China's top think-tank has warned of a potential "brain drain" as a result of large-scale emigration.

More than 300,000 talented Chinese emigrants are working in high value-added industries in other countries, according to the 2007 Blue Book on Global Politics and Security, recently published by the Chinese Academy of Social Sciences. The number is rising as tens of thousands of well-trained university graduates depart the country annually.

By 2006 around one million Chinese students had studied abroad since the 1980s. The figure was 580,000 in 2003, according to statistics from the Ministry of Public Security.

And two-thirds of them chose to stay overseas after graduation. This ratio is higher than for any other country. Europe, the US and Australia are the three most preferred destinations.

"It's been a great loss for China, which is now in dire need of people with expertise, to see well-educated professionals leave after the country has invested a lot in them," said Li Xiaoli, a co-author of the report. Li attributed the wave of emigration to China's increasing involvement in world markets.

However, some experts have said it's by no means a real "brain drain" in a country with millions of professionals. According to Yang Kaizhong, an economist at Peking University, China has benefited vastly from emigrants. They helped ease the job market and send money home.

According to a UN report in June 2006, China received about US$20 billion every year from the emigrants and was one of the largest beneficiaries globally of such funds.

There's also been a knock on effect that has led to 32-60 percent increases in trade volume between China and countries where ethnic Chinese account for more than one percent of the total population, said a 2005 World Bank study.

Experts like Yang have called on the government to make the job market more attractive to professionals overseas and set up incentives to allow them to return. There are already some preferential policies in place which have paid off such as low-interest loans for start-ups by those returning.

The number of overseas-educated Chinese returning home for work soared to about 30,000 in 2005. It was 25,000 in 2004 and 20,000 in 2003. Since 2002 over 100,000 students have gone abroad annually to study, according to the Ministry of Education.

There are about 35 million people of Chinese origin scattered in more than 150 countries and regions, making China one of the largest source of emigrants in the world, according to the report.

(Source: China Daily February 13, 2007)