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U.S.-Asia Business

Dominic's Take: Targeting Chinese Students and Entrepreneurs in the U.S. is the Wrong Way to Battle Beijing

June 27, 2019
Dominic Ng, Chairman and CEO of East West Bank
Dominic Ng, Chairman and CEO of East West Bank, remarks on the Washington’s program of targeting students and professionals of Chinese descent

The targeting of students and professionals based on Chinese origin is damaging to U.S. competitiveness.

As U.S.-China frictions have escalated in recent weeks, rhetoric has grown increasingly ugly and hostile. Like most Americans, I am concerned that the clash in U.S.-China policy stances is playing out in cultural terms, with measures singling out students and professionals of Chinese descent. Not only are these actions antithetical to American values, they fail to assure practical U.S. interests and instead hurt our long-term competitiveness. Can we be smart and strong at the same time?

Casting China as a “whole of society” threat

While previous U.S. administrations have had policy differences with China, the current White House and national security community now describe China as a society and culture in wholesale opposition to the West. In his testimony before Congress in January last year, FBI Director Christopher Wray claimed that Chinese students and researchers represented a “whole of society” threat to the American way of life. Senior State Department official Kiron Skinner went a step further in racializing the conflict, remarking that the U.S. is facing “a fight with a really different civilization and a different ideology…the first time that we will have a great power competitor that is not Caucasian.”

Not only is that statement factually incorrect, it sets up a dangerous winner-takes-all scenario, in which the U.S. and China can benefit only at each other’s expense. This culturally charged, zero-sum mentality has already translated into policies restricting access of students and professionals of Chinese descent to the United States. In early 2017, Trump limited the scope and the length of time that recent graduates could participate in the Optional Practical Training (OPT) program, an important channel for Chinese students to stay in the U.S., especially STEM (science, technology, engineering, and math) majors. Last year, the government shortened the length of visas for Chinese students in robotics, aviation, and other high tech areas from five years to just one; the State Department has also increased its scrutiny of students in these and other fields, causing major delays and uncertainty in obtaining visas. In the same year, the U.S. also dramatically slowed the approval process for U.S. companies to hire Chinese employees in semiconductors and other advanced technologies that fall under U.S. export control regulations.

Long-term damage

These anti-Chinese comments and policies run counter to our country’s moral values and harken back to shameful chapters in American history that we never want to repeat. Let us remember that our diversity is the very foundation of our strength. Chinese immigrants were part of America from the beginning and have made significant contributions to this society. For example, this year marks the 150th anniversary of the completion of the transcontinental railroad, which was built with the blood, sweat, and tears of up to 15,000 Chinese laborers, who made up about 80 percent of the total workforce. We need to celebrate that history and stand up against racially charged language to ensure that we are not falling back into the dark ages of the “Chinese Exclusion Act,” signed into law in 1882, which prevented immigration of and institutionalized discrimination against an entire ethnic group for several decades in the early 20th century.

Group of foreign exchange students sitting in classroom
(Photo credit): Street Studios
“Let us remember that our diversity is the very foundation of our strength. Chinese immigrants were part of America from the beginning and have made significant contributions to this society.”

-Dominic Ng

Racially charged and irresponsible rhetoric also threatens our own economic interests, both immediate and long-term. For one, limiting Chinese students and tourists will harm many local economies. Education and tourism are often overlooked and extremely valuable U.S. exports. Students from abroad spent an estimated $39 billion during the 2017-2018 academic year, supporting more than 455,000 jobs, and there are twice as many Chinese students in the U.S. as those from any other country. A similar trend in tourism is already causing economic repercussions. The U.S. Travel Association estimates that Chinese tourists spend on average $6,700 per person while here, much higher than other international visitors, and there is ample room to grow. In 2015, the Association predicted that Chinese tourists could more than double from about 2.6 million to nearly 6 million by 2021. However, the number actually fell 5.7 percent last year for the first time in 15 years amid growing anti-China sentiments and a travel warning from China’s government. A recent report predicts that the continued decline of Chinese tourism can result in an $18 billion hit to the American travel industry.

More importantly, foreign students and professionals are an indispensable addition to America’s talent pool and long-term competitiveness. According to the National Science Foundation, foreign citizens now account for more than half of graduate students and two-thirds of postdoctoral researchers in engineering.

Nurturing talent

Chinese citizens in particular are a major source of talent in some of the most consequential technologies. They represent one quarter of individuals doing advanced artificial intelligence research globally. Over half of this group was educated in the U.S., and almost 80 percent of those that received PhD’s in the U.S. decided to stay and work here.

Those students often stay and become valuable members of American society. Immigrants are a core driver of U.S. startup companies in the technology sector, and they make up nearly 33 percent of all entrepreneurs in the U.S. More than half of the billion-dollar start-ups over the past 20 years in this country were at least partially founded by a non-U.S. born individual. There are many examples of successful U.S. technology companies that were founded by immigrants of Chinese descent. Eric Yuan, a native of Shandong Province, came to the U.S. in 1997 and founded videoconferencing company Zoom, which recently went public at a $16 billion valuation. Ming Hsieh from Liaoning Province, founded Cogent Systems which provides biometric identification services that the Department of Homeland Security has relied on for years. Yahoo, YouTube, and semi-conductor firm Nvidia were co-founded by Chinese immigrants from Taiwan. There is a long line of motivated Chinese entrepreneurs looking to replicate those successes.

Let’s not shoot ourselves in the foot; we can’t take America’s attractiveness as a place for eager and highly skilled Chinese to live and work for granted. If we want to stay competitive as a nation, it is crucial that we cultivate and retain highly talented people, and encourage those who study in the U.S. to stay here and contribute their ideas and capabilities to benefit American society. On our current path we run the risk of alienating an entire generation of Chinese talent, to our own detriment.

"If we want to stay competitive as a nation, it is crucial that we cultivate and retain highly talented people, and encourage those who study in the U.S. to stay here and contribute their ideas and capabilities to benefit American society."

-Dominic Ng

Female Chinese scientist working in a lab
(Photo credit): zorazhuang

Lining a small yard with high fences

What is a better way for the U.S. to respond to intellectual property theft and other illegal behavior connected to Chinese entities and individuals?

  1. Any solution must first of all be independent of nationality or origin. The language we use to address bilateral problems must be free of recriminations based on race or culture. Viewing U.S.-China tensions as an inevitable and societal conflict will continue to justify policies that cause unnecessary damage to lives and bottom lines. In the same vein, regulations and investigative procedures should be non-discriminatory, objective and transparent.
  2. Policymakers need to clearly define and minimize the areas of our economy to be walled-off from foreign participation, using a scalpel rather than a bludgeon. The guiding concept should be one of “small yard, high fences,” as described by former Defense Secretary Robert Gates—leaders need to ascertain and spell out which specific technologies are directly relevant for U.S. national security and draw appropriate strategic boundaries. The same goes for cutting-edge primary research or applications relevant for defense. For example, preventing all Chinese participation in U.S. artificial intelligence or biotechnology research and development would be overblown and unnecessary from a strategic security perspective.

    So far, the Trump administration has been building incoherent fences around entire swaths of the economy and higher education. All parties would benefit by partitioning along a narrower range of technologies, like quantum encryption or hypersonic propulsion. Once boundaries like these are clearly defined, non-covered activities should be open to foreign participation. Fencing in a smaller yard would help regulators to more effectively screen for harmful activity within those bounds, while limiting the collateral damage to neighboring sectors.

  3. We need to aggressively enforce the laws and adopt rules to effectively counter undesirable behavior in the areas that are not fenced off. For example, if we are concerned about researchers with certain affiliations at U.S. universities, we need to improve our background checks to identify problematic individuals and keep them out. Another idea is to work with allied nations and create a list of companies who stole intellectual property and limit their access to our markets. Strict law enforcement with heavy penalties on those who break the law, whether from China or any other country, will be an important part of any solution, but the grounds for investigation into espionage must be non-discriminatory and based on facts, rather than on race.

We can invite greater foreign participation in our economy while protecting American intellectual property, but we will need to adopt clear and highly targeted measures. In doing so, we can have both national security and multicultural strength. As the late President George H.W. Bush said, “We are a nation of communities... a brilliant diversity spread like stars, like a thousand points of light in a broad and peaceful sky.” Let’s keep that vision alive.

An abridged version of this editorial first appeared in the Los Angeles Times.

Read more of Dominic’s Take on U.S.-China business