Easier Permanent Residency for Highly Skilled Foreign Professionals—Is Japan Ready?

Faced with a rapidly graying population, Japan has charted a new course toward opening its doors wider to foreign immigrants, and is hurriedly tearing down hurdles in the way of foreign citizens seeking residence visas. Within the year, a new system that the administration of Abe Shinzō has dubbed a “green card for highly skilled professionals” is to be rolled out. This will allow foreign researchers, corporate managers, and other workers with specialized talents to apply for permanent residence after as little as a single year living in Japan.

The policy rationale for this sudden course change lies in the pages of the government’s 2016 Japan Revitalization Strategy, announced in June of last year. This strategy—bearing the ambitious subtitle “Toward a Fourth Industrial Revolution”—calls for “strengthening creation of innovation” and identifies attracting highly skilled foreign professionals to work in Japan as an integral component in that process. Achieving this goal will require creating a system that lets foreign talent stay in Japan for an extended time, and the same strategy document advocates an improved immigration and residence management system to eliminate many of the restrictions in the cumbersome system in place today. Instead of the old, conservative approach, the strategy calls for proactively encouraging high-caliber foreign professionals to settle permanently in Japan.

Fast-Tracking Permanent Residency

In fairness, the trend is not entirely new. The government has been taking small steps to open Japan’s doors wider to foreign professionals for the past several years. In 2012 the Japanese Immigration Bureau introduced what it calls the “points-based system for highly skilled foreign professionals.” Under this system, explains an official at the Tokyo Regional Immigration Bureau’s Foreign Residents Information Center, applicants are assigned points based on their educational background, professional experience, annual income, and other factors, and applicants with 70 points or more become eligible to apply for the highly skilled foreign professional status.

These professionals are further divided into three categories: advanced academic research, advanced specialized/technical, and advanced business management. Roughly speaking, the first category corresponds to university professors and other researchers, the second to IT and other engineers, and the last to business managers and company directors.

To take a concrete example, under the new system, if a Japanese company wants to add a foreign white-collar worker to its team to handle trade, management, or translation tasks, it would first help the candidate secure a visa and obtain a status of residence in the pre-existing category of “engineer/specialist in humanities/international services,” which allows the person to stay in Japan for a fixed period. If hiring a manager or the head of the organization, the category would be “business manager.” The employee would enter Japan with that initial status of residence, but after staying long enough would be able to apply to switch over to the new “highly skilled professional” category, which allows recipients to apply for permanent residency in Japan after a significantly shorter stay than under the old system. This route is now the shortest distance to permanent residence in Japan, and needless to say, it is this advantage that makes it so attractive to foreigners interested in living here for the long term.

Yet even in this new system, the employees still need to reside in Japan for five years before applying for permanent residence—considerably shorter than the 10 years required for most traditional visa categories, but by no means a “fast track.” The new, relaxed conditions now being considered, however, will slash that wait to as short as a single year, just so long as the applicant has a score of 80 or more according to a point-based evaluation system run by the Immigration Bureau. This drastic acceleration is clearly in response to the Japan Revitalization Strategy’s call for what it dubs a “Japanese green card for highly skilled foreign professionals” in order to attract “the world’s top level human resources.”

The Japanese government insists that its ultimate goal both in luring more highly skilled professionals to Japan and relaxing their residency requirements is to revitalize Japan’s economy. In reality, however, it seems clear that there is a second agenda at work as well, a desire to supplement Japan’s declining population with increased immigration. In fact, some experts argue that there is actually no urgent business demand for such foreign talent at all. “It’s hard to believe Japanese companies are hurting today because of a shortage of highly skilled foreign professionals,” says the economist Takeshima Shingo. “It might be true in IT and a few specialized industries. But I see no sign that manufacturers and other industries are under that kind of pressure.”

Turning Chinese

According to the Immigration Bureau’s Statistics on Foreign Residents in Japan, the total number of such residents as of June 2016 numbered some 2.3 million. By region of origin, Asia was the distant frontrunner at 1.9 million, accounting for more than 80% of the total (Figure 1). Breaking the Asian immigration figure down further, immigrants of Chinese nationality numbered 677,571, or 35%, meaning that of Japan’s total 2.3 million foreign residents, approximately 30% were Chinese (Figure 2).

The ranks of highly skilled foreign professionals were far, far fewer, at a scant 4,732. Yet even in this category more than 80% were from Asian countries, with Chinese nationals accounting for 65% of the total (Figure 3).

It is in this context that another merit to receiving the “highly skilled professional” classification—an advantage quite separate from the much-publicized “shortcut” to a green card—stands out. In addition to expediting their applications for permanent residency, foreign residents in this category also have the unique right to bring their parents to live with them in Japan. So long as the foreign professionals and their spouses have children younger than seven years of age, their parents can accompany them to provide childcare while they work.

This clause makes the new category even more attractive to interested Chinese applicants. “In China it’s customary to have your parents take care of your children while you work, something that’s not as common in the West,” observes the Foreign Residents Information Center official. “We’re seeing more and more Chinese candidates applying for the highly skilled professional category because of it.”

Indeed, China has been experiencing an emigration boom for years now, and the new system as it is designed could very well tap into that trend. As one Shanghai-born resident of Japan explains: “Tokyo is very convenient, just a two-and-a-half hour flight from Shanghai. The air is clean and it’s a great place to raise children. I have lots of friends in my own circle who are interested in applying for Japanese residence.”

The Chinese Exchange Student Wave

If Japan is hunting for foreign talent to help revitalize its economy, then the foreign exchange students now studying at the country’s universities should clearly be considered the reserve corps for tomorrow’s highly skilled foreign professionals. Indeed, the 2016 Japan Revitalization Strategy calls directly for boosting the postgraduation job placement rate for foreign exchange students at Japanese companies from today’s low 30% to a level of 50% in the future.

Yet even here national disparities are evident, with Chinese students as disproportionately represented at Japan’s universities as they are in visa application rates. Of the 208,379 foreign exchange students studying in Japan as of July 1, 2015, 94,111, or roughly 45%, were from China. Even after graduation, Chinese exchange students are being hired by Japanese firms at a far higher rate than exchange students from other countries. That, says Ōsawa Ai—president of Vein Global, a company that supports the job-hunting activities of foreign exchange students attending Japanese universities—is because “the human resources who are most fluent in Japanese tend to be the Chinese and others students from the kanji cultural sphere.” Beginning from a baseline of fluency in another language sharing the Chinese characters used in Japanese is key, explains Ōsawa: “Job application forms and written hiring tests at Japanese companies are all produced in Japanese and are full of kanji. The end result is that it’s much easier for kanji-culture students to get hired by a Japanese firm.”

Conversely, it is hard to get elite students from Europe and the United States to even consider attending Japanese universities in the first place, for the simple reason that those all-important jobs that might be waiting for them after graduation are simply not that attractive. The names of many Japanese companies may be known the world over, but in the eyes of these potential job seekers, there are few that would be considered attractive employment destinations. More than a few international education experts question whether students from prestigious international universities like Harvard would even want to work for a big Japanese corporation today.

The Australian and Canadian Experience

China is a land of 1.3 billion people, and in recent years—be it over concern over crippling air pollution or fears for their nation’s economic future—the number of Chinese seeking to emigrate has soared. The most popular destinations to date have been Australia and Canada.

Australia, with a total population of only 23 million, already had 447,370 immigrants from the Chinese mainland as of 2014, and the number has only continued to grow. Meanwhile, the nation’s economy is becoming increasingly dependent on Chinese-generated investment. Of the $194.6 billion in proposed investments recommended for approval by Australia’s Foreign Investment Review Board in 2014–15, China was the single largest source at $46.5 billion. By sector, real estate investments alone totaled $24.3 billion, double the amount from the same period just a year before. Kuhara Wakako, who recently returned to Japan after 24 years living in Australia, says the impact has been tremendous. “In recent years so many of the apartment buildings and condominiums have come to be owned by Chinese,” she says, “and there are more and more residential districts where almost all the residents come from China.”

It is the same story across the Pacific in Canada. Yamamoto Tomizō, who moved to British Columbia’s Vancouver in the 1960s and ran an architectural firm there until retiring, has seen similar changes on the ground.

“Vancouver right up there with Toronto among Canadian cities with lots of Chinese immigrants,” Yamamoto explains. “There are even entire shopping centers in the area targeting Chinese consumers. In Richmond, just outside of Vancouver, the city government has hired an inspector to urge Chinese storeowners to add English to signs written only in Chinese. And there have been news reports that English-speaking residents in a Richmond condominium complex were complaining because their condominium committee meetings were being held exclusively in Mandarin.”

In Vancouver proper, aggressive housing purchases by Chinese immigrants and investors have triggered a price bubble that is driving out local home hunters. The British Columbia provincial government has gone on the counterattack, instituting a special 15% tax on housing purchases by foreigners. In 2014 the Canadian national government also wound down an immigrant investor program that had been particularly popular with affluent Chinese. Yet Canada nonetheless continues to actively court highly skilled professionals from China, and immigration into the country from China, India, the Philippines, and Iran in that order continues to grow. In big cities like Vancouver and Toronto, where new immigrants tend to congregate, some older residents now fret openly that Caucasians could be a minority within 30 years.

Ready or Not?

Even as the Japanese government loosens its residency requirements for highly skilled foreign professionals, it also continues to provide residency status to applicants for what it officially calls “technical intern trainees,” many from developing countries, for onsite “technical training” in sectors like agriculture, fisheries, and construction. Needless to say, these are sectors that are already experiencing or expect to experience labor shortages, and the number of “trainees” is soaring. Prime Minister Abe has repeatedly declared in the Diet that he has no intention of expanding immigration into Japan. Yet in practice there is already an urgent need to design and implement a system for accepting the increasing number of new arrivals who are “immigrants” in all but name only.

As the number of permanent foreign residents in Japan grows, their families will be sure to follow. How much access should these new arrivals have to Japan’s pension system and the other components of Japan’s social safety net? What should be done about educating the increasing numbers of children who are not native speakers of Japanese? The problems presented by the new arrivals are endless, and will only become more serious as the years go by. At the same time, it will also be essential to revise Japan’s own laws and systems, perhaps even including investment controls and other measures like those adopted in other countries, from the perspective of protecting the livelihoods of the Japanese people themselves.

It would be rash to keep edging open Japan’s doors to immigration in the name of “economic revitalization” before a careful and coherent strategy is put in place. Building a “diverse nation” may be a noble ideal. Yet the challenges that must be overcome to make that ideal a reality are legion. What kind of nation building must Japan pursue? No matter what the final answer, the resolution of the Japanese people is sure to be tested.