U.S. Immigration Battle Heats Up

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Durbin and the bill's co-sponsor, Senator Charles Grassley (R-Iowa), have introduced legislation to limit the granting of H-1Bs, visas that are especially popular among U.S. tech companies like Microsoft (MSFT) as well as Indian IT services outsourcers like Infosys (INFY) and Wipro (WIT). The proposal has led to intense opposition in India. "It's a very drastic initiative," Wipro Chairman Azim Premji told BusinessWeek in May. "It will choke the United States of talent coming in."

Ironically, the latest immigration fight will take place at a time when the U.S. has become a less attractive destination for many immigrants. Because of the recession, there's less demand for low-cost labor. But the U.S. is also turning out to be less attractive for highly educated workers, too. James Chu, chairman and CEO of ViewSonic, the privately held maker of PC monitors, immigrated to the U.S. from Taiwan in 1986 and launched the company that became Walnut (Calif.)-based ViewSonic a few years later. However, he says, "if today I were young, I would probably choose China." For young entrepreneurs around the world, "if you want a good environment and a good education, the U.S. of course will still be the choice for a long period of time," says Chu, speaking while on a business trip in China. However, "if you want a place that's a challenge and exciting, China is probably the one."

American universities are feeling the impact of the declining appeal of the U.S. for potential immigrants. According to a new report by the Council of Graduate Schools, admission offers to prospective students from outside the U.S. fell 3% this year. Fueling the drop was a decline in interest from India and Korea, with Indian admissions falling 12% and Korean admissions down 9%.

One reason for the fall is the increasingly aggressive efforts by universities in Asia to recruit students who might have gone to the U.S. to study. "With the center of gravity in the global economy shifting to Asia, it's just natural for students from the U.S. and Europe to seek Asian experiences and networking opportunities through business schools in Asia," Suh Kil Soo, associate dean at Yonsei University Graduate School of Business, told BusinessWeek in May.

Einhorn is Asia regional editor in BusinessWeek's Hong Kong bureau.

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