China aims at the heart of Silicon Valley.. Will it succeed in stealing the talents?

Will China manage to kidnap rare talents and pull the rug out from under their feet? Silicon Valley? Or will Silicon Valley remain an invincible stronghold of innovation and creativity? This key question looms large in light of the competition between advanced economies, especially between the two largest economies in the world, which raises questions about the future of technology and the global economy.

As Western governments make it harder for China to access sensitive technologies — a trend expected to continue under the administration of US President-elect Donald Trump — many Chinese companies are trying to get ahead by luring the best engineers in fields such as advanced semiconductors and artificial intelligence, according to to the report published by Wall Street Journal and which was seen by Sky News Arabia under the headline “China lures tech talent with attractive job offers… and the West panics.

The report explains: “Chinese companies are focusing on several technology hubs, including Taiwan, parts of Europe and Silicon Valley. Some hide their Chinese origins by forming local projects that employ workers to avoid attracting the attention of local officials. That’s prompting officials in the United States and Europe, who many believe… “If hiring is a normal business activity that shouldn’t be restricted, they’re facing the question of whether more effort should be made to oversee the practice.”

The battle to attract talent between China and the West

The report states that the management of Zeiss SMT, which specializes in the production of components necessary to build the most powerful semiconductors in the world, received disturbing news last fall that Huawei Technologies, a Chinese technology company, tried to attract its employees as employees. who had access to the knowledge received… Sensitive to Zeiss received messages on LinkedIn and phone calls from Huawei representatives, offering them salaries up to three times their salaries to join the Chinese company.

This sparked an investigation by German intelligence officials, who feared it could create a loophole for Huawei to access some of the world’s most sophisticated intellectual property. This was the latest sign that attracting talent has become a decisive front in the battle between China and the West for technological supremacy, according to the American paper.

Taiwan, which already has strict rules on hiring Chinese, announced in September that it had launched a crackdown, accusing eight major Chinese technology companies of illegally luring talent from the island, threatening Taiwan’s competitiveness, while South Korean authorities are tightening penalties for individuals who cross … sensitive technologies illegally transferred to foreign countries such as China,

The United States and Europe remain largely open to employment for most Chinese companies. But European intelligence officials say they are watching with concern attempts by China-linked parties to co-opt experts from the continent’s high-tech companies. US intelligence agencies in their latest threat assessment stated that they believe that… China It is trying to use talent recruitment as one way to become a science and technology superpower.

China is making employment a priority, especially for competing technologies such as artificial intelligence, with the government’s plan to develop artificial intelligence in 2017 calling for attracting the “brightest” talent, including “leading international scientists” in fields such as machine learning, self-driving and intelligent robotics.

Combining cost advantages and innovation

In an exclusive interview with the “Ektisad Sky News Arabia” website, economist Dr. Abdullah El Shenawi, professor of economics at Zagazig University, said: “China ranks fifth in the list of the twenty most innovative economies in the world, according to the Innovation Index classification, and it is noted that China is pumping more and more inventions and innovations into its veins, because it is trying to control all products and innovations, and anything related to industry on a global scale, of concern to the United States. and the West”.

But if China can combine its cost advantage with its innovation advantage, or at least achieve parity in innovation, the challenge facing innovative industries in Western countries will become even more important. So the main question facing these countries is to what extent China has become or will soon become a leader in innovation, or at least on par with the leaders in innovation. If China is able to become a leader in innovation, this development poses a great threat to Western countries and their companies because China will be able to combine quality, innovation and cost, he said.

In light of the above, we ask the following question: Is China pulling the rug from under Silicon Valley’s feet, Dr. El-Shenawi responds, “China is very similar to what the Asian tigers were 20 years ago? except in this case it’s not a tiger, but a dragon. Breathing fire on government-provided steroids, it has shown it can be a competitive global producer of technologically complex goods, and has made rapid progress in emerging industries such as robotics, artificial intelligence and technology. China’s global share in advanced industries has grown over the past 25 years, and this is confirmed by the structural transformations taking place in the economy from low-cost industries to knowledge-intensive industries, and innovation is the key to the success of this transformation.

Steps to attract talent

El-Shenawi explained that as part of China’s efforts to pull the rug from under Silicon Valley’s feet, it has done the following:

• Giant Chinese tech companies have sought to intensify their search for artificial intelligence talent in Silicon Valley amid US restrictions.
• Several Chinese tech companies have stepped up efforts to establish artificial intelligence research and development teams in Silicon Valley.
• Industrial companies are offering lucrative incentives to attract top American talent, aiming to strengthen their research and development foundations before potentially tougher restrictions are imposed on Chinese companies under the administration. Trump.
• Chinese companies – Alibaba, BiteDance and Meituan – have expanded to California, seeking experienced professionals from American competitors to catch up in the competitive race to develop generative artificial intelligence.
• As part of circumventing US restrictions banning the export of advanced artificial intelligence chips from NVIDIA to Chinese companies, Chinese technology companies or their affiliates have acquired advanced artificial intelligence chips under the name of their own data center in the United States. These chips are necessary for the development of artificial intelligence models, and the lack of access to them is a major obstacle to research and development.
• Providing huge government subsidies or other money allows companies to offer elite foreign tech geeks exorbitant salaries that no one else can match.
• Successful bids aren’t just depriving US, European and Taiwanese tech companies of some of their best workers. It may even strip him of the intellectual property secrets that former employees pass on to their new bosses – fueling Beijing’s efforts to speed up the country’s high-tech sector in the process.

Since China’s efforts to attract key tech workers from abroad are ostensibly classic commercial activity, based on capitalist principles of paying valuable employees what the market will bear, governments in Europe and America have failed to take much legal or formal labor action against these.. .Practice, but Silicon Valley has stepped up checks employees due to the threat of Chinese espionage, as US intelligence agencies said China’s recruitment of foreign scientists, its theft of US intellectual property and its targeted acquisitions of US companies pose an unprecedented threat to the industrial base. American, according to an economics professor at Zagazig University.

He concluded by saying, “If China has difficulty becoming an innovative country and remains largely an imitator, the threat facing America and other related technology economies will be less, as long as America is able to innovate at high speed.” it is likely to maintain a leadership role in advanced technologies, even if China quickly copies foreign innovations, but if China is able to develop new innovations before America and its allies, or at the same time, its ability to displace American companies and technological capabilities. And its allies are becoming more likely, especially as China benefits from economies of scale and the government’s focus on best-in-class global science and technology policy to increase competitiveness.

Relying on financial incentives

For his part, economic expert Hussain Al-Qamzi said in an exclusive interview with the “Ektisad Sky News Arabia” website: “Global technological superiority requires a strategy to attract talent, and China is intensively targeting leading minds in the field of semiconductors, artificial intelligence and other advanced fields.” China’s efforts to attract Western talent are huge and rely heavily on financial incentives from Chinese companies, often supported by the government, offering salaries much higher than those in Western markets, sometimes several times higher than those in the West. market, to attract employees one of China’s main goals is to attract talent in the chip industry. Artificial intelligence and robotics.

He stated that Chinese companies are hiding by establishing local companies or using intermediaries in areas such as Taiwan And in Europe, Chinese companies sometimes resort to engaging through intermediaries based in Singapore and Hong Kong, or cooperate with local entities to reduce controls, to overcome boycott restrictions and technology transfer bans imposed by the United States and the European Union.

Challenges

However, the biggest challenges facing Chinese companies are reluctance to hire talent due to concerns about their reputation, cultural incompatibility and fear of being accused of stealing intellectual property or violating boycott laws, according to Al-Kamzi, who pointed out that countries such as Taiwan and South Korea introduced strict sanctions for leaking sensitive technologies, Taiwan, for example, imposes up to 12 years in prison for violators. The United States and the European Union are implementing stricter checks on Chinese acquisitions and partnerships.

However, economist Al Qamzi explains that the real challenge is that even if China succeeds in attracting talent, it still faces export restrictions on vital equipment, such as ASML’s EUV lithography machines, which are essential to the production of advanced intelligence agencies. carefully monitor talent recruitment efforts and intervene in investigations to discourage applicants from accepting employment.

Overall, China’s talent acquisition strategy has clearly accelerated its technological development. Successful examples, such as SMIC’s seven-nanometer chip manufacturing, stand out as evidence of the potential gains from these efforts. However, the West retains several advantages that make it difficult for China to completely turn the tide, especially American technology, which is deeply integrated with centers of innovation, venture capital and cooperation networks that are difficult to replicate.