The United States has lured young minds from other countries for years, but now China is fighting back to reclaim lost human capital. The reverse brain drain may provide the necessary innovations for faster growth in China’s tech industries and exchange traded funds (ETFs).

The new life sciences school at Beijing’s Tsinghua University is luring China’s brightest minds back home with programs like the Thousand Talents Program, which offered top scientists grants of $146,000, generous salaries and abundant lab funding, writes Pete Engardio for BusinessWeek.

Dean Shi Yigong, a former Princeton professor who is also a pioneer in the study of cell death, has been recruited to build a world-class research center to “solve the basic mysteries of biology.”

The Chinese economic boom, coupled with a surge in government investment in research, is fueling China’s aspirations of becoming a technological powerhouse while U.S. laboratories are seeing funds dry up. China may soon be able to produce high-tech products from all the new theoretical research being down, says Shi. (Chinese may push to lift trade barriers on high-technologies).

While returnees are being lavished upon, existing faculty members in Chin have felt that they are being pushed aside and some have left for better-paying jobs in other countries. (China at a crossroads).

Carnegie Mellon University electrical engineering professor Jimmy Zhu was tempted by China’s offer, but ultimately declined because he doesn’t believe that “the scientific environment has matured enough to promote real innovation.”

For more information on China, visit our China category.

• iShares FTSE/Xinhua China 25 Index (NYSEArca: FXI): up 54.6% year-to-date

• SPDR S&P China (NYSEArca: GXC): up 64% year-to-date

• Claymore/AlphaShares China All-Cap ETF (NYSEArca: YAO): recently launched

Max Chen contributed to this article.

Tags: Asia, Asset Class ETFs, China, Emerging Markets, FXI, Global ETFs, GXC, YAO