Well real question is how much would that limit PRC talent from working abroad. PRC will be producing plurality of STEM / high skilled talent for decades. They're going to be the only country with project intergrated circuit talent glut in next 10 years, every other semi power projected to have 100,000s shortage. No PRC talent, and you cap western semi talent pool.

Ultimately a lot western innovation run on brain drained PRC talent. There is bamboo ceiling in western tech for east asians, specifically to restrict reverse knowledge transfer. Side effect is once PRC talent hits this ceiling they know big title and fat paychecks and upward mobility is back home, where frankly QoL is off the charts. Ultimately PRC wealthy enough to reverse brain drain aka brain recirculation and PRC talent aren't retarded enough to limit their career aspirations because west decides to cap their career trajectory and try to lock their future behind noncompetes, especially in cold war vs their birth country. Worse, PRC wealthy enough even if there's no bamboo ceiling they can afford to reverse brain drain top 1%, hence current equilibirum. West needs PRC talent, west cannot afford PRC talent to climb too high, PRC can afford to take them off west's hands.

Until west figures out another source of talent, they're stuck in this talent trap. And IMO India ain't it, they don't have the integrated industrial chains and academic structure to produce same kind industrial ready workers yet.

Your point is right on. And additionally, why would an average Indian refuse the pay package to work in China? The top r&d guy at SMIC is from Taiwan after all. Liang got both Samsung and SMIC into the advanced nodes.