This paper highlights how returnees and knowledge diaspora are important sources for China’s human resources development, identifying push and pull factors that also contribute significantly to innovation in the higher education sector. By outlining China’s key projects and schemes for recruiting international professional workers, the paper argues that bringing advanced knowledge and skills back to a country of origin through international education and experiences is neither new, nor limited to China. At the same time, the rise of a large, worldwide Chinese knowledge diaspora is now of global importance in promoting transnational scientific and business networks that underpin both research and development, and the quest for world-class universities. China’s size and weight, its determination to boost development and improve its higher education system, as well as the willingness of both diaspora and returnees to contribute, constitute its advantages. However, there remain limitations to its success, notably a lack of high-quality research, reservations regarding new ideas, low awareness of international collaborations, too much attention given to material rewards and quick results, corruption, and too many administrative controls and government regulations.