China is facing a new and gradually building demographic dynamic – a decline in the number, and a shift in the nationalities, of expatriates in the country. As the number of expats from the West dwindles, they have been replaced to some extent with a growing number of expats from countries in the Global South. This changing mix has wider implications, not least for businesses in China itself and the West. Empirical studies show that migration and the presence of foreigners increases international trade and foreign direct investment (FDI) by reducing information and transaction costs, as well as fostering innovation. Furthermore, expats can bring people-to-people exchanges, ideas and knowledge transfer. They can build cultural bridges to help improve understanding and reduce ethnocentrism.
China’s dwindling expatriate population, especially in its capital, has attracted increasing attention and comment, including from the media. Not only individual examples illustrate this development, but a report published in late October by the Beijing International Talent Exchange Association also highlighted it. The report found a 40% drop over the decade, from 37,000 to just 22,000 foreigners living and working long term in Beijing. That equates to just 0.2% of the city’s workforce and 0.1% of its population.
This situation is even more stark in Shanghai, where the expat population is collapsing, with a massive 64% decrease in the foreign population in just five years, from over 200,000 in 2018 to just 72,000 by 2023, the South China Morning Post reports.
