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China as Context for Studying Innovation Performance Development and Modes of Global Talent Flow

China has been among the world’s fastest growing economies for the last 30 years (World Bank, 2013; OECD, 2013, pp. 9-11) during which time it has been a major attractor of foreign investment (Yifei, Von Zedtwitz, & Simon, 2007). It is also said to be the world’s largest manufacturer (United Nations, 2015). In 1990, only 3 % of the global production output by value was manufactured in China. Today, the value is approximately 25 %. For example, 80 % of air-conditioners, 70 % of mobile phones, and 60 % of shoes are manufactured in China (The Economist, 2015). Much of this progress has been attributed to advanced western technology transfers and the spillover effects of foreign investments in China (Sun & Du, 2010). It could therefore be argued that foreign investments and knowledge transfer in particular have played a major role in developing the innovation performance of China.

Since the late 1970s, the Chinese government actively encouraged talented Chinese to study abroad with the goal of ensuring they contributed to China’s innovation performance development upon their repatriation (Zweig, 2006) . Although many have returned, the ratio has not been quite as high as expected (Zweig & Changgui, 2013). As a result, China has taken measures to attract both Chinese and foreign talent in the form of launching special incentive programmes, which it is hoped to contribute to meeting the demand for high-level expertise in the key sectors of China’s socio-economic development. An example would be the Talent1000 programme, which according to its official targets aims to ‘recruit non-ethnic Chinese experts who are under 65 years of age, and in principle, have his/her doctorate granted by overseas educational institutions and are able to work in China for three consecutive years with at least nine months for each.’ These individuals are expected to be ‘strategic scientists, leading experts in science and technology, or internationalised innovative teams capable of achieving critical technological breakthroughs, advancing the high-tech industries and promoting new disciplines’ (Zweig, Fung, & Han, 2008;

With the power of China’s state-led industrial system model, which is typical of many emerging Asian countries (Reslinger, 2013), the Chinese government has also been determined to use significant public funds and political power to reduce the importance of imported western technologies on certain strategic sectors. The government has also taken action to increase both the quantity and quality of home-grown innovation in China (Abrami et al., 2014) . A practical means of contributing to innovation performance is exemplified by China’s proactive approach in establishing Chinese R&D centres in the west (see also Gammeltoft, 2006). China has also been active in acquiring western high-tech companies with access to western knowledge portfolios and senior local talent, which has often proved reluctant to move to China owing to the cultural challenges involved (Harryson & Soberg, 2009; Abrami et al., 2014, Osawa & Mozur, 2014).

Despite these efforts, scholars suggest China might well potentially be at a crossroads in terms of its economical and technological development. Although many Chinese companies, such as Lenovo, Coolpad, Xiaomi, and Oneplus in the telecoms and consumer electronics field, or Alibaba and Baidu for internet-related services and products are able to challenge global market leaders and set trends, China is still considered a context in which local R&D is diligently pursued but breakthroughs remain rare (Osawa & Mozur, 2014) . Although both economical and technological development of China are well documented, little is known of how China’s innovation performance development is affected the different forms of global talent flow.

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