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China Business Weekly

China's rising demand for expats

China (and in particular Shanghai and Beijing) is the most popular Asian destination for expats, and despite a slowing economy it is likely to remain so.

The promise of better salaries and promotion opportunities so far outweighs the negative factor of rising air pollution, although some companiesare finding they have to offer higher salaries to compensate.

In Shanghai, which is aiming to become a global financial hub by 2020, salary growth among professionals is expected to be higher this year than in Singapore and Hong Kong, and the absolute gap in remuneration between Shanghai and its competitor cities is narrowing rapidly.

According to British recruitment agency Hays, almost two-thirds of mainland employers increased salaries by at least 6 percent last year, compared with just 17 percent in Hong Kong and 29 percent in Asia overall. And the same percentages apply to employers who intend to increase salaries in 2014.

Although executive pay in Hong Kong is generally higher than in Shanghai, the gap is narrowing quickly, and in some areas Shanghai has moved ahead. And while Hong Kong has the advantage of lower personal income tax rates, Shanghai is seen to offer greater opportunities for career advancement.

There is still a perceived skills shortage on the mainland, which is feeding the demand and rising salaries on the mainland.The most in-demand areas are understandably those seen as vital to China's future economic development.

These include the services sector in which demand for skilled accounting and financial personnel is outpacing supply. Salaries at commercial banks are rising by 10-15% as lenders compete to open new markets.

But the demand for expats extends well beyond the financial sector. Experienced specialists in geology and exploration, for example, are highly sought-after to help China extract the last drops from its ageing oilfields as well as to develop new unconventional sources.

More international firms are offering their employees benefits such as health insurance and car and housing allowances, and more than half of all employers include bonuses in their packages.

But it's not all upside for expats. As well as the downside of rising pollution in major Chinese cities, Hays notes the increasing importance of Chinese language skills alongside increasing competition from bilingual Chinese with international experience, meaning that all but the most senior expat executives will find it harder to get ahead in the future. Demand for places in good international schools for the children of expats is high. Another downside is that many jobs in the oil and gas industries are dependent to varying degrees on the government's energy policy, which can be unpredictable and subject to significant change.

Still, as a Thai expat living in Shanghai, I can vouch for the attractions of this vibrant city, with its alluring mix of ancient culture and the best the 21st century has to offer. Clean air would be a great bonus, but perhaps that would only make the city too attractive, and too crowded with expats!

Another aspect of expat life in China is the relative lack of Thais, compared with expats from our Asian counterparts such as Hong Kong, Singapore, Taiwan and Malaysia. Indeed, many Thais seem to lack the adventurous gene that encourages people to become expats. Maybe we're too contented with the great lifestyle we can enjoy in Thailand, but whatever the reasons, I would encourage more Thais to live and work overseas. Apart from the benefits of higher salary and career progression, being an expat gives you an invaluable opportunity to explore the outside world, and - in most cases - the ability to bring home the value of that experience for the overall benefit of Thailand.

For more columns in this series please see www.bangkokbank.com






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