, 30, who moved to Shanghai five years ago to work as a customer experience consultant for leading brands. "From that point of view, China is a really great place to live."

It does take some adjustment, he acknowledged.

In Taiwan, people are more sensitive to others' feelings, he said, but "Chinese people tell you things very directly. In the beginning, that made me feel uncomfortable, but I got used to it".

Chinese colleagues often resent the Taiwanese, Ms Liu said, thinking them to be better paid.

At National Taiwan University, some students said they wanted to contribute to Taiwan's development and would never work in China. Others aimed at careers in the United States, but many said their ambitions lay on the mainland: culturally and linguistically more accessible than the West, and more achievable.

So what are China's goals in wooing Taiwan's people? Ultimately, the unification of Taiwan and China into that one "happy family" under Communist Party rule.

Attracting Taiwanese entrepreneurs and workers to the mainland could make them more comfortable with one day being part of China, less likely to risk their livelihoods by ever supporting independence.

The flow of talent creates another lever that Beijing can use against Taipei, and if it succeeds in hollowing out Taiwan's economy, it could perhaps fuel a sense of resignation among Taiwanese people, a feeling that there is no alternative to one day accepting Chinese sovereignty.

"We can't scare you, we can't bully you to be our friend, so we'll keep offering you candies until you are hooked," Mr Hsu said, describing his perception of China's tactics.

But it is not clear that the strategy will pay off for China.

Some evidence from pollsters suggests that young people feel slightly less negative towards China than older people do.

But the longer-term trends are clear: a growing sense of a separate Taiwanese identity and a steep decline in the number of those who feel Chinese, says Academia Sinica political scientist Nathan Batto.

"China is a place for work," Mr Kuo said. "I like this country, but culturally I still belong to Taiwan. There is still a gap."

Taiwan, as a progressive and vibrant democracy, feels a world away from the increasingly authoritarian regime of President Xi Jinping, where foreign social-media platforms are blocked and free speech is sharply curtailed.

"Taiwanese people have been going to China for the past 20 years, but when they go they feel like they are in a different world," said DPP lawmaker Jason Lin Chun-hsien. "They also know who is threatening our survival, who is suppressing our space in international society. It's a problem of humiliation."

Indeed, weeks after unveiling the incentives, China's aircraft carrier was cruising through the Taiwan Strait, and Chinese warplanes flew menacingly close to the island.

"China seems to be unable just to be nice to Taiwan," said Mr J. Michael Cole, a Taipei-based scholar. "It always has to do something stupid."

In Taiwan, there are particular concerns about an offer to open up China's television, film and publishing industry to Taiwanese companies.

"I am worried that TV dramas will self-censor so they can enter the Chinese market," said economist Yang Tzu-ting at Academia Sinica. "That's a threat to the best thing we have in Taiwan, our freedom of speech, our democracy."

Taiwan's government, meanwhile, plans to bar academics from taking up offers in China, if their research concerns the semiconductor industry, one of the mainstays of the island's economy, or if they are ultimately to be employed by the Communist Party, local media reported.

But not everyone is convinced there is reason to panic. Mr Michael Boyden, founder of Taiwan Asia Strategy Consulting, says many of those going to China cannot attract the best job offers in Taiwan or the West.

Instead of trying to close its doors and stop people leaving, Mr Darson Chiu at the Taiwan Institute of Economic Research says, the island needs to work harder at attracting people from other Asian countries and throw its economy open to the world.

"Singapore, for example, is very open," he said. "There no trade barriers, no financial barriers. That should be the role model for Taiwan to follow."

Others say the brain drain could be the shock to the system the island needs to devise a long-term economic strategy.

In Shanghai, Ms Liu manages to work her way around China's Internet censorship. The worst part of living in China, she says, is polluted air and greasy food. After a few years there, she says, she will head home, where her boyfriend still works, to care for her sick father.

She avoids talking about politics with her Chinese colleagues. But one day, she says, maybe China will finally take control of its smaller neighbour. "They can just use their economy to control Taiwan," she said. "Maybe they can just buy us."