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Talent Cultivation

China's Leadership Factory


China's Leadership Factory


With over 100 million college-educated citizens and the most overseas students in the world, China's "three-headed" talent cultivation system sharpens skills at every level. Yet it has recently come up against its most formidable adversary…



China's Leadership Factory

By Fuyuan Hsiao
From CommonWealth Magazine (vol. 534 )

After a year of intense TOEFL classes, SAT cramming, and paying over 10,000 renminbi in fees to an overseas study agency, Lin Ting, an 18 year-old young lady from Shanghai, finally obtained admission to a private university in Southern California. When classes started in late August, she was shocked to arrive on campus and find, "It's all Chinese students here!"

China is the world's largest exporter, not only of commodities, but also of overseas students – nearly 400,000 last year. At present, one in every six foreign students worldwide hails from China.

The massive number of overseas students and even greater population of college-educated people have become the new focus of the "China threat" theory.

The True 'China Threat'

According to China's Ministry of Education, 800,000 students have returned to China from studies abroad over the past five years. The latest census indicates that China has 120 million people with a college or higher education, and her 23.91 million students in institutions of higher learning is a full 33 percent higher than the USA.

"China is experiencing the largest wave ever of students returning from abroad and foreign students coming to China to study," says Hu Angang, director of the Center for China Studies at Tsinghua University. China exports students, while it also imports students from abroad. Ticking off statistics from a report, Hu notes that Xinjiang University has over a thousand students from Central Asia and Russia presently, and over 10,000 Vietnamese students currently attend Guangxi University alone. "By 2020 there will be 500,000 foreign students in China," he predicts.

An article published in the Washington Post two years ago entitled "What We Really Need to Fear About China" provoked vigorous discussion. The article revealed that American policymakers are fearful of the number of academic papers and patents coming out of China. Currently third in the number of foreign patents, by 2015 China is expected to file more patents than the US and secure the top position in terms of sheer volume.

However, "China's real advantage is its next generation," opined article author Vivek Wadhwa. In recent years he has traveled back and forth between the United States and China, teaching university courses in both countries. He has personally witnessed the rise of China's new generation, which is what he feels should really strike fear in policymakers around the world.

Training Mechanism with Chinese Characteristics

The leaders of modern China have all treated personnel cultivation and training as the most vital strategy of national development. The previous CCP party secretary general, Hu Jintao, introduced the "1000 Talents Plan" for recruiting top executives from abroad, igniting a global human resources battle. Wang Huiyao, a commissioned specialist for China's National Mid- and Long-term Personnel Development Planning Guidelines 2010-2020, estimates that over 20,000 high-level personnel have come to China under the 1000 Talents Plan to date.

Ho-Mou Wu, who left National Taiwan University seven years ago to take up a position as CCER Langrun Chair Professor of Economics at Peking University, sits in his research office located in the former residence of Qing dynasty Prince Gong and offers his analysis of China's talent strategy. China enjoys a huge reserve of talent trained abroad, which has been returning home at a rapid pace in recent years, Wu notes. Beijing University fulfilled its own "100 talent" quota of international talent within just two years and continues in its recruitment efforts. Over that same time period the number of papers the university has generated that were published in top international academic journals has doubled.

The PRC government's unusual talent cultivation and selection mechanisms have been seen as China's strongest competitive weapon – a "Chinese characteristic" greatly different from the Western approach.

First is its unique "three-headed" organizational structure.

In a TED Talk, Eric Li, a Shanghai venture capitalist and Henry Crown Fellow at the Aspen Institute, argued that the Chinese Communist Party, which does not need to run in elections or compete with other parties, has ruled for 64 years straight and has the capacity for self-adjustment to keep up with the times, because of one distinct advantage: a tripartite organizational structure consisting of government officials and civil servants, state-owned enterprises, and social enterprises under government jurisdiction, among which personnel can transition and rotate.

The Central Organization Department (COD) lies at the core of this structure; major party personnel are selected and appointed by this agency. Former Wall Street Journal China bureau chief and American Chamber of Commerce in China chairman, James McGregor, has described the COD as the world's most powerful headhunting firm and human resource department manager.

Revolving Door for Party, Government, Business

In his book No Ancient Wisdom, No Followers, McGregor notes that the executives at 117 central-level state-owned enterprises (SOEs) in China are all appointed and controlled by the COD, and that SOE executives and government agency leaders rotate positions between government and business. In fact, one-third of China's government officials have honed their skills in the business realm.

McGregor observes that the CCP is increasingly inclined towards moving top SOE officials into high-ranking government positions. The reason for this is that SOEs have made significant moves overseas in recent years, and managing SOEs is an expedient way to develop global vision. Two years ago Su Shulin, general manager and Party Committee secretary of China National Petroleum Corporation, transferred to positions as vice secretary of the Fujian Provincial Party Committee and governor of Fujian Province.

Li Cheng, senior fellow at the Brookings Institute, also notes that SOEs have steadily become the new fount from which the Communist Party's leadership springs. Prior to becoming mayor of Beijing and vice premier, Politburo Standing Committee member Wang Qishan was the chief operating officer at both the People's Bank of China and the China Construction Bank, as well as secretary of the Party Committee. Before treasury chief Lou Jiwei, he oversaw China's investment of sovereign funds, and served as director of Central Huijin Investment, Ltd., a position he retains today.

Inside this three-headed competitive machine, the competition is fierce, surpassing any political organization around the world, according to Eric Li. Officials at all levels must undergo annual COD survey work results and ethical evaluations, and all-encompassing feedback before their performance is determined.

During a fact-finding mission to Inner Mongolia, one senior SOE director told Hu Angang, "The COD throws you out into the wilderness where there's nothing, to let you build an enterprise and hone your skills. If you succeed, you get the big boys upstairs on your side."

With over 85 million members, it takes decades of making it through stage after stage of tests and competition to climb to the top rungs of power. In Eric Li's estimation China has 900,000 branch managers and vice-managers, 600,000 department directors and vice directors, and 40,000 bureau directors and vice directors, among whom only a little over 200 squeeze into the power center of the Central Party Committee. "It takes 20 or 30 years of trial and tribulation for a cadre to make it to the top level," offers Li.

The seven-member Politburo Standing Committee is the capstone of the three-headed competitive pyramid, representing the most unique design of China's political structure: collective leadership.

The late Deng Xiaoping once declared that the CCP's Politburo Standing Committee is the key to China's leadership. "As long as nothing goes wrong with this link, China shall be as sturdy and stable as a mountain."

The seven members of the Politburo Standing Committee represent six government agencies: the CCP Central Committee, National People's Congress, State Council, Central Military Commission, National Political Consultative Conference, and the Central Commission for Discipline Inspection of the Communist Party of China. Each member has an assigned area of responsibility, dividing labor among the membership and consulting with one another.

"Taiwan has a single leader, whilst we have a collective presidency," explains Hu Angang, described as a neo leftist scholar.

From Revolutionary Party to Learning Organization

The central leadership is not constituted via people parachuting or rocketing in from other regions and positions, but via a ladder arrangement. The first step of the ladder is a party secretary position at the provincial, regional or municipal level where candidates hone their skills governing provinces before administrating the country. The second step is holding a position as a top aide to the party's collective leadership. Only after successfully climbing these rungs is one qualified to serve on the Politburo Standing Committee.

In addition to collective leadership, the Politburo Standing Committee also employs collective learning and collective survey mechanisms, enlisting think tank members monthly to speak on major domestic and international socio-economic issues. Standing Committee members must also tour the countryside on surveys and relay grassroots feedback back to the central government. During Hu Jintao's second term as secretary general, each Politburo Standing Committee member participated in an average of 43 fact-finding tours.

Enduring one life-or-death struggle after the next has forced the Chinese Communist Party to transition from a revolutionary party into a learning organization, constantly assimilating new knowledge and administrative methods. For instance, the PRC government teamed up with the government of Singapore last year to learn about how Singapore's social management framework works in such areas as management-labor relations, housing policy, community administration, and citizen services.

Local governments like Guangzhou and Suzhou have even introduced Singapore's national parliamentarian voter services model, dispatching several local Political Consultative Council members to listen to locals' concerns and help resolve issues.

"China's system for selecting its leaders is actually quite scientific, and doesn't result in lousy choices," offers one director of a Taiwanese corporate chain store that has been doing business in China for over a decade. The Chinese leadership's advisors and staff are strong, drawing from an extensive talent pool. The National Development and Reform Commission alone claims thousands of members, and each government department has its own research institute, to go along with all the universities and assorted think tanks. "How can you compete with that?"

Nevertheless, despite all its advantages in the talent wars, China is not without competitors.

Indeed, the country's most formidable adversary may be : the environment.

Wang Huiyao, former section chief of the COD's International Talent Strategic Research Task Force, warns that the smog that frequently plagues China's major cities has already scared away a significant amount of foreign talent and the best locals.

A survey published by Wang and the Beijing Institute of Technology found that nearly one-third of wealthy Chinese with personal fortunes over 100 million renminbi have emigrated abroad, while half of the remaining two-thirds still in China are also thinking about emigrating. The main reasons given for emigrating usually have to do with such environmental factors as food safety and air quality.

The PRC's State Council announced the Atmospheric Pollution Prevention Action Plan in early September, setting a fine particulate matter target of PM 2.5 for Beijing, Tianjin and Hebei; the Yangtze River Delta; and the Pearl River Delta – reductions of 25, 20 and 15 percent, respectively, over the coming five years.

After all, without clean air, even the world's strongest competitive machine and the most alluring Chinese Dream will not be enough to make people stay.

Translated from the Chinese by David Toman