Shanghai and Beijing remain the most popular expat destinations although Hong Kong is a big draw for financial services workers. Around half hail from the US and 20% from the UK.
And although that total sounds small in comparison with the estimated 4.7million British people thought to have relocated overseas permanently, or the one million Australians, it represents specialised jobs and highly qualified workers, underlining the importance of tailoring your CV if you’re going to land your first expat role in the country.
Once they arrive, most foreigners seem to like what they find; HSBC’s survey of over 7,000 global expatriates in 2013 ranked China as the best overall destination, ahead of Germany and Singapore, based on answers that covered employment packages and experiences bringing-up children abroad.
But foreign workers’ enthusiasm for China is not necessarily reciprocated by the local job market.
“For jobs that require a second language, employers prefer Chinese candidates who have had overseas experience,” said Su Ya, HR consultant for the management and consulting firm Hudson Global Inc.’s China operations. “Foreign hires are expensive and, more important, there are language and cultural barriers.”
Yet many passionate and skilled foreigners do manage to carve out a niche for themselves in China at all career stages. Lea Yu, a recent university graduate and California native who works as a real estate investment analyst in Beijing, said many young expats like her have kick-started careers by sacrificing income in favour of unique experiences and practical, on-the-job training.
"I've seen Chinese firms offer very low entry-level salaries, relative to those in the West," Yu said. "But I've also seen many young professionals take low wages as a trade-off for more responsibility or for the China experience, and then afterwards leverage that to attain fulfilling and high-compensating jobs later in their careers."
Specialties and executive heft
For the most part, for foreigners looking to get a foot in the door, it remains particularly difficult to secure a job with a 100% Chinese-owned firm. There are more job opportunities available with foreign companies operating in the country. Around 85% of expats work for these international firms, with the largest proportion in sales and marketing, followed by banking and financial services and engineering.
Around a third of firms in China say they expect to encounter a skills shortage this year according to a 2014 salary and employment forecast, produced by recruitment firm, Michael Page, and 6% of those firms expect this shortage will force them to recruit foreign talent.
“If you’re coming to China for an engineering job, you’re being hired for a technical specialism, and you can expect to make a salary at least on par with the US – if not more – plus an expatriate package,” said Matt Zedler, an engineer specialising in clean technologies for coal-powered boilers at US energy company LP Amina’s China operations.
HR professionals also said companies are hiring more managers from Asian countries, rather than the West. Janine Leung, a Guangzhou-based HR consultant in the media industry, said that her clients are looking for English-speaking candidates from Malaysia, Taiwan, Hong Kong and Singapore because they have the requisite skills, yet are cheaper than Western counterparts, who usually command salaries at least 50% higher than candidates from the region.
“Now most of the hires for middle-management positions are from Asia because they cost less, still have the client-facing skills with the westerners, and yet can often also speak Chinese to a certain level,” Leung said.
Zedler’s colleague at LP Amina, Constantin Crachilov, director of corporate strategy, underlined the route in is more difficult for the early- and mid-career levels. Business development and sales experiences accumulated in the West are not highly valued by China’s domestic firms, which tend to emphasize connections over business strategy.
“Chinese companies don’t see the benefit of experience in consulting companies such as McKinsey,” he said. “They don’t do market research, strategic analysis, and PowerPoint presentations; it’s too fluffy and theoretical. For Chinese enterprises, business is happening on the ground; it’s about cash and relationships.”
Crachilov believes business school graduates with China experience are better off looking for jobs in small and mid-sized Western firms with proven products that are planning to enter China in the next few years.
There are some exceptions. Experienced professionals with more specialized skill-sets and knowledge of advanced technology or industrial processes, such as some engineers and scientists in the gas and oil industry for example, find job opportunities in China more numerous and lucrative than those in their home country.
For the upper echelon of expat managers in multinational companies, however, the Middle Kingdom can be a financially rewarding post. Philip, a China executive for a Fortune 500 company, who did not want to be named because of his company’s media policy, said: “On top of a competitive salary, an executive can expect $10,000 to $20,000 per month [allocated] for housing, $30,000 per kid annually for children’s education, $4,000 per month in local living allowance and tax equalization to top it all off. It’s a pretty healthy package.”
Despite increasing competition from seasoned local talent, Philip believes in the future many top multinationals will continue to hire expat C-Suite executives because they feel more comfortable working with people from their home country.
“Jobs like mine in China exist because investors abroad are concerned about working in an environment with communication and cultural differences,” he said. “My role is to mitigate those fears and make people feel good about their investments.”
This preference means just over half of CEOs at large-scale listed Chinese firms continue to be foreign hires, compared to 27% in Europe and North America, according to recruiter, Career International’s salary guide for 2013-2014.
The niche for expats in China is clearly narrowing as the local talent pool absorbs language skills and adopts the foreign education systems and qualifications once unique to outsiders. About 235,000 Chinese students studied in the US in the 2012-2013 school year, according to the US Department of State. And rising wages in China have meant more of these students are now choosing to return home.
In a bid to address the gap a growing number of top universities in the US and Europe are running exchange programmes that allow their students to spend as long as two years studying and working in China, to really get a grip on local languages and get a foot in the door in the jobs market.
While both Chinese and foreign companies operating in China will continue to value foreign technical expertise and seasoned executive talent in coming years, there’s no doubt the need for English-speaking generalists is quickly receding. The job market will demand the current generation have better language skills and more extensive experience in the country than expats of the past. As Crachilov pointed out, this means paying one’s dues in the early career phase.
“The important thing for Westerners wanting to work here is to come early in their careers and learn the culture and language -- preferably in their early twenties, when the opportunity costs are low.”