China pledges to welcome foreigners to boost innovation, investment and business

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It is one of the more difficult pieces of paper to secure: a Chinese green card. Since 2004, China has only handed out roughly 800 a year. More people, on average, get North Korea tourist visas stamped into their passports.

Demand for permanent residency in China has not been overwhelming, either, as smoggy skies and rising pressure on foreign business send workers and companies fleeing to better air and opportunities elsewhere.

Now, however, as China's economy slows, it is pledging to make its green cards easier to get – conferring on foreigners rights to invest, own property and use social services – as part of a strategy to lure in people and ideas.

New national guidelines released this week call for authorities across the country to loosen work restrictions on foreign students, create opportunities for investor immigrants and ease green card acceptance for entrepreneurs and top scientists. The document even suggested the country contemplate setting up an immigration bureau.

It's a measure of the changing circumstances in China that a country long skeptical of foreigners – and, in recent years, increasingly hostile toward outside influence – now wants more people to come in hopes they can kick-start new innovation, investment and business building.

In percentage terms, China today remains near the bottom of the world for number of foreigners living inside its borders. The latest census counted fewer than 600,000 non-Chinese. The sparse history of granting green cards illuminates how hard they have been to get: one went to a German in 1986, four to other foreigners in 1991. New rules in 2001 promised a more open system. But that program, mocked as little more than an extended visa, is only open to those with significant investments in China or a record of "outstanding contributions" making them "of special importance" to the country.

Beginning last year, however, several jurisdictions began experimenting with more change: Any foreign student educated in Shanghai can now work in that city, and any person making more than $126,000 a year can apply for a green card after four years. Beginning March 1 in Beijing, an ethnic Chinese who holds a PhD and works in the Zhongguancun high-tech park can immediately secure a green card.

The guidelines released this week by the Central Committee of the Communist Party and the State Council, China's Cabinet, set the stage for similar green card programs to be unveiled nationwide, although like in Canada, provinces will be free to adapt their own rules.

Wang Huiyao, director of the Center for China and Globalization think tank, likened the guidelines to the country's first law allowing foreign joint-venture companies, which was adopted in 1979 and "ushered in several decades of China's opening up."

"In the last 35 years, China concentrated on attracting foreign financial capital. For the next 30 years it will perhaps transition to attracting foreign human capital," said Mr. Wang, whose think tank consulted with government on developing the new guidelines.

For workers, "China could be the next gold-rush place" as the country pushes to transform to a more innovative, service-based economy, and seeks a new suite of skills.

The welcome mat has not, however, been laid for everyone. Earlier this week, as one example, China published a new regulation barring foreign firms from distributing online media games and creative content inside the country, the latest in a broader war against Western influence waged under president Xi Jinping. New rules have constrained the work of NGOs by barring them from foreign funding, and China has arrested at least one foreigner who worked with human-rights lawyers.

Fully 77 per cent of firms surveyed recently by the American Chamber of Commerce in China said they felt "less welcome" in the past year; a quarter either have or plan to relocate some of their operations out of the country.

That's in addition to major changes at companies operating inside China, who are stripping expats from their payrolls. "Lots of companies have been replacing senior managers, which were traditionally expat roles, with local professionals," said Max Price, a Beijing-based partner at global executive recruitment corporation Antal International. Of the 1,000 current China job vacancies Antal lists, only three are for foreigners. "It used to be 5 or 10 per cent of all roles," Mr. Price said.

China now counts roughly 16 million overseas Chinese; it's those people who are most likely to return, said Colin Friedman, the founder of China Expert International, a consultancy that helps new arrivals to China.

"As China becomes more and more attractive from an income perspective, the Chinese who have studied and worked abroad are returning," he said.

"And as more of those return, there will be less need for foreigners."