China is setting up its first immigration office, according to people with knowledge of the plans, as President Xi Jinping seeks overseas talent to help drive the transition of an economy led by consumer spending and innovation.

Public Security Minister Guo Shengkun, who doubles as a state councilor, disclosed the move earlier this year at an internal meeting about a wider overhaul of domestic security services, said the people, who asked not be identified because the plans are not public. The office would be created by merging and expanding the ministry's border control and exit-entry administration bureaus and could be set up before year-end, they said.

It is the latest sign that China sees the recruitment of foreign workers as a way to help shake its dependency on manufacturing and investment and avoid the "middle-income trap" that has stalled developing economies from Asia to South America. Almost four decades after Deng Xiaoping began opening China to the world, about 600,000 foreigners live in the Communist-led country, a tiny fraction of its almost 1.4 billion population. Japan, by comparison, has 2.17 million foreigners.