How China manages economic-stream migration: The new points scheme

Development of Chinese legislation governing foreign nationals

The number of work permits issued to foreign nationals has been on the rise in recent years. From 180,000 in 2006, the numbers rose to 246,400 in 2012. More recently, in 2016, there were 235,000 foreign nationals working in China. (MHRSS, 2006, 2016).

Continuing economic growth, the transition to an urban and service-based economy that demands highly skilled labor, and demographic trends lead to labor shortages that in turn are expected to fuel flows of international migration to China (Pieke, 2012: 41–42). The global trend towards hunting for ‘super talent’ and China's goal of enhancing its soft power contribute to a change in immigration law and policies (Ding and Koslowski, 2017: 109–110). Official rhetoric has shifted from a general focus on strictly controlling foreign nationals to a more differentiated approach that emphasizes both the attraction of foreign talents and the crackdown on the so-called ‘Three Illegalities,’ that is, illegal entry, illegal employment and illegal stay of foreign nationals (Bork-Hüffer and Yuan-Ihle, 2014: 577). This policy appears to respond to findings that native populations have reacted to increased immigration with xenophobic social and political movements (Martin et al., 2014: 3, 5, 26). When public sentiment demands stricter immigration policies, a clear preference for foreign ‘super talent’ signals that the state firmly controls migration (Shachar and Hirschl, 2013: 86).

The adoption of the Law on Exit and Entry Administration in 2012 was the first attempt to modernize migration legislation at the national level (NPCSC, 2012; Liu, 2014). The law did not provide groundbreaking detailed regulations on high-skilled migration. However, it incorporated earlier reforms, such as the permanent residence scheme of 2004 (MPS and MFA, 2004), and constituted a broad legal framework for the implementation of new policies for attracting foreign talent through the adoption of State Council administrative regulations. The new Exit Entry Law attempts to increase China's attractiveness for highly skilled foreign nationals by introducing a new visa category of talent visas (R-visa) (NPCSC, 2012: Art. 16; State Council, 2013: Art. 6). The main benefits of this new visa type compared to the general work visa (Z-visa) are that R-visas are issued for up to five years and allow for multiple entries with a stay of up to 180 days each. Holders of R-visas can apply for a five-year residence permit. Holders of Z-visas can, in general, only apply for a one-year resident permit (MPS, 2013: Art. 11, 16; 2015: Art. 8).

The legal residence of foreign nationals for work purposes requires obtaining a number of approvals from different authorities and the active participation of the employer in the application procedure. So far, there is no single permit scheme allowing for entry, stay and work in China. The three different permits build on each other, as a valid visa is the precondition for issuing a work permit. Further, a visa for employment purposes and a work permit are preconditions for issuing a residence permit. However, different administrative bodies issue each permit separately. Though the relevant ministries and their subordinate bodies are guided by unified state and party policies, they are led by different interests and hold different views on immigration law reforms that influence their day-to-day practice of the treatment of foreign nationals. Different departmental interests are the main reason for the slow reform of the legal framework governing migration to China (Han, 2015: 229).

Previous approach to selecting economic-stream immigrants

In general, the preconditions for a work permit required that the foreign national had reached the minimum age of 18 years, possessed the professional skills and relevant work experience required for employment in China, had no criminal record, had a designated employer in China and held a valid passport. Hence, the immigration selection was primarily determined by the needs of employers and there were no specific requirements as to the education, language or work experience of the foreign employee (MHRSS, 2017: Art. 6, 7). However, more specific requirements were applied to foreign nationals who were categorized as foreign experts. Foreign experts who were employed in the sectors of education, research, media, culture or sports were required to hold at least a bachelor's degree and have five years of work experience (SAFEA, 2004).

Another category of economic-stream immigrants, high-skilled talents, was introduced in 2008 with the Thousand Talents Plan, the first in a row of state-run talent programs, aimed at winning back overseas Chinese (Zweig and Wang, 2013). Talent plans are currently implemented at the national, provincial and city levels. Qualification for one of the four key areas of the Thousand Talents Plan requires the possession of a PhD, an age of below 55 years and the intention to work for not less than six months a year in China (Bureau of the CPC Central Committee and MHRSS, 2008: Art. 10).

Selection criteria for category A, B and C foreign nationals

The new system for selecting economic-stream immigrants divides immigrants on grounds of their academic qualification, professional experiences and income into A, B and C foreign nationals, supplemented by a points system (SAFEA et al., 2017: Annex 1). Work permits are granted according to the overall political guideline of ‘encouraging high-skilled, controlling skilled and restricting low-skilled’ foreign employees. This slogan translates into A, B and C economic-stream immigrants. There is no quota for foreign nationals who qualify for the A or B categories while a quota applies for those who fall under the C category, but that is still to be determined (SAFEA, 2017: 5).

There are two ways to qualify for the A category. Applicants can either accumulate at least 85 points under the points system or they are recruited by talent attraction programs. More than 120 talent plans which have their own specific admission criteria have been established at the state, provincial and provincial capital levels (SAFEA et al., 2017: 14).

Other pathways for foreign nationals to qualify for the A-category include the following.

They receive international recognition for their professional achievements, including holders of awards such as Nobel Prizes in the natural sciences or economics. The A category includes excellent academics, such as members of national science and engineering academies, directors of national institutes and state laboratories, authors of at least three articles, which were published in highly ranked science and technology journals, as well as professors from high-ranking academic institutions. The first version of the Categorization Standards defined high-level universities as the top 200 universities according to the Academic Ranking of World Universities prepared by Shanghai Jiao Tong University. However, this definition was dropped in 2017 after a six-month pilot reform phase because it was considered too restrictive.

A-category applicants receive favorable treatment compared to B-category applicants—they are allowed to submit soft-copy versions of required documents before entering China and their credentials with regard to work experience, diplomas and proof of no criminal record are accepted without further checks (SAFEA, 2017: 6, 8, 9, 16). The approval period for work permits has been reduced from 10 to five working days and the longest possible validity period of the work permit is extended to five years (SAFEA, 2017: 17, 18).

Category B applicants need to accumulate at least 60 points, or they qualify if they fulfill the following criteria as a B-category foreigner: hold at least a bachelor's degree; have obtained at least two years of relevant working experience; are employed in the education, research, news, publishing, culture, arts, healthcare or sports sectors; or work in China on the basis of an international agreement for an international organization or a multinational company. Foreign language teachers should, in principle, only teach a language, which is their mother tongue, and should have at least a bachelor's degree and two years of language teaching experience. If the bachelor's degree or a higher degree is a language or pedagogical degree, the work experience requirement does not apply. Further, holders of internationally commonly used professional skills qualification certificates, such as certified financial planners or certified financial bankers, fall under the B category. Foreigners who earn at least four times as much as the regional average income also qualify (SAFEA, 2017: 11).

Foreign nationals who do not fall under categories A or B but fulfill the requirements of the labor market as well as those of state policies and regulations, belong to category C. This includes those who conform to current regulations on foreign employees, who conduct temporary or short-term work not exceeding 90 days or who fall under the quota system, such as young foreign nationals who come to China for internships based on government agreements, or foreign students.

The new points scheme

In general, points schemes admit foreign nationals for temporary or permanent settlement without a specific job offer if they score above a certain pass mark. Points systems enable states to accumulate human capital not only for economic growth but also for addressing demographic challenges and socio-cultural objectives. In contrast, employers make the selection decision in demand-driven systems that match immigrants directly with jobs (Papademetriou et al., 2008: 3, 9).

The Chinese points system distinguishes between nine categories in which economic-stream immigrants can accumulate points. It considers proposed earnings, education, work experience, duration of stay in China per year, Chinese language proficiency, regional settlement, age, specific criteria relating to work experience and education and characteristics to be determined at provincial level. The points system reveals the party-state's immigration policy and the specific weight attached to certain policy aims in relation to others. As the pass mark for being admitted as a B-category foreigner is 60 points, the importance of a characteristic such as age or education in relation to other variables within the points system can be measured by a variable-to-pass-mark ratio that includes the maximum number of points that a characteristic can contribute to the pass mark (Papademetriou et al., 2008: 20). The variables given the most weight with a 33 percent pass-mark ratio are proposed earnings, education and prior work experience.

Immigrants earn a maximum of 20 points if the proposed yearly salary is above RMB 450,000; they do not accrue any points if the salary is below RMB 50,000. Compared to other immigration law systems, the heavy weight attached to proposed earnings is rather unusual. Only the UK gives this requirement a pass-mark ratio of above 60 percent (United Kingdom Home Office, 2006). High earnings reflect certain skills of the applicant that are valued by the prospective employer that cannot be properly reflected in other formal criteria such as the level of education. This may justify the heavy weight of this characteristic.

PhD degree immigrants earn 20 points, a master's degree holder 15 points and a bachelor's degree holder 10 points. Top-level professional skills qualification certificates count as much as a PhD. Compared with points systems in other legal systems, education is not particularly emphasized. The pass-mark ratio for education in the UK, Australia or Hong Kong is all between 30 and 70 percent and education is normally given the highest priority in relation to all other characteristics (United Kingdom Home Office, 2006: 23; Australian Government Department of Home Affairs, 2018; Hong Kong Immigration Department, 2015). Under the Chinese system, the weight of a PhD degree is the same as a proposed salary of above EUR 60,000. Further, formal vocational qualifications are valued as high as academic qualifications, which is also unusual compared with other points systems, where academic degrees are normally ranked higher (United Kingdom Home Office, 2006: 26). One explanation for not giving education a heavy weight is that the other prominent variables, such as proposed earnings and work experience, reflect the skills levels of economic-stream immigrants.

Work experience of two years counts as five points, each additional year counts as one point and immigrants can accumulate as much as 20 points in this category. Immigrants can also accrue points for the number of months they spent in China to work. They can collect 15 points for staying at least nine months a year in China, 10 points for six to nine months and five points for three to six months. The points system distinguishes between general prior work experience with a pass-mark ratio of 33 percent and work experience in China for a continuous period of at least five years with a pass-mark ratio of 16 percent. As prior work experience in the country of destination is believed to promote social integration, this is prioritized in relation to integration. This, in turn, speaks for an instrumentalist approach, which intends to make use of the foreign workforce to compensate for short-term and mid-term labor shortages. Proposed earnings, education and work experience, the three variables with the highest pass-mark ratio, all reflect the skills levels of economic-stream immigrants.

Proficiency in Chinese can accrue a maximum of five points in case a foreign national previously held Chinese nationality, obtained a bachelor's degree in a subject that was taught in Chinese or obtained level five in the standardized Chinese Proficiency Test. In a previous version of the points system, immigrants could obtain up to 10 points for Chinese language proficiency. Whereas in other points systems, language ranks among the variables with the highest pass-mark ratio, within the Chinese point system, language only carries a pass-mark ratio of 8 percent. The pass-mark ratio of language amounts to about 25 percent in Australia and Hong Kong (Australian Government Department of Home Affairs, 2018; Hong Kong Immigration Department, 2015). As language proficiency facilitates social integration in the country of destination, the relatively low pass-mark ratio indicates that policy-makers do not value long-term integration as much as the job skills and productivity of immigrants.

Immigrants aged between 26 and 45 are awarded 15 points, 10 points are accrued for those in the ages 18 to 25 or 46 to 55, and five points for immigrants aged 56 to 60. The pass-mark ratio for age is 25 percent. This is comparable with other countries; one exception is Hong Kong which gives age a higher pass-mark ratio of about 37 percent (Hong Kong Immigration Department, 2015). The points given to age does not appear to address demographic trends in China. If the Chinese government wanted to offset the emigration of young and skilled native Chinese or balance the aging population, it would have focused on attracting young skilled immigrants by awarding most points to the youngest age group. Again, the focus on the age group between 26 and 45 implies that the points system is primarily concerned with the usefulness of skills that the members of this age group possess. Lesser consideration is given to the overall benefit that younger workers contribute longer to the economy before they draw retirement benefits (Papademetriou et al., 2008: 15).

The pass-mark ratio for duration of stay above nine months is 25 percent. This is another element of the points system that indicates that the scheme is also directed toward foreign nationals of Chinese origin and other highly skilled foreigners who do not want to leave their secure positions abroad and come to China only to work temporarily. Still, this variable prioritizes longer stays over shorter stays. The duration of stay variable stands for a flexible approach that allows knowledge transfer or short-term use of foreign nationals' skills without requiring permanent settlement in China (Zweig et al., 2008: 1).

Ten points are awarded if the place of employment is located in less developed areas, such as in a western region of China, in Dongbei (the country's rust belt), or other old industrial regions as well as in specific state-determined poor counties. Immigrants obtain five points if they hold patents or other intellectual property rights, have graduated from a high-ranking university, obtained work experience in a Fortune Global 500 enterprise or have continuously worked in China for at least five years. Province-level authorities in charge of employment administration of foreign nationals can determine specific standards for specific talent that is urgently needed for local economic and social development. Applicants can accrue up to 10 points for complying with those standards.

Conclusion

The introduction of the points system does not indicate a shift from an employer-led system to a system that is aimed at the exclusive accumulation of human capital, as economic-stream immigrants who pass the points test are still required to be in possession of a job offer. Instead, the points system has introduced additional requirements that immigrants have to fulfill besides having a job offer.

A foreign national aged 26-45, who spends at least nine months per year in China, holds a bachelor's degree and has two years of working experience would need an income of RMB 450,000 in order to accumulate 60 points. A lower income could be compensated, inter alia, by a higher academic degree, longer working experience or proficiency in Chinese. Further, and this is decisive, foreign nationals qualify directly under the B category if their income reaches four times the regional average income. For working in Shenzhen, the yearly income of foreign nationals would need to reach RMB 396,576 in order to pass the threshold for a direct qualification as a B-category foreigner as the monthly average income in Shenzhen amounts to RMB 8,262 in 2018 (Shenzhen Evening News, 2018).

Thus, there are easier ways to qualify directly under the A or B category than through the points system. Hence, the introduction of the points system appears to be more symbolic than functional. The message conveyed by the points system is that the party-state is firmly in control of immigration and only admits foreign ‘super talent.’ Moreover, the clear distinction between A- and B-category foreign nationals within the work permit system does not translate into different legal resident statuses or other substantial benefits or privileges of A-category immigrants. So far, the privileges of belonging to the A-category are confined to slightly easier application procedures but not to a substantially better legal position in relation to the B category. This may well be an unintended reform outcome that is due to the different pace of reform in the area of work permits, of which the Ministry of Human Resources and Social Security was in charge until 2018, and the area of resident permits, for which the Ministry of Public Security is responsible. The competence for issuing work permits was shifted to the State Administration of Foreign Experts Affairs that was made part of the Ministry of Science and Technology during the 2018 restructuring of the State Council.

The introduction of a hybrid immigrant-selection system that combines a points system with other admission schemes and requires a job offer for admission as an economic-stream immigrant follows the global trend to combine a government-led human capital approach with an employer-led system. The points system provides increased transparency of admission criteria and additional government control over the selection process (Papademetriou et al., 2008: 30). The transparency of admission criteria is crucial for presenting the party-state to the public as being in firm control of immigration. However, the orientation toward meeting real-time market demands appears to be short sighted. The new selection system does not address long-term societal interests, strategic economic aims or demographic developments. Furthermore, it neither emphasizes aspects of integration of foreigners into society nor provides clear and predictable paths to acquiring permanent residence.