WANTED: "high-end foreign talents"

Adam Smith, the legendary economist, once said that it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.

The day before yesterday, China had announced that 10-year visas will be offered to "high-end" foreign talents. To know whether you are part of the elites or not, you can refer to the evaluation criteria set by the PRC. However, it is not necessary to pin our hope on being included. With reference to the list, those qualified are technology leaders, entrepreneurs, scientists and not to forget Olympic athletes, Nobel prize winners and directors of "world famous colleges of music fine arts and arts" are included as well.

China introduced the ranking system in 2016 in order to lure oversea specialist, and to lower the number of low-skilled foreigners (Ouch, it hurts, since honestly speaking, I belong to the latter group).

Approximately 50,000 talents will be benefit from the policy. Not only them, but their family would be also eligible to apply for the 10-year visa.

Why she is so keen from luring talents from oversea? What could she benefit from implementing the policy? Why only talents but not any other ordinary foreigners?

A-hem, perhaps I shall begin my economics explanation and show you all the magic of economics. *smirks*

In short run, generally, short-run, as well as long-run aggregate supply, would increase.

Short-run aggregate supply (SRAS) indicates the positive relationship between short-run aggregate quantity supplies and the general price level. Long-run aggregate supply (LRAS) is the potential output level of an economy. Quantity and quality of factors of production (e.g entrepreneur, labor, capital & natural resources) of an economy, in addition, it's production technology.

Firstly, talents coming to China will expand the quantity of labor. Then, since those specialists are considered as the top master-hand in the world, beyond all doubt, they enhance the quality of the production factor (e.g labor). Hence, rising China's productivity. Moreover, in the list of high-end talents, academicians of National Academy of Engineering are included too. With those engineers, how can the production technology not become advance?

*A small remark: whenever LRAS moves, the SRAS moves as well. However, if only SRAS move, LRAS will not be affected.*

This policy will lead the general price level to call from P1 to P2 and the output to increase from Y1 to Y2.

The short-run equilibrium output level (Y2), where the aggregate quantity demanded is equal to the short-run aggregate quantity supplies, is lower than the new full employment output level (Y3). There is a deflationary gap.

As for the long run, the existence of deflationary gap implies that the input price will drop due to excess supply of production factors.

"Lower input price=lower production cost." It will raise the profit at a given price level. Knowing the profit would be enlarged, as a rational person, firms would increase the output and short-run aggregate supply (SRAS1→SRAS2). The aggregate output, as a result, equals the new full employment output level.

In time, the general price level fall (P2→P3).

As you can see, economics is not only about using theory to explain human behaviors, but also use it to predict how the society is going to maximize its benefit, allocate their resources to its best use in the future under specific circumstance. From aforementioned explanation, we could foresee that carrying out the policy, offering the 10-year visa to certain specialists only, could bringing the China market to a whole new level which equips with professionals from nearly all the field, which allow her to meet her economic and social goals.

It would be certainly interesting and surprising to know if anyone of you who is reading my blog currently turned out to be one of the "high-end talents"! Considering the prospective of China future development, it would be a not bad decision. If you were one of them, would you consider going to China? Perhaps, you can message me privately your final decision. ;~)