High-tech luring laid-off expatriates back to China
By Janet Ong
Bloomberg News Service
SHANGHAI, China — Gao Weining's American Dream faded as the computer industry cooled in California's Silicon Valley. So he sold his two cars and two-story house and followed the action — to China.
Gao, a 38-year-old American electrical engineer, lost his job this year when the Internet bubble burst and Nasdaq-listed F5 Networks Inc. failed to renew his contract. Now he's senior vice president for sales and marketing in Shanghai for Intrinsic Technology Ltd., a China-based software developer.
"I'm trying to enjoy my apple instead of thinking about the orange I gave up," said Gao, a native of underdeveloped Jiangxi province in central China who graduated from Vanderbilt University and lived in the United States for 12 years.
He isn't alone. The brain drain that once sent China's brightest talent abroad for education and jobs has started to reverse. China, one of the world's fastest-growing technology markets, is recruiting overseas Chinese and foreigners to meet its need for skilled professionals.
The pitch gains appeal as jobs dry up in America's technology heartland. Telecommunications, computers and electronics were among the top five U.S. industries cutting employment this year. In November, Sun Microsystems Inc., the fastest-growing server maker last year, said it would fire 3,900 workers — 9 percent of its staff — amid a sales slump. Applied Materials Inc., the biggest semiconductor equipment maker, last week said it planned to fire 1,700 more people as it cuts costs.
"The environment in Silicon Valley is grim compared with Shanghai and Beijing," said Jun Wu, chief executive officer at Intrinsic, who received 100 resumes from Americans and overseas Chinese when he went to California in October to look for candidates for three senior management jobs. Most applicants had been fired by industry leaders such as Cisco Systems Inc., Intel Corp. and Yahoo Inc., he said.
"The future there is uncertain, and people are worried about their jobs," Wu said.
While Japan, the United States and parts of Europe slip into recession, China's economy continues to grow at the fastest clip of any major country — an estimated 7 percent this year. With its entry into the World Trade Organization complete, China has pledged to widen access to foreign business. In return, it wants the expertise that built those businesses, especially in technology.
China overtook the United States in August as the biggest mobile-phone market. The most populous nation has invested 60 billion yuan ($7.2 billion) in technology industries during the past two years and expects its information technology market to double in value to 2 trillion yuan ($207 billion) in four years. Its semiconductor market alone may reach $21 billion by 2004, according to research firm Dataquest Inc.
Motorola Inc. and Ericsson AB are among companies investing in China. Motorola, the second-largest mobile-phone maker, will triple its investment there in the next five years to $10 billion, expanding its engineering work force fivefold to 5,000, said Michael Ning, communications manager at Motorola China. Ericsson, the biggest maker of wireless phone networks, said it planned to double investment in China to $5 billion in five years.
Job opportunities also have been boosted by expansion of domestic companies such as China's biggest computer maker, Legend Holdings Ltd., which has set up a venture with Gigabyte Technology Ltd. of Taiwan to make motherboards.
China's Labor Ministry estimates the nation will need 300,000 more integrated-circuit designers and more than 1,000 senior technology managers by 2010. That's a 300-fold increase.
"It is more challenging to work in a maturing market like China than in a saturated one like the U.S., because there's more room for growth," Gao said of his new job.
Intrinsic isn't the only company tapping U.S. talent. Nasdaq-listed UTStarcom Inc., a network-systems developer in Shanghai and Beijing, said it recruited 50 American engineers and went on another recruitment drive to Santa Clara, Calif., earlier this month.
"We are trying to lure the best talent in the Valley to work in China — not just those who have been laid off," said Ying Wu, chairman of UTStarcom, whose investors include Japan's Softbank Corp.
"Hiring people from the U.S. will cost us about 60 percent more, but it's worth it because they have the vision and training that local hires lack," said Wu.
Intrinsic is offering about $35,000 a year, with stock options and cash bonuses, to programmers with five years' U.S. experience or less. An engineer with six years' experience can earn as much as double that.
At Shanghai Vitec Electronics Co., an Australian-invested company that makes transformers for telecommunications network equipment, a local engineer with two years' experience earns 3,000 yuan a month — about $4,500 a year — while a senior programmer is likely to earn a maximum of 10,000 yuan, said sales manager Lee Yung Chi.
For some, a few years in China is a shortcut up the career ladder.
"Some people are willing to give up higher pay if they can get bigger titles that offer more potential to move into management," said Jay Chen, a director at Frost & Sullivan China, an information technology consultancy based in Beijing whose clients include Lucent Technologies Inc. and Alcatel SA.
For many expatriates, China is no longer the hardship posting it once was. Shanghai's sidewalk cafes, Western retail shops and nightlife have replaced the drabness of the 1980s, when the nation was just opening its door to the outside world. About 600,000 foreigners now work in China.
Still, it's a long way from San Jose to Shanghai, where the vestiges of a totalitarian regime still take their toll on efficiency.
"You have to stop comparing, or you'll be miserable," said Gao, who lives in a studio apartment and rides a taxi to work instead of zipping around in a Lexus RX300. "It's very frustrating because the mindset is so different."
