China released draft regulations last week, which, if passed, could extend permanent residency to more foreigners, including investors and tech industry workers.

Why it matters: China has a cumbersome employment permit system for foreigners wanting to work in the country, potentially slowing the development of industries it is pushing to get ahead in.

  • Officials are concerned about talent shortages in fields like artificial intelligence, which may stymie China’s efforts to get ahead in the tech race.
  • China also wants to attract more foreign investment. Making it easier for investors to stay in the country is part of that effort.

Details: The Ministry of Justice on Thursday issued draft “Management Regulations on Permanent Residency of Foreigners,” which includes detailed conditions for prospective applicants.

  • Applicants do not necessarily have to be previous residents if they meet other requirements.
  • For applicants filing as foreign investors, they must show they have made stable investments for three years, and have good credit history and tax records.
  • If they meet that requirement, foreigners that invest more than RMB 10 million (around $1.4 million) individually or through an enterprise in which they are the controlling shareholder, and those that set up high-tech companies in China can apply for permanent residency. 
  • Other applicant categories include those that have made internationally recognized outstanding achievements to China’s technology, economy, science, education, culture, or health and sports. In addition, those who fall under urgently needed talent for China’s economic and social development, academic researchers, and management or technical personnel recommended by high-tech companies are also eligible to apply.
  • Successful applicants should reside in the country for at least three months of each year. 
  • Individuals are able to comment on the draft regulations until Mar. 27.

Context: While some foreigners are already holding permanent resident cards, these regulations clarify and relax some previous requirements for those eligible.

  • This is just one move in many the government is making to retool China’s immigration system, and reduce red tape and uncertainty, which could deter tech talent.
  • Without international talent, China’s goals of developing tech like semiconductors becomes a lot more difficult.
  • “China has an abundance of low- to middle-end labor but is short of talent when it comes to innovation,” (our translation) said Liu Xuezhi, deputy director of the Chinese Academy of Personnel Science. Liu added that it is possible to see, through these regulations, China’s institutional design for attracting talent.

Update: added to context section.

Lavender covers regulation and its effects on people. She previously worked in a policy advisory analyzing China’s internal governance for foreign governments and multinationals. A History graduate from...

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