For years, the Harvard College China Forum brought business moguls to the university’s oak-panelled rooms, including Alibaba Group founder Jack Ma, Xiaomi’s Lei Jun, Blackstone’s Stephen Schwarzman and Bridgewater Associates’s Ray Dalio.

These leading lights of the business world are there at the invitation of students, some of whom also happen to be the children of Chinese billionaires. The moneyed classes of the world’s two largest economies thus hobnob every year in a lively exchange of ideas, demonstrating wealth’s power to bridge geopolitical rifts. 

Such scenes are now fewer and far between. US-China tensions are so fraught, even the world’s richest are struggling to bring the two sides together. Only a handful of executives from mainland China came in person to this year’s China Forum in Cambridge, Massachusetts. As for the elite students who lifted the profile of the China Forum in the past, many are gravitating home.

One recent summit organiser was Zhang, the daughter of the founder of one of China’s largest retailers. The 25-year-old, who asked not to be identified by her full name, grew up in the Bay Area with her mother, while her father stayed behind in Beijing. Her childhood straddled two cultures, thanks to this “astronaut” family arrangement that is modus operandi for China’s uber-wealthy. She speaks with a Californian accent, rowed crew at Harvard and is proficient in Spanish.

Asked if she identified more as a Chinese or an American, she called it “an existential question”. But in 2020, she decided to hit a pause on her US journey.

“It almost feels like you have to pick a side or commit to one part of the world at this point,” said Zhang, who asked that her father not be identified. In the end, she felt China had more to offer.

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“Understanding Chinese society, economy and government better is kind of a necessary thing for our generation, especially people who have links to China.”

She is not alone. She is part of a growing wave of young Chinese returning to the mainland and eschewing what used to be coveted overseas jobs and foreign citizenship. And while China is facing the world’s biggest exodus of millionaires and growing capital outflows, rising geopolitical tensions and the perception of increasing hostility abroad towards Chinese nationals are changing the calculus.

In 2022, the number of overseas Chinese graduates who repatriated rose 8.6 per cent from the year before, said the Human Resources and Social Security Information Network. While the number of Chinese studying abroad has risen, more also now choose to flock home. The ratio of returnees to those who enrol in overseas universities rose from 23 per cent at the turn of the century to 82 per cent in 2019 – when more than 580,000 overseas Chinese students repatriated.

Born during the heyday of US-China relations with globalisation firmly ascendant, China’s Generation Z is now coming of age in a very different, protectionist world. Manufacturers are shifting production away from China; the US and its allies are restricting China’s access to its cutting-edge semiconductors; Beijing is tightening the flow of information; and potential accusations of technology theft hound Chinese executives and academics alike in the US.

This decoupling of the world’s two biggest economies is upending the lives of China’s most ambitious students, who now face rejected visa applications abroad and growing youth unemployment at home. 

The country’s most privileged and cosmopolitan youth are shielded from much of the economic fallout and have far more options at hand, thanks to their wealth and family connections. Still, many are choosing to throw in their lot with Beijing for now – even though some hold green cards or have backup plans for immigration. The safety nets and economic resources available to them mean they are willing to stomach reverse culture shock, and deal with the persistent risk of sudden crackdowns on the affluent.

“Gen Zs understand the difficulty of being in China, but they feel like there’s more opportunity if they were to try to grow their business in Asia,” said Marshall Jen, principal adviser at family business advisory G Li & Co. Jen comes from wealth; his father owns one of the largest international school operators in China, and now mentors other second-generation clients. “They wouldn’t want to go to Europe or North America either.”

Opportunities abound for the well-connected in China. “There’s a huge talent deficit in many sectors, including semiconductors, pharmaceuticals and other high-skilled service sectors,” said Professor Jin Keyu, author of The New China Playbook. 

“What ‘sea turtles’ are able to offer that differentiates themselves from their domestically educated peers may be more hands-on experience, business acumen and a global outlook,” she said, using China’s metaphor for overseas-educated talent who return to the mainland.

Stay humble, stay quiet

The children of wealth form a tiny circle of one-percenters that also includes the likes of Alice Ho, youngest child of a gambling tycoon, and Marco Ren, son of a Chongqing-based real estate mogul. Labelled fuerdai, or second-generation rich, by the media, these scions attended the world’s top schools and move fluidly between Communist China and the intellectual cradle of the West, accruing the social capital that remains elusive to their parents.

Ho’s social media feed on Chinese microblogging site Weibo is a dizzying montage of Coachella raves, Art Basel parties and Blackpink concerts, sandwiched between her blazered image at the World Economic Forum in Tianjin and climate talks. Daughter of the late billionaire casino owner Stanley Ho, the jet-setter now lives in Beijing and is chief youth officer of the Global Alliance of Universities on Climate, following a stint in Tsinghua University’s Schwarzman Scholars programme. It is her first time living on the mainland after a childhood in Hong Kong, boarding school in the UK and higher education at the Massachusetts Institute of Technology, where she was a liaison officer for Harvard’s China Forum. 

Climate change “is a problem that will impact our generation, the Gen Zs – not only in developed countries, but also in developing countries”, said Ho, who led a youth delegation to Sharm El-Sheikh for COP27 in November last year. “I’m not interested in money,” she added. “There are many fuerdai, good ones and bad ones. I’d just love to help as many people as I can.” Bloomberg, the parent company of Bloomberg News, is a supporter of the Global Alliance of Universities on Climate.

In choosing life in China, many rich 20-somethings face minute scrutiny in a precarious world. Beijing is tightening its grip on wealth as inequalities widen and China’s much-vaunted social mobility loses steam. Images on social media of fuerdai burning money, buying Apple Watches for pets and crashing Ferraris have added to the simmering resentment, and Chinese netizens stand ready to flag any sign of bad behaviour or disloyalty, which could have serious repercussions for the families of well-to-do Gen Zs.

The mantra now is “stay humble, stay quiet”, said Jen, the family business adviser. And while money and privilege continue to open doors in a society that emphasises guanxi, or connections, it is now increasingly imperative to keep signs of privilege hidden or prove that it is being channelled for the greater good.

There are exceptions: Ren’s father, the real estate tycoon, circulated on Weibo in March, that he had spent 10 million yuan (S$1.9 million) buying a company that provided basketball training for his 24-year-old son, upon hearing that the previous owner had run into liquidity issues. “That was blown out of proportion,” Ren said. “Truth is, I don’t feel like a fuerdai.”

Still, most of the super-rich are wary of association with conspicuous consumption and cautious about political activism.

The 24-year-old Ho penned a short essay for the government-affiliated China Daily in June, urging other young people in Hong Kong to seize “the opportunities that China’s development offers”. She closed with: “I am full of confidence in the future of Hong Kong. With the ‘One Country, Two Systems’ principle, and the support of the patriots who govern Hong Kong, I believe that the city will continue to prosper while upholding its unique identity and culture.”

China’s gravitational pull

For all the scrutiny at home, many of China’s richest new grads are turning their backs on their lives abroad. Sometimes, they are responding to the lure of China’s potential. Other times, it is the alienation they feel overseas.

Ren changed his mind about staying in Australia after the pandemic. With few other Chinese faces in his department at Macquarie University in the suburbs of Sydney, he felt lonely and cut off from the bustling city life he was used to. When asked what he did during his time in Sydney, he replied: “Eat. Play video games.” 

When the university told all international students to leave in 2020, he spent more than a year taking online classes from his home in China, nursing the sense of being cheated of his education. When he graduated this year in January, he felt little attachment to Australia.

“I thought about working in one of the Australian banks, but they weren’t hiring international students,” he said. “Often, the expectation is to work in the West for a bit first, but honestly the lifestyle isn’t something I want. In the end, I went home.”

For Harvard grad Zhang, who now works at a tech company in Beijing, the promise of China’s future outweighs what can be a tricky transition for Western-educated youth. Adjusting to the Chinese workplace was challenging after her years abroad, she said.

“The first job was shocking,” she said. It was easy to miss subtle context and innuendos when her colleagues spoke in Mandarin, as she was used to a more direct style of communication. “I definitely had to get used to a lot of the underlying cultural norms and communication norms.”

Still, she has no doubt that her decision was the right one. Her job has helped her better understand the hurdles to building a sustainable food system, including last-mile delivery for farmers. Her connections in China also broadened her exposure. In March, she headed to the exclusive China Entrepreneurs Forum at the Yabuli ski resort with one of her employer’s top executives to promote the company’s products. Her father was also there.

“Despite all of the issues surrounding China’s rise, China is rising,” she concluded.

Separate orbits

By choosing China, Gen Z scions such as Zhang are tempering a pickup in the exodus of money from the world’s second-largest economy. Chinese tycoons who built some of the world’s biggest enterprises as the nation opened up to capitalism in the 70s are sitting on almost US$1.1 trillion of cumulative wealth that their heirs will likely control in the future.

The majority of these heirs are interested in entrepreneurship in China, or in investing via family offices in Singapore and Hong Kong, rather than in the West, said Jen. He is also the executive director of the Center for Family Business at the Chinese University of Hong Kong.

Their choices have graver consequences, however. The repatriation of these hyper-connected individuals deprives the US and its allies of intimate knowledge about the inner workings of the world’s second-largest economy. The deterioration in understanding runs both ways: polls show younger Chinese have a more negative image of America than their parents, with the telling exception of those who have studied in the US.

For China, the cumulative effect is to undermine the country’s goal to exert more influence globally at a time when its President Xi Jinping’s “no limits” partnership with Russian President Vladimir Putin, tensions in Taiwan and clampdowns on Hong Kong threaten to isolate the country further from the US and its allies.

On campuses across America, opportunities to build goodwill and mutual trust during late-night dorm-room discussions and dining-hall conversations are dwindling. Although the US remains the top pick for Chinese students seeking to study abroad, the number of students enrolled in the US was down 29 per cent in January 2023, compared to January 2020. About two-fifths of Chinese seeking graduate education abroad now favour a country that is friendlier towards China, said a May report from New Oriental Education and Technology Group.

Reduced cross-cultural exchange can pose “a tremendous national security risk”, said Dan Murphy, who has helped foster US-China academic exchange for nearly two decades and is now executive director at the Mossavar-Rahmani Center for Business and Government at the Harvard Kennedy School.

As graduates such as Zhang moved back to the mainland, a decoupling of sorts also occurred at Harvard’s China Forum. In 2021, the flagship conference was held in Beijing for the first time, on the top floors of the capital’s second-tallest skyscraper. Another off-shoot edition took place in Hangzhou last year, nestled amid pavilions and pagodas at the West Lake State Guest House, where Xi met former US president Barack Obama in 2016, and where former president Richard Nixon strolled during his landmark visit in 1972 – the setting evocative of a more hopeful era.

Under traditional grey eaves and in panoramic hotel ballrooms, against Harvard’s crimson backdrop, some of China’s most prominent CEOs and mainland alumni gathered – minus the usual turnout of American attendees due to Covid restrictions. It heralded the risk that the forum, after several decades of flourishing in Cambridge, was retreating into separate orbits. 

“It’s clear from the enthusiasm, passion and earnestness of our hundreds of attendees each year that public interest in thoughtful, critical US-China dialogues remains as high as ever,” the Harvard College China Forum said. “This assures us that the forum is and will remain a steadfast platform for these crucial conversations.”

Still, it is unfortunate for both countries that fewer Chinese students are now studying in the US, said The New China Playbook author Prof Jin, who herself is a China-born, Harvard-educated professor at the London School of Economics.

“It’s a glue between the two nations, and it represents exactly the kind of engagement the two nations should do their utmost to protect.” BLOOMBERG