Wondering just what the future holds for him, Bwog’s Super Secret Beijing Operative Paul Hsiao trundled down to the IAB to listen with awe and dread to Denis F. Simon and Cong Cao’s examination of the current science and technology labor market trends in China, “China’s Science and Technology Talent Pool – Competitive Advantage or Critical Problem?”

Simon, a professor at Penn State’s School of International Affairs, kicked off the discussion by noting that a new wave of engineering students has hit the market. Whether or not China actually produces thousands more engineers than the United States may still be an open question, but the fact remains that Chinese education is producing more and more students each year. Due to the educational renaissance of China, about 25 percent of high school graduates go to college, up from 3 percent in 1980 – an astounding jump.

However, Simon noted, the current engineering workforce may not be a strong as first it appeared. Citing the fact that while the top ten universities in China remain relatively reliable and stable, the “middle group” of Chinese universities is in constant flux, producing students of unreliable merit. Hinting unsuccessfully at causality, Simon nudged the audience with this factoid: only 20 percent of the current engineering work force is “top quality.” Granted, if you’re the best of the best in China, you’re usually the best of the best in the world, but the dive in quality for “middle group” students is quite substantial.

And of these elite engineers, the majority wish to move to the coast, creating a brain drain Central and Midwest China, the areas where development is needed most. At the same time China now produces increasingly high tech goods due to demands from foreign companies setting up shot in China.

Thus, the demand for engineers is increasing, so much in fact that unprepared Chinese engineers are being prematurely promoted in their thirties (the usual age would be in the fifties) to managerial positions. In fact they are often almost complete greenhorns with little work or intern experience under their belts. But the global financial crisis has somewhat dulled this demand. This may be fortunate as these Chinese engineers often lack creativity, hard skills, international exposure, and the confidence to take initiative (foreign firms will train this into their employees, but the Chinese firms fall flat on this point) – hardly an attractive workforce to pull from or return to.

After Simon finished his despairing expose, Cao, a research fellow at the Levin Institute, stepped up to the place of Chinese returnees from study abroad programs. Each year, China receives some 70,000 returnees, 33 percent from our fine nation, 65 percent of whom have attained the highest degrees in their fields, and half of whom stay on in the U.S. for four years before returning to China. Just short of full international exposure and identity and lacking professional networks in China, these talented individuals are caught in a state of flux, unable to get a job. Perhaps, Cao speculated, these wanderers will take on the Taiwanese model and start new firms, and with them a wave of technological entrepreneurship in China.

For now, though, this “talent shortage” in Chinese science and technology labor pools will hinder economic growth. In time, foreign firms will attract the best and brightest Chinese professionals, drinking up China’s talent milkshake (Drainage! Drainage, Eli, you boy!), leading to the real possibility of what Simon calls “talent wars.” As of yet, though, America remains number one in matters of technological innovation – a hint of security in our perpetual, existential fear of the coming year of the dragon.