As the world’s second largest economy with economic growth rates that have averaged 10% over the past few decades, China is predicted by some to become the world’s largest economy in less than a decade – meaning high quality talent will find no shortage of job opportunities in China’s recruitment market.
The Chinese Diaspora, Overseas Chinese and Chinese Returnees
It is estimated that there are over 40 million overseas Chinese with most of the Chinese Diaspora living in Southeast Asia. Moreover and from 1978 to 2003, a total number of 700,200 Chinese students and scholars from Mainland China studied abroad in more than 108 countries around the world with 172,800 returning to China to become so-called Haigui or sea turtles – the nickname for all Chinese students and scholars who return from studying overseas. All told, some 630,000 Western-trained Chinese students and scholars have returned home to become Haigui with one-fifth or 135,000 of that number returning in 2010 and then another 186,200 Chinese students returned by the end of 2011.
Today, China has become the number one source for students studying abroad. In fact and in 2011, China’s Ministry of Education estimated that 1.27 million Chinese were studying abroad – a 24% increase over 2009 estimates. It was also estimated that 90% of Chinese students studying abroad were choosing to study in the United States, Canada, Australia, Japan, the United Kingdom, South Korea, Singapore, France, Germany and Russia.
It’s worth noting that initially, Chinese students studied abroad thanks to government funded programmes that were designed to send them overseas to acquire specific knowledge and skills. Today, about 93% of Chinese students who study abroad are self-funded thanks to the country’s growing middle class. In addition and in 2010, China launched the Talent Development Plan (2010-20) to put in place favorable policies in areas such as tax, housing and children and spouse resettlement for high-caliber Chinese students who are willing to return to work in China.
On the other hand, its also worth noting that while a foreign education or international work experience in the past may have guaranteed Chinese professionals much higher salaries upon return, companies are now more careful to offer higher compensation packages to Chinese returnees who have the appropriate skills that merit higher pay than what would otherwise be offered to a local Chinese who has never lived, worked or studied abroad.
China’s Recruitment Market
Despite recent economic uncertainties about the Chinese economy and the sustainability of Chinese economic growth, high quality job candidates and professionals in China’s recruitment market across the board should never lack for job opportunities with candidates often expecting as much as 20% to 30% salary increases if they were to change jobs. However, money is not the only motivation in the Chinese recruitment market as many Chinese job candidates are increasingly putting value on work-life balance (especially female candidates who have or plan to have a child) and on the cultural fit with a perspective employer.
However, western expatriates in China seeking employment face tougher competition from overseas Chinese (e.g. from countries like Malaysia) who will also tend to speak more than one Chinese dialect. Moreover, the sheer numbers of young Westerners who have gone to China in order to learn Mandarin Chinese and to then seek employment there has pushed down their salaries as a whole. In fact and given the lack of good job opportunities in Europe and the United States right now, young Mandarin speaking Western professionals can be hired for just $2,000 a month or less in major Chinese cities.
Working in China
Foreign expatriates intending to work in China will need to obtain an Employment Visa (Z Visa) by submitting all of the necessary forms to a Chinese embassy or consulate abroad. A Chinese Employment Visa (Z Visa) will be valid for one entry and for three months. Once in China, the foreign expatriate will need to go through residential formalities with the local public security department within thirty days of entry. For further information about Chinese visas or China work permits, visit the Employment Visa (Z Visa) page on the website of the Embassy of the People’s Republic of China in the United States of America.
As for taxes, China’s income tax rates are progressive and range from 5% to 45% based upon monthly income with a personal fixed monthly deduction available to individual Chinese taxpayers. It should be noted that income taxes in China are paid by employers but China domiciles and non-domiciles who are full-year residents in the country with annual incomes exceeding RMB120,000 are now required to file an annual individual income tax return on a self-declaration basis. For further information about China’s tax rates or China’s taxes in general, visit taxrates.cc and KPMG’s Taxation of International Executives page for China.
Finally, it’s worth noting that base salaries in China are based upon 13 months with the 13th month pay being made around Chinese New Year in January or February. However, Chinese compensation packages may include bonuses equivalent to several months’ salary or more depending upon the profession and the industry sector.