China's rising tech scene threatens U.S. brain drain as 'sea turtles' return home

SHENZHEN, China — Between baskets filled with hard drives, memory sticks, LED lights and countless other bits of technology hardware, Jason Gui found what he was looking for: a handful of tiny batteries.

His business partner, Tiantian Zhang, whipped out her phone to pay for them via WeChat, the all-in-one messaging and payments app ubiquitous in China, and transferred about 4 yuan, or $0.60, for each battery.

The bustling wholesale market with its rows of vendors is part of Huaqiangbei, a subdistrict in the Chinese city of Shenzhen that has become known as the “Silicon Valley of hardware.”

For Gui, it’s better than that.

Silicon Valley was “a little bit slow for us,” Gui said over his workstation at Hax, a startup incubator in Shenzhen. “If you were to do this in the U.S., you would just be importing the same materials from China anyway.”

Gui, 28, and Zhang, 30, are known as “haigui,” or sea turtles, a term for foreign-educated Chinese people who have returned to China.

About 80 percent of Chinese students who get degrees abroad now go back — up from about 33 percent in 2007, according to China’s Ministry of Education. Some 15 percent take jobs in China’s booming tech sector.

That has implications for the United States, with experts worrying that as China turns more attractive for talent, the U.S. will lose out.

“If there are talented people who would be willing to stay, we need to keep them,” said James Lewis of the Center for Strategic and International Studies, a Washington think tank.

Lewis added that uncertainty over immigration has made that harder, just as China “has put a huge effort into enticing these students back.”

From Silicon Valley to Shenzhen

Gui and Zhang returned to China to start their company, Vue, after graduating from the University of Pennsylvania in 2013. Along with an American co-founder, Aaron Rowley, they make smart glasses that track wearers’ activities and connect to their smartphones to play music and accept calls. Cheap and ample products make it possible for them to iterate quickly, turning a prototype into a finished product in a matter of days.

Gui and Zhang initially moved to San Francisco after graduation. But they accomplished less in a year there than they did in a three-month trip to Shenzhen.

Gui’s and Zhang’s office sits just upstairs from the sprawling market, and their factory is an hour’s drive away. That proximity has saved them time and money, and the pace is faster in Shenzhen, Gui said.

“People work really hard until really late,” he said.

More on MSNBC’s “On Assignment with Richard Engel” Made in China Sunday at 10 p.m. ET

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