When bustling emerging economies hit the buffers, the first to leave are usually the expatriates. The speed at which that can happen is impressive: Luxury sports cars were simply abandoned at Dubai airport in the exodus of 2008-2009.
For the more pessimistic observers, China is now also slowing dangerously. The economy expanded 7.7% last year, which although strong in global terms was the weakest pace since 1999 for the second year in a row.
Yet despite the economic difficulties China is still popular with expats. It’ll become even more attractive as salaries increase at a higher pace than among Asian peers and more foreign professionals come to see it as a place to jump up the career ladder.
Asia has become a magnet for top professionals from around the world in the aftermath of the global financial crisis. Hong Kong and Singapore have been inundated; Southeast Asia is once again attracting the more adventurous.
But the best potential rewards on offer seem to be firmly located in China. A new survey by Hays, a UK-based recruitment consultancy, indicated that 67% of employers on the mainland are likely to give pay rises above 6% this year. That compares to just 17% in Singapore and Hong Kong and 29% in Asia overall.
There are also going to be more jobs created. 71% of employers in China expect business activity to increase in the following 12 months and 43% see their permanent staff levels expanding. More firms are offering their staff benefits such as health insurance and car and housing allowances and 53% of employers intend to award a bonus to more than half of their staff.
If the allure of rising salaries wasn’t enough, for many expats the chance to work in China offers a fast-track for their career back home. Heads of a number of multinationals think that on-the-ground exposure in China offers faster career progression within the corporate structure for their staff, Alistair Cox, Hays chief executive, said in a media briefing in Shanghai in mid-January.
Not all jobs are equal though. Unsurprisingly, those fields that are vital to China’s future economic development hold the best promise, according to the survey.
The world’s factory is going to produce fewer toys and clothes and more complicated spreadsheets and algorithms. An ever-expanding service sector, particularly in top-tier cities, is creating demand for skilled accounting and financial personnel. Salaries at commercial banks are jumping by 10-15% as lenders race to open new branches.
Numbers alone won’t power the economy; oil and gas are needed too. Experienced specialists in geology and reservoirs are highly sought-after to help China extract the last drops from its ageing oilfields as well as to develop new unconventional sources. Anyone recruited to work on an offshore site should be warned however that they might find themselves in the middle of a hotbed of tensions in the South China Sea.
Still, for all the money and opportunity, China has plenty to cause pause for thought. Stumbling financial reforms and state control over big sectors, as well as cultural issues and concerns over pollution, can frustrate even the most eager of expats.
Investment professionals dream of making a killing in the fast-growing Chinese capital market. Shanghai aims to be a global financial hub by 2020. But regulators currently can’t even offer the basics to achieve that, such as a functioning IPO system. Jobs in oil and gas are at the mercy of unpredictable government energy policy.
The Hays survey noted that Chinese language skills are becoming necessary for all but the most senior of roles. Expats who don’t possess them are less attractive to employers than bilingual Chinese with international experience. Foreigners who have lived in China for many years privately express concerns that their lack of local language ability could eventually see them out of a job.
Ambitious professionals are unlikely to be put off by the above if it means getting ahead. Those who feel under-employed or under-paid in the West will also keep coming. “We’ve got a lot of inquiries from expats who want to relocate to Shanghai,” Simon Lance, the regional director for Hays in China, said at the briefing. “They are prepared to accept compromises on life, air quality and those sorts of things.”
As for the state of the Chinese economy – so vital for the job market – it’s hardly in dangerous territory yet, Li-Gang Liu, Chief Economist for Greater China at ANZ Bank, said at the launch of the Hays report in Shanghai. “GDP growth of even 6-7% is a very good, sustainable number.”