How China Is Hoping to Attract Tech Talent

0:00Hey, Louise. How are you doing this week?

0:02Louise Matsakis:I'm good. I'm excited to be here covering for Mike this week. Especially considering that it sounds like there's a lot going on outside of your apartment. Yes. There is a giant sinkhole on my block, so I currently have no running water. Very exciting. And yet you're podcasting through it? Incredibly grateful. Of course, Lauren. Nothing would get in the way between me and podcasting. Well, thank you for being our guest co-host two weeks in a row. It's a really busy time for everyone. And I'm particularly excited to have you on the pod today because of the topic we're going to be discussing. Before we dive into it, we have another colleague joining us today, too, Zai Yang.

0:37Hey, Zai, how's it going? I'm good. I'm enjoying the last warm day of New York. I think the highest is 80 degrees today, but it's all down here from now. So, Zai, you recently reported on something that went down right after the Trump administration announced last month that H-1B visa holders, which is one of the most popular work visa programs in the country, would need to pay a hefty new$100 ,000 fee. You spoke with a source at the time who you identify as Sheyoun about her direct experience. Tell us briefly what happened to her. Yeah. So Sheyoun, she works for a semiconductor company in Silicon Valley.

1:18And she has just been on a six-week business trip that ended in Bangkok. So after that, she was planning on, I think, spending two or three weeks' time at home in China. So she was just on this flight from Bangkok to Hong Kong to his home city in Wurumqi. And then right as the plane was touching down, she connected to the internet and saw that Trump announced this new$100 ,000 H-1B visa fee that could apply to her. So within the next three hours, she was panicking. She was talking with her friends about what she could do. And then she immediately got on a plane back to the United States through Shanghai and then to Los Angeles.

1:54So it really is one of the examples of a lot of people like her who are on H-1B visas, but outside of the United States, who was really struggling to figure out whether they would have to pay$100 ,000 if they just didn't return to the United States in 24 hours. And that was really the latest of a series of immigration changes under the current Trump administration. is making a lot of people unsure what their future life will be as an immigrant worker in Silicon Valley and broader U.S.

2:25This is Wired's Uncanny Valley, a show about the people, power, and influence of Silicon Valley. Today, we're talking about the state-of-work visas for tech talent. The Trump administration's recent announcement that the new H-1B visa holders would need to pay a fee of$100 ,000, created a wave of confusion for a lot of tech workers and their employers. The move cemented the administration's ongoing crackdown on visas, and it stands in stark contrast to China's approach. China announced a new visa program designed to attract young professionals and people with degrees in science and tech to study and do business there.

3:04We're going to dive into the impacts these different approaches could have on the tech industry, from the talent pipeline to the future of innovation. I'm Lauren Good. I'm a senior correspondent at Wired.

3:15Louise Matsakis:I'm Louise Matsakis, senior business editor. And I'm Zhe Yang, senior writer covering tech and business in China. So Zey, you were telling us about Shae Yun's experience and how she had to turn all of her plans around and found herself in this migratory limbo when news broke of the new fee for H-1B visas. There's been some additional reporting since then around what the rules and fees actually are for H-1B visas now. But let's take a step back to how these visas actually work for listeners who are not familiar. And then we can talk about why the new directive caused so much chaos. How do they typically work?

3:52So the H-1B visas were first introduced in 1990. So they have been around for over 30 years. And the best way to understand it is really the easiest visa for people with a bachelor or advanced degree to get to be able to work in the United States legally. And so you're talking about a lot of people who either receive their higher education back home or inside the United States who are relying on this pretty stable visa program to get an office job, a teaching job, a hospital job in the United States. And in the past decade, what we have seen is that the Silicon Valley, the tech companies, have really been taking advantage of this program because this is a way for them to bring in thousands of skilled workers who have advanced degrees to work for them.

4:36And that's why we're seeing that some of the big tech companies are, every single year, the largest sponsors of H-1B visas. There is a cap on the number of visas that are allowed, right? And then the employers actually have to submit the workers that they want to sponsor. So talk a little bit about that process. Yeah, exactly. I think the first requirement for H-1B visa is that you have to have a full-time job. And your employer has to be the one who's willing to pay the lawyer's fee, pay the application fee to sponsor this visa application for you. And then we get to the second part, which is that there's only a certain number of H-1B visas that will be given out every year.

5:10And the number of applications is usually above that. So then you go into a lottery system where basically every single person has the equal chance, unless you have a master degree, which you get a second chance, to be drawn as the lottery winner of the H-1B visa this year. And if you don't, you have to wait a full year before you can enter the pool again. Got it. So in recent years, as you've mentioned, we've seen that companies like Amazon, Microsoft, Meta, Google, along with some really big IT consulting firms tend to be the entities that kind of hoover up the most H-1Bs for their employees.

5:44It's pretty critical to the tech industry. Therefore, this directive, you know, this new directive that came out a few weeks ago really kind of threw the industry into chaos. Why was it so confusing? Well, first of all, that weekend, so the policy was first announced on Friday, and then it was kind of updated on Saturday and Sunday. All of the language from different kind of White House officials and documents are different. Like one of the examples is that when Secretary of Commerce, Howard Lachnick, was announcing this in White House in front of reporters, he was saying that, oh, people have to pay this H-1B fee every single year.

6:19And then the second day, White House Press Secretary Caroline Levy came up and said, actually, no, it's only a one-time fee. It's completely different from what they said just a day ago. So back then, there was a lot of confusion about how much you have to pay for it. And also, one of the biggest confusion when it was first announced is that if you have already acquired H &B, like going through the sponsorship and a lot of resistance that we have just talked about, are you still going to have to pay for it? And then that was, again, explained the second day that, oh, actually, if you already have a valid visa now, you will be exempted from this new policy.

6:52But a lot of people were already panicking between those two days. Wait, why is the U.S. Commerce Secretary involved in visa decisions? Louise, do you have any insight into that?

7:02Louise Matsakis:Well, Lauren, the main reason is that Congress is not involved, right? It's pretty clear that it would take an act of Congress to actually change all of these immigration policies in a sound legal way. But instead, what we're seeing is the Trump administration is acting unilaterally to introduce these changes. And one of the main projects that Howard Lutnick, the Commerce Secretary, has taken up is raising money for the U.S. government. So this$100 ,000 fee is one example of that. And another is something called the gold visa, which I reported on with our colleague Zoe Schiffer earlier this year.

7:42Louise Matsakis:And it's this$1 million visa that seemingly any rich person anywhere in the world would be able to buy in order to immigrate to the U.S. That sounds incredibly unorthodox. I think that's, yeah, very fair. This is not the way that immigration policy usually plays out. And it's not clear at this point if anyone has actually paid for a gold visa or if anyone has paid that$100 ,000 fee. And if they did, whether they could then take the administration to court. Interesting. Okay. Well, if anyone has paid for that visa, we want to hear from you. So please contact us on our signals. I want us to talk more about what this means for the future pipeline of talent and immigration to the U.S.

8:28But can one of you tell us quickly, what are the critiques of the current H-1B program?

8:34Louise Matsakis:I think I can answer that question, Lauren. So in a lot of ways, the H-1B visa program has basically become two different programs under the same umbrella. So on one hand, a lot of these visas are going to some of the best engineers in the world. They're going to AI researchers. They're going to doctors who work at companies all across the country and hospitals and in clinics at universities. But on the other hand, a lot of these visas are going to these IT firms, which basically are providing IT support for companies. And a lot of these jobs are fairly low paying. There are technically tech jobs, but it's not necessarily this highly skilled worker that you might have in mind who maybe works somewhere like Google or OpenAI.

9:21Louise Matsakis:it's more of sort of an everyday IT job where you're, you know, fixing people's computers, maybe like, you know, troubleshooting a software problem. And so the critique of the H-1B visa is that those are jobs that a lot of Americans could do, right? Like those are not specialized skills necessarily. And there's been a lot of criticism in recent years that those IT firms are essentially abusing the H-1B visa to bring in workers who often are being exploited or who are not really working these super important jobs to our economy and that those roles could actually be taken by Americans. And is there any sense of whether or not changing the economic structure of the H-1B would actually change that?

10:05Louise Matsakis:So there have been a number of proposals that the Trump administration has floated. One of them is not making it a lottery anymore. So instead, they wanted to prioritize people who are making the highest salaries. But a critique of that approach is that you don't necessarily know when, say, someone like Elon Musk comes to the U.S., whether they're going to be, you know, a once-in-a-generation entrepreneur or whether they're going to, you know, play a hand in developing something like ChatGPT. And so having this lottery system essentially allows us to bring in a wide swath of people who are at different points in their career as opposed to only giving these visas to established experts who are at the top of the income ladder already.

10:52Right. Yeah. And certainly in academia, the best talent aren't necessarily people who are paid the most. And Lauren, Louise, I don't think you guys have heard this from me yet, but I have been through that process, too. After I graduated from grad school here, my first visa that I applied for was an H-1B visa and I didn't get a lottery. Well, at that point, obviously, I am angry, right? I was like, why is this a random lottery process? It doesn't really consider into anything. But if the way to amend that is to kind of only give it to the highest learners, well, I still wouldn't have gotten that visa too.

11:23So I do feel like there are a lot of people who are not sure if a lottery system is the best system for H1B. But again, I think they would be equally upset if we're just ranking people's salary and giving out visas on that basis only. Great point. And we're glad you made it here to Wired, Zayi. Zayi, what are some of the other stories that you're hearing from your sources and how this is going to affect them? I think we can separate into like the short term and the long term impacts. The short term is that during that weekend, the policy was announced on September 19th. A lot of people were making last minute travel plan changes because they were not sure if they don't come back to the U.S.

12:00soon enough, they will have to pay the fee. So I'm hearing from people who just landed in China, who was planning for taking a whole month off in China. that just rushed back to the United States as soon as possible. I also heard from Emily, who works in finance in New York City, who was literally on a plane to Paris for a vacation. And then when the plane was about to take off, she actually heard back from an immigration attorney that she was consulting and said, I think you should not leave the country at this point. So she talked to the flight attendant to tell the pilot that she needs to get off the plane.

12:30And the pilot actually allowed her. So that was one of the most dramatic experiences I have heard. But what I'm hearing, generally speaking, is that people are losing money. People are missing out on weddings and family holidays just to make sure they don't fall victim to the new policy. And then on the long term, there are still a lot of things unclear about this H &B visa policy. For example, people who are changing jobs, people who already got a lottery but have to transfer that to a new employer. Would they have to pay this? I think there are a lot of questions I answered at this point that they still might be impacted even though they have already gone through the H &B process before.

13:05We should also note that there's this interesting caveat to the new fee rule. The administration is going to allow certain industries or employers to secure exemptions from the administration. And this is all per the discretion of Homeland Security Secretary Kristi Noem. And critics of this are obviously worried that this could, you know, maybe create a mechanism for companies to flatter the administration for special favors, which in some ways seems to be the MO. Any last words from you guys on what you think the short-term and long-term effects of this ongoing hostility towards visa holders could mean for the tech industry?

13:45Louise Matsakis:I think it's worth noting that this new$100 ,000 fee still does not have a sound legal basis. The H-1B visa program was created through an act of Congress. It is a law, whereas this new fee was basically something that was slapped on top of that via an executive order. I think we could still see potential litigation here. This could be an issue that goes all the way to the Supreme Court. But in the meantime, it's creating a lot of uncertainty for companies. It's going to make hiring harder. And I think like so many of the economic policies that the Trump administration is introducing, it's just creating chaos and it's making it more difficult for anyone to predict what's going to happen next or to make decisions.

14:26And going back to the potential exemptions that might be given to certain industries or companies, one interesting I've observed after the announcement of the policy is that some Silicon Valley figures have been trying to see the brighter side of this, namely Sam Eltman and Jensen Huang, because when they were probably being asked about what they think of the new H-1B fees, they were saying, oh, maybe this will help us kind of like choose which direction we want to go with legal immigration. And I think my interpretation of that is that if certain industries like AI or semiconductors can get exemptions while other industries don't, it will create a clear policy advantage for these industries.

15:06So I think some Silicon Valley are also trying to see maybe this will become a good thing for them. They will create some advantage for them, but not for the others in the future. So you're saying there's a world in which the most powerful men get to shape the policy. How surprising is that? Exactly. All right, let's take a quick break. And when we come back, we're going to talk about China's counter approach to all of this.

15:35Hello, I'm Joseph Cox, host of the 404 Media Podcast. Every week we break tech news you can't get anywhere else. That includes surveillance. This idea that Ring is going to zero out crime. It's not. AI. AI is going to stick around in some fashion. That doesn't mean that the vision that these companies are selling us is how it has to be. And big tech companies.

15:57Louise Matsakis:This is a serious crime. It's being enabled by Apple and Google through the app stores. Our journalism is by humans for humans. Find the 404 Media Podcast wherever you listen and on YouTube too. Welcome back to Uncanny Valley. Today we're talking about how new rules around visas like the H-1B are shaking up Silicon Valley. Now we're going to turn our attention to China, which, unlike the U.S., is actively trying to make it easier for tech talent to join its workforce. But the story is a little bit more complicated than it seems. Louise, you recently reported on this new visa, the K-Visa, that is designed to attract more STEM graduates and workers to go to China.

16:42Tell us about this.

16:44Louise Matsakis:So we don't have all the details of this visa yet, but Chinese authorities have said that applicants won't be required to obtain an invitation letter from a specific company. That means that the visa is not tied to individual employers the way that the H-1B visa in the U.S. is. So that means a foreigner could come and have the flexibility to explore different startups in Shanghai or maybe like see if they want to join a hacker house or something in a tech hub like Hangzhou. So in a way, China is definitely seizing the moment. It's positioning itself to attract leading scientists and researchers who might be shut out of the United States.

17:19Louise Matsakis:But Chinese social media has been flooded over the past couple of weeks with angry comments about the K visa. Many people have expressed concerns that it will give foreign workers an edge over domestic STEM graduates. I think in some sense, these anxieties are pretty understandable because youth unemployment is already really high in China. And there are a ton of, you know, super qualified STEM graduates and just college graduates in general who are struggling to find work. But on the other hand, when Ziya and I started looking through some of the commentary about this visa program, there was definitely a lot of nationalism and xenophobic rhetoric, if not just outright racism.

17:55What's an example of that?

17:57Louise Matsakis:So, for example, there were some Chinese influencers who were spreading these conspiracy theories that Indians were like plotting to use the visa to immigrate to China en masse. Interesting. You've both covered China's businesses and workforce for years. Was this backlash surprising to you? I would say yes, but also no. The no is because I know China has never been an immigrant country, right? So the idea to introduce a lot of foreign talents to the country, giving them some kind of preferential treatment over others, it's definitely going to cause some kind of outrage from the population. That part I am sure.

18:34The thing is that I feel like after China has been trying to open up to the world for quite a few decades at this point, I was expecting there to be a little bit more patience from the Chinese people because China also wants to be an AI leader at this age. And right now, the only model they can look after is the United States, which has been building on a ton of immigrant talent to build the AI industry. So I was thinking maybe that kind of policy orientation will push them over the kind of like xenophobic obstacles that we are seeing. But unfortunately, the situation that seems to have happened is that it cannot.

19:09So there are some cultural challenges to this. I mean, what do you think are some of the other challenges that China will face as it tries to roll out this K-Visa and attract foreign talent?

19:19Louise Matsakis:I mean, I think the main thing is just that China, like Zai said, is absolutely not a country of immigrants. In 2020, only about 0.1 % of the mainland population was made up of foreigners, according to one estimate. And it's also worth noting that that estimate includes people from Taiwan, Macau, and Hong Kong. So, you know, these are places that are very culturally similar to China. So the number of people who come from like Africa or North America or Europe is just astonishingly small compared to the population size of China. You know, in the U.S., about 15 percent of the people who live in this country are immigrants.

19:56Louise Matsakis:That's a huge difference. So I think that it can be hard for new arrivals to adjust. It's a difficult language. There's an entirely different ecosystem of apps and programs that you have to use. You know, I remember the first time I went on a business trip to China, I needed to get the receipt for my expenses. And I was like, can you email me, you know, a PDF of my receipt? And the people at the hotel, like, looked at me like I was crazy. And they were like, we're just going to send it over WeChat. And I was like, oh, you know, there are a lot of, like, small things like that that are really different.

20:28Louise Matsakis:Whereas because for the last, you know, few decades, American culture and American tech companies have been so ubiquitous in the rest of the world, someone who comes to the U.S. from India or from Europe, they're probably going to be using the same email platforms, the same social media networks. I mean, a lot of the business norms are similar, right? Of course, there's still cultural differences. And if those people get homesick, they can find an immigrant community wherever they are. They can find food that reminds them of home. That's not necessarily the case in China. And so I think the idea of a city like Shanghai or Beijing becoming sort of a truly cosmopolitan hub that is a mix of different cultures is something that I think is really far off from now.