Brain Drain Out Of Silicon Valley: Overseas Chinese return home to start companies

San Jose Mercury News

"TIANJIN, China — This city in northeastern China is a long way from Sand Hill Road, home to the world's greatest concentration of venture capitalists. But a deal too good to pass up led Yong Li to leave his family in Palo Alto a few months ago and head here to pursue his dream of starting a company, with backing from an unlikely source — China's newest capitalists, its Communist leaders.

"The government is rolling out the red carpet," said Li, who rides a rickety bicycle through an open-air market every morning and evening, grabbing wok-fried meals on his way to building TerraBay Pharmaceuticals, which is working on a treatment for lung cancer. "The government takes the risks. And there are almost no strings attached."

China has quickly grasped the fundamentals of Silicon Valley innovation: Daring investments in aggressive entrepreneurs create world-changing companies. Officials across the country are luring back Chinese-American technologists and executives — many from Silicon Valley — in hopes of seeding an entrepreneurial culture that they hope will some day create world-class companies. As the U.S. economy sputters, provincial officials are finding a receptive audience on tours to the Bay Area and other parts of America."

"If you go down the streets of Beijing and Shanghai, the most common word on the signs is 'innovation,' " said Bill Miller, co-director of the Stanford Project on Regions of Innovation and Entrepreneurship. "They call it homegrown innovation.

"They are really trying to push the country up the value chain," moving beyond manufacturing products to eventually creating and designing them.

Talent-poaching has picked up in recent months as Chinese officials descend on Silicon Valley on a regular basis. "Their selling point is this: China is a big and growing market. If you don't come to China now, five years from now may be too late," said Bin Lee, founder of the Silicon Valley China Entrepreneurs Forum."

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