Wooing Asian International Students Essential to US Tech Competition
By Tom Kagy | 25 Mar, 2025

Whether we can keep attracting Asian tech talent will determine whether the US will win the competition with China.

Of the many silly crusades advanced by the MAGA crowd, one of the goofiest is seeking to exclude Chinese students from studying in the US.  The rationale advanced by W. Virginia rep Riley Moore in sponsoring the legislation?  That Chinese students have attempted to spy for the Chinese Communist Party.

Of course "national security" has always been the anti-Asian dog whistle in the minds of people of such ilk.  They gave us Japanese American internment camps and the prosecutions of Chinese American professors for merely engaging in routine academic exchanges with Chinese universities.  

What such minds will never grasp is that US prosperity and progress turns on international academic exchanges.  It seems that to such minds the US is the fountainhead of all prosperity and progress while the rest of the world are mere needy onlookers.  They live in some distant past that never actually existed.

It would likely surprise these people to learn that such crusades have as much chance of succeeding today as the prospect of annexing Canada and Greenland.  That's because the US tech sector, especially First Buddy Elon Musk, knows that the US owes its current tech leadership to its ability to attract hundreds of thousands of talented foreign science and technology (STEM) graduates, mostly from China and India.

That's because the US produces only about 820,000 STEM graduates per year.  Less than half of them have the talent and educational attainment to contribute to the tech side of tech companies.  As a result American industry is always seeking about 470,000 highly educated foreign workers each year, judging by the number of H1-B visas applications processed.

They generally have to settle for perhaps only about 85,000 foreign tech workers given the applicable visa limitations, including even the 20,000 alotted for foreign students who graduate with advanced degrees from US universities.

As a result US industry is currently operating with a severe shortage of about 100,000 tech workers each year.  In other words, even with about 600,000 talented foreign students studying in the US in a given year (331,602 from India and 277,398 from China during the past academic year), visa restrictions make it difficult for US companies to tap more than about a sixth of that number each year.

By contrast China and India have a relative abundance of STEM graduates.  For example, in 2020 China graduated 3.67 million while India graduated 2.55 million, according to data from the CSET (Center for Security and Emerging technology).  Again, by comparison the US graduated a mere 820,000, followed by Russia with 520,000.

Perhaps more central to the issue of tech leadership is the number of STEM PhD degrees.  This year China is projected to produce over 77,000 compared with around 40,000 in the US. These PdDs are the tip of the spear when it comes to hi-tech advances.

And yet the US strives to hang onto its position as the world's tech leader.  So far it's been successful thanks to its ability — based on its traditionally high degree of freedom and prosperity — to attract many of the most talented among foreign international students and foreign workers.  In other words, the US has managed to attract an elite class of foreign STEM graduates to augment our homegrown talent.

But those days of talent abundance may be coming to an end.  Not because a few clueless MAGA lawmakers will succeed in passing Chinese exclusion laws that not even most GOP lawmakers are willing to back.  But because they are succeeding in making foreign students feel insecure and unwelcome with all the recent deportation shenanigans and anti-Chinese rhetoric.  Add to that the fact that China has been growing its tech sector to near parity with the US in many fields, giving top international students less incentive to jump through visa hoops to stay in the US.

A notable symptom of America's growing weakness in attracting top foreign tech talent is the plight of Tesla, only recently the poster child for American industrial leadership.  It is now struggling to keep from becoming roadkill to China's surging EV-makers like BYD, Polestar and XPeng.  Their access to a relative abundance of tech and engineering workers has enabled a frenetic pace of advances in batteries, innovative features and design, as well as autonomous driving.  Now BYD is able to produce an EV comparable to a Tesla Model Y for only about a third the cost (about $12,000 vs $35,000).  And earlier this week it announced the ability to charge its new models in only 5 minutes.

As a result BYD has dethroned Tesla's as the world's dominant EV maker, logging $107 bil. in 2024 sales compared with Tesla's 97.7 bil. The changing fortunes isn't a phenomenon of nationalistic competition.  In Europe, for example, BYD, Polestar and XPeng collectively outsold Tesla in February 19,800 to 15,700.  Tesla's year-over-year European sales plunged 44% while the overall EV market surged 31%.  While some of Tesla's falling fortunes may be ascribed to its founder's bizarre forays into right-wing politics, the primary reason is the superiority achieved by the Chinese EV-makers in simple value for the money.

Looking beyond mass-market consumer products, late last year Chinese AI startup DeepSeek was able to innovate structural improvements in its AI training and inference models to match and surpass US AI leaders like ChatGPT and Anthropic in standard measures of reasoning.  Its achievement was all the more notable because it had limited access to Nvidia's current-generation GPUs and built its models for about 5% the cost invested by its US rivals.

DeepSeek founder and CEO Liang Wenfeng made a point of emphasizing that his company's advances were made possible by relying on China's young homegrown tech talent with zero exposure to US universities or industry.

So how can the US hang onto its technological edge?  There is literally only one way: by hanging onto the most talented among the hundreds of thousands of foreign students who jump through many hoops to study in the US each year.  The only way to do that would be to tame the xenophobic rhetoric being spouted by the MAGA crowd.  The most talented people generally have no desire to be magnets for nationalistic or racist hate as they have options as to where they employ their talents.  If the US fails the smell test, China will welcome them back to what looks like an increasingly promising future.  All thanks to the MAGA crowd.