Why Expats in China are an endangered species
(You can find the full article on Linked In here.)
In the recent years, China has grown as an economic power and I am frequently contacted by foreigners either young or old trying to land a job here.
There are good reasons for it. Life in cities like Shanghai has significantly improved. The food scene, the culture, the nightlife and the energy are much similar if not better than what you would find in most vibrant cities of the west, with the added bonus of the exotic Chinese touch on top.
Here is an overview of the foreign population currently trying to surf the Chinese economic wave. (more info can be found here)
Until recent years, China enjoyed a great image of economic growth and opportunities for all.
What no one tells you is that these great opportunities are now for locals much more than they are for foreigners.
Most foreign companies are now well established and their years of tax free benefits and favorable labor costs are now over. Margins have reduced, Western economies have slowed (China’s clients), and we have seen a dramatic shift toward relieving the payroll of all those expensive expats.
On the other side, local talents have learned and grown, trained under countless foreign companies and JVs. The education level is catching up, and the knowledge base is transferring. They are ready to take over.
Expat packages always come to an end
Unless you are at a director level or higher, chances are your nice expat package from home will come to an end after a few years. After your good years of service and the growing attachment to your lifestyle in China, you may be “rewarded” with a step down to a local package. Even if on the paper the salary is sometimes matched, numerous advantages will disappear or seriously diminish: housing/travel allowances, education benefits, retirement plans and health insurance are all often lost in these transitions.
For most people losing these benefits results in an immediate transfer back home.
As a matter of fact, more expats are leaving China than arriving.
Safe trip back home, sir!
Despite these challenges, who is still getting a nice expat or even arranged local package?
People with either a great technical expertise or consequent managing experience in China. These openings are infrequently found. Often if you are headhunted for a position, or if you have a strong relationship with a potential employer in China, the opportunity is rarely at the right place at the right time.
Our current view of these opportunities shows that the package for a 10-15 year veteran with expert credentials ranges from RMB 700k to RMB 1.3M adding both Salary and benefits together. Packages that are significantly more lucrative are increasingly rare.
Salaries for young and audacious professionals have been drastically reduced.
For the young expat eager to launch their career in China, there are still plenty of openings. As noted before, this economic opportunity invites a lot of interest from these junior professionals resulting in a decrease in salaries.
Internship ranges from 0 to RMB 5K, first jobs from RMB 5K to 12K. A best case scenario for someone with 2-5 years’ experience is typically around 20K RMB.
If you look at the increasing cost of life of a matching ‘foreign’ life style in cities like Shanghai or Beijing, you quickly realize that this is no heaven on earth.
It is an unpaid internship, we will probably not offer a job afterwards and we will not help you get a visa. Welcome on board!
A few tips:
Even though the picture seems bleak, there are still many opportunities for foreign talent in China.
- Central China has developed in the recent ‘conquest of the West’, offering much less glamorous cities to live in but a lot of opportunities for expats of all experience levels at a more affordable cost of living.
- To balance the above statement, do a favor to your health and the entire family you might bring with you and consider the environmental factors of your future home. A pollution driven first class ticket to an early grave is not worth it. Avoid Beijing or Hebei province in general.
- Understand that China is a great place to grow a thick skin but don’t get attached to it. Seize any good job opportunity that will light up your CV and skills and then move on to where this experience can be appreciated on the long run.
- Career opportunities highly depend on your network and you will leave it behind for as long as you are an expatriate. Your return home will become more and more difficult. Unless you are working for large multinationals with the opportunity to transfer back home, make sure you grow your network to ensure you have a place to return to.
- Over the last years, Chinese authorities have made it much easier for foreigners to invest and launch businesses. If entrepreneurship is in your blood then China is a now a rather good place for it. (more articles about this topic to come)
- Teaching jobs continue to entice many foreigners through their offers of reasonable pay. Unless of course your career path is teaching, consider it as a temporary option while you actively job-hunt on the side. The relatively higher pay and benefits is a trap that will delay your entire career growth.
At last, I want to demystify a false legend that many will debate:
Speaking Chinese will not improve your odds of success as much as you would hope
If the job is Chinese speaking then in about 95% of cases, it means a Chinese person can do it and the job will pay according to local market price. In our experience if a Chinese person is speaking with you as the face of a foreign brand they expect the full foreign experience.
My advice is to instead focus on hands-on experience working in China, developing your network, and enhancing your can do attitude. These will likely do more for you than the Chinese classes you may end up quitting anyways.
Don’t get me wrong, learning a new language is absolutely great. My point is that you should learn for your own personal development and interest for the Chinese culture instead of believing that the language will create new business opportunities.
Always try to look smart even if you don't get a single word!
I want to add one last bit of insight to this report, which is simply that I myself have enjoyed great success with being an expat and have known many expats who have had similar success. However having realistic expectations and proper planning can add tremendously to your satisfaction, even before you arrive.
Every case is unique! Do not hesitate to share your experience or questions