mod (Andy) note: "Blast from the past - Best of Eddie" If there's an old post from Eddie you'd like to see up again shoot me a message.
Is the bloom off the Private Equity rose for today's MBA students? An interesting phenomenon is emerging among recent B-school grads that suggests Asia, and not Wall Street, is the premier destination for newly minted MBAs. Business Week explored the trend a couple months ago in this article.
As the recent high-profile Asian IPOs would indicate, there is definitely opportunity to be found there. And the place did have a sort of Wild West energy to it the last time I was there (full disclosure: I haven't spent an appreciable amount of time in Asia since the mid-90s, and haven't been back to Hong Kong since before the changeover). But if I were at the beginning of my career, I'd damn sure be giving Asia a hard look.
And right now, Asia is where the career velocity and opportunity are. "This has never really happened before, except in little spurts, where you have a fairly large group of talented, recent MBAs asking for assignments in China, Vietnam, India," says Jeff Joerres, CEO of global staffing firm Manpower. Adds Richard Florida, professor at the University of Toronto's Rotman School of Management: "I don't think many of us thought Asia would become the destination for top Western talent-but it is."
Rogue investing guru Jim Rogers has been extolling the virtues of China for many years now, going so far as to move his whole family there and teaching his young daughters to speak Chinese. He laid out a convincing case in A Bull in China and has another book on Chinese investing about to hit the shelves.
India is another interesting opportunity. A tech savvy population, a growing middle class, and a government that has taken a more laissez-faire attitude toward business over the past two decades has built an environment where brave American MBAs can prosper.
The only trouble with being a pioneer is that you sometimes end up with arrows in your back. I'd love to hear from monkeys working in Asia right now. Is it the promised land? How about the monkeys thinking about Asia? What's the major appeal? Are you going to bolt to the East when you get your MBA?
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Agreed. I think he gave a good overview of the Chinese market in Bull from an individual investor standpoint, but Investment Biker and Adventure Capitalist are still my favorites of his.
Not sure on the Asian student theory, but it makes sense.
Yes, there are tremendous opportunities in Asia right now, reminiscent of the US in the 30's and 40's. IPO's are sprouting up left and right, entrepreneurs can (and often do) go from nothing to a net worth of 8-9 digits in 3-4 years. BUT, some things I've noticed:
1) A lot of extremely wealthy and well-connected people are sending their children, and oftentimes immigrating to the West, which begs the question, Why?
-Answer: Besides the obvious (US has a vastly superior education system), the key here is that to get business done in China, bribery/corruption is a norm, and a MUST. Now, under normal circumstances, there's a mentality of you-rub-my-back-I-rub-yours. Everyone knows it's happening, but no one talks about it. HOWEVER, and herein lies the danger, with the CCP retaining complete power over political and economic affairs, if someone inside the party, for whatever reason develops a grudge against you, you'll not only lose everything, you may very likely be sent to prison (e.g. Rio Tinto execs, Gomez' founder- formerly richest man in China). And this systematic corruption trickles down to EVERY level of business/government (example: my uncle recently mis-spelled his company's name on some paperwork... someone that snowballed into him having to pay some official 300,000RMB to 'correct' the error if he wants to stay in business)
2). China has MANY MANY domestic problems that foreigners don't really get a sense of.
I came to China with the mentality that China is going to take over the world soon. However, soon after arrival I noticed something peculiar. Despite all the hype in Western media, the Chinese people have a pessimism about the future of their country. Why? Authoritarian CCP rule, mass rural migration into population centers, massive ethnic tensions, gigantic domestic wealth disparity (i.e. there is virtually NO middle class in China) and a population of 1.3 billion people. Yes, China's boom is real- and it may continue. The problem is no one knows if this growth is truly sustainable-- and most Chinese people seem to get a sense that sooner or later, somethinga la Tiananmen Square is going to happen.
3). It's a CLOSED party.
China, culturally and historically has been a relatively xenophobic country. The chinese people, while embracing Western commercialism, on many levels still see the world as "chinese" and "non-chinese". Can you get things done in China if you're not Chinese? Maybe. But the cards are HEAVILY stacked against you. Networking is the thing that matters. Nowhere is that more true than China. However, the difference is, in China, networking is a necessary SURVIVAL skill, and people are born into it. It's hard to describe in words... but it's incredibly hard to understand China and it's cultural/business environment if you are not Chinese. Most multinational corporations in Hong Kong/Beijing are hiring LOCAL TALENT educated in the west. If you take a look at the Bulge-Brackets in Hong Kong, Beijing, with no exaggeration, the MD's read like a who's-who's son/daughter/grandson/grandaughter in Chinese politics (e.g. Margaret Ren Merrill, Janice Hu CS, George Li UBS etc).
Anyway, as a chinese 叔叔 once told me, "来中国只能赚钱，不要落地生根“. Come to China and make money while you can, but do NOT make a home here.
Excellent post. Silber banana
Extremely accurate post. I have family doing business in China and this is close to a word for word account of their experiences there.
Can't be more true - silver banana from me too.
tyty.
Great post ibhopeful532. Its easy to get caught up in the EM hype, and while there is opportunity there, its not for everyone.
My dad is a project manager at an engineering firm. Recently, he assinged a project to a new chinese company operating in the area. Next day chinese rep comes in thanks my father for the opportunity and hands him a bag which he assumed ha green tea in it, it did. However, under the green tea and all there was $8000 in cash......
My father returned the money, they were probably trying to entice more favours.
ib we know your $1000 brooks brothers suit was ruined by a laundromat in China, but did you need to be so dramatic and pessimistic about the incestuous CCP & business corruption in China? you make it seem like there is no business but gangster drug dealing types of business
IB makes some valid points. Silver banana for you.
The working environment in China is entirely different from the US. It's similiar to the US' past in a old-bosses-bang-young-secretaries-and-people-think-it's-natural kind of way. But it is certainly not similiar to the US' present. There are lots of people working hard just to have the fruits of their labor taken by more powerful, connected people. FoxCONN, a gigantic outsourcing firm, just had their 9th suicide incident. The water is very very deep. Having spent a few years in the US for school and work, I sometimes feel that I have become too "soft" to return to China to do business. And this is after having worked in finance...
There was a great blog post by Paul Kedrosky about the Foxconn "suicide cluster" this weekend. It's basically overblown. Also, Foxconn/Hon Hai, while having their factory-city complex in Shenzhen...is actually Taiwanese.
http://paul.kedrosky.com/archives/2010/05/apple_and_foxco.html
so besides the obvious China and India choices (India is no place to live by the way) i am interested to hear people's take on some other lesser known but nonetheless appealing countries in Asia for work.
@Hansolo,
I would argue that Hong Kong and Singapore are definitely much more viable places for westerners to have a career. That said, I'm not sure about Singapore, but I know in Hong Kong, the vast amount of wealth and power is closely held by a handful of families... so the China "outsider" argument might still apply there.
yup honestly, its all about connections and whom you are related too.. not just china but India, Singapore and HK as well.. if you look at the top rank people in the BBs, most of them were either ex-finance minsters, worked in gov agencies etc etc..
anyways asians still love their american and european counterparts.. i'm not sure is it because they like to be served by us (prob makes them feel powerful??) or they genuinely like the western ideas and experiences..
but at the end of day, as long as you want to work in asia and make it big.. just ignore all these negativity
That's such an overstatement. The majority of the people who are taking jobs in Asia are either:
A. People born in Asia or of Asian descent who had always strongly considered, if not planned to, return to Asia
B. People who could not land the jobs that they want in the U.S., and thus resort to Asia.
I suspect that it is not a coincidence between the "mass exodus" to Asia and the recession / unemployment issues in the U.S.
hmm
i would imagine that most of these new MBAs going to Asia are the bobo Asians who came to get their MBA in the USA. i doubt many westerners are going over there, b/c you know, you probably need to speak asian to work in asia
I hope you are joking
a non-asian student at harvard, stanford, wharton, will stay in the U.S. if they get a reasonably good offer. unless we start seeing people turn down blackstone, kkr, citadel, PIMCO, to go work in asia, this whole thing is just a brief fad.
i largely agree
i also contend that non-asian MBAs likely cannot get a job in Asia anyways, unless they speak asian
was that directed at moi?
I think I might follow one of my friends and do my MBA in Asia. He went to Nanyang Business School and told me that they had international students from America and Italy. His MBA not only gave him first hand insight into Asian markets but on global markets as well. And for all you engineering students who want to go into business, the school is attached to technology university. Not bad for a school ranked 27th in the FT Global Rankings... http://www.businessbecause.com/nanyang-business-school.htm
Outside of China and Japan, does anybody know what kind of job opportunities are available in Asia (for a solely English speaking American)? I wouldn't have imagined many job opportunities, but in light of this post, I'm figuring there must be much more than I realized.
If you're really looking for EM countries in Asia, there's the Philippines to consider. From what I can tell, transitional phase in the economy, VERY large English speaking population, American influence is still quite strong there, Manila the capital city is large and bustling (lots of malls though) and big expat community. On the downside, the pay is less but the standard of living is higher and expectation to work as many hours is less. BBs don't tend to hire there though so it's more a question of looking for opportunities with boutiques or Asia-focused banks like CLSA and working on secondaries, rather than IPOs etc. Some SME-focused PE firms like Anthos are starting to invest there as well and there have been several interesting debt transactions. However, it is very much like China in that corruption is still extremely prevalent, it's a political game and the ruling class is the ruling class.
Taiwan and Korea come to mind. But if you can only speak English, HK will be your best bet unless you want to be an English tutor in other countries.
Here is a comparison India vs China:
India is the worlds most populated country and the wealth gap between the rich and poor is enormous (similar to China). A very large highly skilled and educated work force exists in India but over the longer term I am far more bullish on China then India. Here are the main reasons:
1) Very poor Infrastructure. In India there is tremendous bottlenecks in passing legislation. It takes years and also to build a road you need to evacuate people which can take years, A good example is the city of Bangalore, where in the last decade over 50 new shopping malls have been built but NOT one new road. In China they build the roads first - then the shopping malls. This problem will continue to bog the country down and is one of the key reasons why India has lagged so far behind China.
2) Corruption - while I admit corruption exists everywhere, In India it is far more prevalent than any modern society. Tough to start new businesses when you have to bribe over 500 people just to get a phone line installed!
3) Democratic country - India being the largest gives the workforce a say - they can go on strike when they want, in China this does not exist making Chinese workers far more reliable and dependable than their Indian counterparts.
4) Cash - this is king and China has plenty of it. India has around 20 billion in reserves compared with China's 3 trillion, we all know money talks and China can continue to spend their way out of any problems that may arise in the foreseeable future.
Of course there are advantages to India too, but it will lag China for many years to come.
http://finance.yahoo.com/news/Chinese-appliance-tycoon-apf-3125665500.h…
If you only speak English and want to work in Asia:
1) Singapore - English is the official business language. You can spend your entire life in Singapore and never have to speak another language.
2) Hong Kong - Not as familiar, but I imagine you can get by with English. However, I noticed plenty of job posts which request candidates speak Mandarin.
In my opinion, the predicted decline of the US economy is overblown, at least in our working lifetimes. If it comes down to money for you, working on Wall Street is still far and away better choice to maximize your earnings potential. If you have a solid connection to Asia and are looking for a lifestyle change, by all means move to Asia. However, I would just not expect your comp to be competitive to your Western counterparts. (for example, take a look at top MBA programs in Asia; average salary for graduates is anywhere between $65K - $77K USD. Obviously the numbers change if you land in a BB, but if you are not lucky enough to snag such a position, you run the risk of serious comp disappointment)
Phillipines is an interesting country to think about. Indonesia and Vietnam are worth taking a look at as well. Total population of Indonesia and Vietnam is about 330 million with Vietnam much farther down on the development curve. Language is an issue but level of local expertise in all fields is not high so foreigners are still highly sought after, particularly in Vietnam.
bump
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