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With sharp decline of birth rate and fast aging population, China is entering a severe demographic crisis and facing an emerging labor shortage. In addition, the growing geopolitical tension and economic decoupling between China and the Western countries have injected more urgency for the Chinese government to attract foreign talent and investors. China needs immigrants, both blue-collar workers and high-skilled professionals. Since 2013, the Chinese government has continuously enacted new laws and issued regulations to attract foreign talent, facilitate the return of skilled Chinese nationals, and better regulate the entry, residence and employment of foreigners. But the results of immigration reform under Xi Jinping’s government, China’s most authoritarian government in the past 5 decades, are mixed, with improving exit-entry services provided for foreigners and little progress in establishing a fully functioning permanent residence scheme. China’s immigration reform is being hampered by (1) public backlash against immigration which has been facilitated by Beijing’s own nationalist propaganda; (2) fragmentation of government authority within its party-led state apparatus; and (3) a variety of restrictions caused by Beijing’s deep strain of security concerns. Through policy analysis and case study, this paper attempts to illuminate an empirical puzzle of China’s slow-moving immigration reform under Xi’s authoritarian government, explain the political challenges that underpin its mixed results, and offer generalizable theoretical expectations for similar contexts.