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China is luring the best and brightest home

 The other day at a coffee shop in Beijing, I noticed a group of college students in line in front of me sharing stories of a fun night out. The students were all Westerners and, as one told me, they were here for a year of study in China.

The presence of Western students reminded me of the inverse: The large number of Chinese students on U.S. campuses, such as those at the University of California, Berkeley, many of whom I met when I lived in the Bay Area.

But there's one big difference between these two groups of students: Since 1978, according to the Chinese government, more than 70 percent of all the Chinese who studied abroad – in the U.S. and elsewhere around the world – chose not to return home.

According to a report by the Chinese Academy of Social Services, between 1978 and 2006, about 1.06 million Chinese went to study overseas – but just 275,000 returned home during that period. Of those who stayed overseas, many proceeded to graduate, find work, and become citizens of their adopted countries.

The trend often had mutually beneficial results: for example in the U.S., employers had access to many of China's top students, and the graduates had better, more lucrative job prospects without having to compete for work in China's employment system, which some accused of being influenced too much by nepotism and corruption.

But things now are changing.  A reverse brain drain is underway. With China's economy on fire – it's growing at a double-digit rate each year – and the prospects of a better lifestyle available, many of China's best and brightest are starting to return home.

Reverse brain drain 

And China is helping to lure them. China's labor department has created a plan targeting 200,000 students based overseas. Specifically, the government plans to offer preferential policies when it comes to income, welfare, housing, and even education for job holder's children.

Perhaps the biggest draw has nothing to do with new government initiatives: The prospect of economic opportunities here are even greater than those once imagined in the West. According to many economic forecasts, China is poised to overtake the United States and become the world's biggest economy in a little more than 20 years. With little inherited wealth, this is a country of self-made millionaires, a fact not lost on Chinese living in the West.

If returning Chinese think they won't find Western bling in this communist country, they should think again.  For those who can afford it, there are plenty of BMWs and Mercedes for sale here. One can live in a million dollar home, shop at Prada, and if they miss American fast food, go to a McDonalds. And because labor costs are so low, one can have two full-time servants working six days a week for a relative bargain – so the quality of life for someone returning can be very good.

But for the Chinese government, luring their best students back, who would otherwise be lost to other countries, is about more than saving face.

Officials now contend that "the lack of first class scientists and research pioneers is the main thing hindering China's innovation capability." That declaration shows that Chinese officials now have the sobering belief that retaining the best students is crucial to the country's economic and social security.