US restricts Chinese visas

Amidst economic and geopolitical tensions, America tightens its visa procedures for prospective Chinese students. Does the US gain from protectionist visa policies that could affect the flow of highly skilled workers?

Background

Graduating from American universities allows international students a period of Optional Practical Training (OPT) to secure a US-based job. Sciences, Technology, Engineering and Mathematics (STEM) graduates are given the longest OPT period of up to three years. Once a more permanent role is secured, the H-1B visa allows US employers to employ foreigners in specialist roles temporarily. An H-1B visa is issued for a period of three years, which is extendable for up to six years. The H-1B program is geared towards feeding exceptional performers into the green card program.

Immigration policy was a signature issue of President Trump's presidential campaign. The Trump administration embraced the Reforming American Immigration for a Strong Economy (RAISE) Act in August 2017. The RAISE Act seeks to reduce levels of legal immigration to the United States by halving the number of green cards issued.

Analysis

In 2015, China issued a strategic plan called ‘Made in China 2025,’ that moves the country away from manufacturing cheap, low-quality goods that takes advantage of labour costs to producing higher value products and services. The plan focused on robotics, aviation, engineering and hi-tech manufacturing. China sought to use their scientific and technological engagement with more advanced nations, including the US, to boost their efforts.

The US-China trade war is primarily motivated by competition for superiority in advanced technologies that provide an economical and military edge. US authorities have accused China of employing unfair means to gain an advantage. They contend that China employs tactics that include forced technology transfers, intellectual theft and industrial espionage. Since 2004, America has issued reports documenting allegations of specific thefts and costs of up to US$600 billion per year.

Recent reports suggest that Chinese students in the robotics, aviation, engineering and hi-tech sectors have faced harsher visa controls in the US. Chinese nationals currently make up a third of international students in the US. Approximately 36% of these study STEM-related subjects.

The Trump administration recently cancelled a policy that allowed Chinese nationals to secure five-year student visas. A State Department official in a June 2018 Senate hearing said that Chinese students in “sensitive fields” may be subject to additional screening at American embassies and consulates when applying for visas. Some Chinese students have described additional reviews that delay their academic and professional prospects. President Xi Jinping recently urged countries to treat Chinese scholars and students fairly.

The US views the decision to grant visas as an issue of national security. American officials had envisioned their visa system as one which attracts, and retains, some of the brightest minds to the country. For China, a brain-drain forces them to continue to focus on manufacturing low-cost goods. Chinese authorities promote the ‘Made in China 2025’ initiative as a method to develop their domestic, high-value ecosystem. The Chinese would, therefore, bring highly-skilled, foreign-trained Chinese nationals back to China, creating a sense of reverse brain drain. 

Counterpoint

While international students account for just over 5% of the entire US student population, they were responsible for over US$32 billion in contributions to the economy. According to the National Association of Foreign Student Advisors (NAFSA), for every seven international students, three American jobs are created. In a study of American startup companies valued at least US$ 1 billion, it was found that nearly one-quarter of such businesses had a founder who first came to the United States as an international student.

Experts at the recent Harvard College China Forum concluded that collaborations between the US and China delivered the best scientific research. The quality of American scientific output may take a dip as a result of China-US competition.

The US has previously dealt with issues of systematised racial discrimination. The visa policies may racially profile Chinese-background students, restricting them from the American education system. The Committee of 100, a non-partisan grouping of prominent Chinese-Americans, have condemned racial profiling where Chinese-Americans are targeted as foreign agents.

Assessment

Our assessment is that the US’ plan to restrict the flow of students is aimed at deterring China from employing unfair trade practices, which is at the heart of the current US-China trade imbroglio.  

In the long term, we believe that the policy will stifle the free flow of ideas and personnel in scientific endeavours, proving detrimental to both countries. Increased racial tensions in the US against Chinese-Americans may accelerate China’s efforts to develop indigenous capabilities through returning Chinese. We estimate that international students will look to other advanced nations for higher education and skill development. This takes away from America’s historical edge in attracting and retaining global talent through immigration.

India Watch

Indian high-skilled workers are likely to be affected by H-1B and green card restrictions. Additionally, dependents of these workers may have their work permits repealed by the Trump administration. Indian spouses typically accompany their partners overseas. Breaking up the Indian family-centric architecture is likely to deter workers from settling in the US long-term. Indian students are unlikely to be especially targeted by American authorities, considering the lack of security-concerns surrounding them. However, racial discrimination and H-1B policies may impact the number of Indian high-skilled workers and students willing to consider the US as a destination.

Image Courtesy: Chensiyuan [CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0)]