By Rachel Brown | on 25 March 2017
China and India have massive overseas diasporas. How do they strategically leverage this important resource?
“We are converting the brain drain to brain gain,” announced Indian President Narendra Modi in January at a celebration of Pravasi Bharatiya Divas, a holiday to honor the contribution of India’s diaspora. Chinese President Xi Jinping made similar remarks in 2014, saying that overseas Chinese “can play an irreplaceable role in realizing the Chinese Dream of National Rejuvenation as they are patriotic and rich in capital, talent, resources, and business connections.” With approximately 15.6 million Indians and 9.5 million Chinese abroad (not to mention an estimated 25 million people of Indian origin and 48 million of Chinese heritage), the nations boast two of the world’s largest diasporas. They also share many aspirations and challenges in their policies toward them: both want to benefit from their compatriots’ success abroad, but struggle with a lack of dual citizenship and quality of life issues that could deter potential returnees.
But despite these similarities, the two nations engage their diasporas in different manners. For China, the relationship has been all about bringing capital and individuals back to promote national economic development. For India, meanwhile, the relationship centers on the diaspora’s role as a source of soft power and expertise even if members remain abroad, although the Modi government now appears increasingly focused on attracting diaspora investment as well.
Nowhere is this difference more visible than in the styles through which Indian and Chinese leaders interact with their diasporas. Chinese leaders rarely meet with overseas Chinese groups during international trips and favor official domestic events such as the World Huaqiao Huaren Businessmen and Industrialists Conference or the Conference for Friendship of Overseas Chinese Associations. These meetings of besuited entrepreneurs in the Great Hall of the People are a world away from Modi’s international speeches, where he addresses non-resident Indians on their home turf, drawing thousands to arenas from New York’s Madison Square Garden to London’s Wembley Stadium. Such events help cultivate soft power among those of Indian heritage and officials hope that diaspora members can act as “informal ambassadors for India in their own country,” demonstrating the value of ties with India to foreign governments.
The economic role of the diaspora also varies starkly between the two nations. The Chinese government has historically focused on overseas Chinese communities as a source of foreign direct investment (FDI). For decades, China has both received more overall FDI than India (although India overtook it in 2015), and a larger share of investment from members of its diaspora. During the 1990s and 2000s, the Chinese diaspora contributed an estimated 50 to 70 percent of FDI, while the Indian diaspora contributed just 3 to 4 percent. In part, China was able to attract so much investment because many overseas Chinese resided nearby in Hong Kong and Southeast Asia, but the government also actively courted their support and enacted a law in 1990 protecting returnees’ interests. Meanwhile, overseas Indian populations were both more geographically and politically distant at the time, making them less able to influence the liberalization of FDI policy.
Now, however, the Modi government is hoping the Indian diaspora can mimic the Chinese example. Sreeram Chaulia, the dean of the Jindal School of International Affairs and the author of a recent book on the current government’s foreign policy, argues, “the Modi Doctrine on the diaspora aims inter alia at maximizing FDI from the Indian diaspora to motor India’s economic growth.” Modi has exhorted diaspora members to invest in social projects such as improving rural sanitation and in the past two years investment rules for Indians abroad have eased. During this year’s Pravasi Bharatiya Divas, Modi even proclaimed, “For me, FDI has two meanings. One is the foreign direct investment and the other ‘First Development of India’.” Challenges remain, however, in attracting diaspora investment as concerns about poor infrastructure, red tape, and labor market regulations must first be overcome. (The ongoing struggles of non-resident Indians to trade in old rupee bills after November’s demonetization haven’t helped allay worries either).
In addition to investment, the Chinese government has also actively recruited academics and entrepreneurs to return to support economic growth and innovation. Founded in 2008, the Thousand Talents program incentivizes foreign scholars and innovators, particularly overseas Chinese in science and technology, to work in China through a variety of financial and other benefits. But the program is not without problems including allegations of fraud, diversion of funds by universities, and tenured academics returning for only part-time positions.
While China works to entice returnees, India excels at maintaining diaspora ties and making use of those connections at home, even if many Indians remain abroad. For example, Indian engineers and tech entrepreneurs working outside the country can share knowledge rapidly and efficiently with firms in India, and these relationships have helped build the country’s large IT industry. Additionally, ethnic Indians abroad “are more likely to outsource to India than non-ethnic Indians,” according to one study of a contract outsourcing firm. While some scientists and businesspeople may choose to return, a number of economic benefits can still be realized without them doing so.
The Indian government has also gone father than China in easing travel and residency policies for diaspora members, which fosters more back-and-forth exchange. Beginning in 2002 and 2005 respectively, India began offering the Person of Indian origin (PIO) and Overseas Citizen of India (OCI) cards. The Modi government has gone a step further by merging the two cards so that many diaspora members can now enjoy lifetime visa access to India and certain educational and financial (but not political) benefits comparable to those of citizens. India’s system allegedly inspired a possible “overseas Chinese card” that was greeted with enthusiastic speculation. One Chinese blogger praised the prospect of an overseas Chinese card, noting that among Indians the “total of 11 million cards [as of 2010] have greatly promoted the return and circulation of talented Indians abroad.” However, in March, the Overseas Chinese Affairs Office of the State Council stated that no plans existed to issue an overseas Chinese card granting permanent residency, but acknowledged it as an area of diaspora interest.
Ultimately, the two nations’ different diaspora strategies may stem from their different systems of government. In China, relations with the diaspora offer economic and cultural benefits, but little political advantage. But in a democracy like India, it is savvy politics to maintain ties with diaspora members through overseas speeches and visa access. While those with PIO or OCI cards cannot vote or seek government positions, that doesn’t mean they aren’t a political force through donations and groups such as the Indian National Overseas Congress of America and Friends of the Bharatiya Janata Party. With this in mind, even as the Indian government eyes the Chinese model of using the diaspora as a source of FDI and skilled returnees, officials shouldn’t lose sight of the current model’s strengths in promoting soft power and knowledge circulation.
This article was first posted on http://thediplomat.com/2017/02/what-can-india-and-china-learn-from-each-other-about-diaspora-policy/ by Rachel Brown, a research associate in Asia Studies at the Council on Foreign Relations.