Don't move to China, Don't study Mandarin
Looking to Get Ahead? China Doesn't Want You!
Joe Phillips seemed like an ideal candidate to make it in China. Half-Chinese, with a bachelor’s degree in East Asian studies, business experience, $20,000 in savings, and an affable disposition, he set off for Beijing with a friend from Seattle in the fall of 2010 to start a company that would bring microbrews from the Pacific Northwest to the largest beer market in the world. “The land of milk and honey was calling,” he says.
A year later, the milk had curdled. The cost of getting a foreign-owned business approved in China turned out to be much higher than he’d expected. He ran into bureaucracy at every step, from obscure customs forms to opaque transport regulations. And after expressing initial enthusiasm, bar and restaurant owners stopped returning his calls. “It fizzled out,” says Phillips, who returned to the U.S. broke. “Any entrepreneur that thinks they’re just going to go to China and start a small business—that’s crazy.”
As its economy grew over the last couple of decades, China developed a reputation as a place where foreigners could launch a business or career, perhaps even faster than at home. A few have. As 24-year-old American expat Jonathan Levine wrote in an optimistic New York Times Op-Ed earlier this year, “China wants you. Job prospects are abundant.” Stuck doing public relations in Connecticut after graduation, Levine blasted out his résumé to schools around the world and landed a plum gig teaching American culture and English at Tsinghua University in Beijing, known as China’s MIT. Such stories confirm the narrative many Americans are telling themselves despite reports of a Chinese slowdown: Our ship is leaking while China’s is steaming ahead. And so parents enroll their kindergartners in Mandarin, study-abroad programs flourish, and nimble young graduates like Levine seek their fortune in China.
As in any gold rush, few strike gold. “There’s this perception that China is a land of opportunity where any foreigner can succeed, which is not really true,” says Michael Thorneman, partner and head of China operations for Bain & Co., which advises numerous multinationals on hiring decisions. “They don’t necessarily want us here,” says Mathew Alderson, a Beijing-based lawyer for international law firm Harris & Moure. “America is a nation built on migrants, but China can’t say the same.”
If you’re a recent graduate but don’t want to teach English, well-paying jobs that’ll advance you professionally don’t abound. And in lucrative sectors such as banking, private equity, and management consulting, it’s becoming harder for an American to find good work.
For the lucky few who do, the bureaucratic roadblocks can be comical: The Chinese government has recently imposed a 50 percent “social benefits tax” on all foreigners, though it hasn’t clarified how the tax should be paid. One foreigner went to the Beijing tax office to pay, only to be met with bemusement from the officers on duty. (He refused to be named for fear of offending the government and having it negatively affect his business.) Getting the proper Visa can be a tortuous process, and Beijing police have recently launched a crackdown on foreigners working illegally, requiring expats to carry passports, visas, and resident permits at all times or risk deportation.
Given the choice between a Westerner with decent Mandarin and an educated, English-speaking local applicant, companies will favor the Chinese. “We almost only recruit PRC nationals or Chinese speakers,” says Thorneman. Those candidates—bright Harvard- and Wharton-educated returnees—are multiplying. In 1995 fewer than 24,000 Chinese students went abroad for education, according to EIC Group China, a provider of educational services. By 2010 that number had risen to 285,000. Not only are Chinese-born prospects more abundant and better suited to the environment, they’re also cheaper. Hiring a foreigner from a developed country to work in China costs 50 percent to 200 percent more than a local hire, according to a 2011 study by human resources consulting firm Aon Hewitt (AON).
Multinationals still need foreigners, Thorneman says, but the available jobs are mostly mid- to senior-level. Even the top ones are becoming more local, with only 6 percent of multinational executive positions in Asia going to candidates from outside Asia, according to the Wall Street Journal. As for Chinese companies, plenty seek English speakers to interact with clients overseas or Caucasian faces to parade before investors. But foreigners in Chinese organizations might encounter resistance. When working at a top Chinese private equity firm, where he helped raise almost $2 billion in capital, Mattan Lurie had a prospective investment target ask to be introduced to his Chinese colleagues. “My reaction was, why do you need to deal with someone who’s the same race as you?” says Lurie. “But that’s the way it is.”
Continue China’s famously
Continue
China’s famously ceremonial business culture presents another set of challenges, from knowing where to sit at a banquet to maintaining control after the 18th glass of baijiu, a liquor distilled from sorghum that goes down like lighter fluid and is a key ritual in many deals. In Mr. China: A Memoir, Tim Clissold describes touring China with investor Jack Perkowski. After days of stress, greasy banquet food, and stabbing hangovers, Clissold eventually suffered a heart attack. Dinner often gives way to karaoke. Alistair Nicholas, president of AC Capital Strategic Consulting and author of Off the Record, a blog about doing business in China, argues that foreigners shouldn’t feel obligated to get tanked and belt out Bon Jovi: “[I]t is precisely when you ignore your own culture and principles that you risk losing face or risk your Chinese partners thinking you are so weak you can easily be taken advantage of.”
Succeeding in China often means getting ripped off. Rovio Entertainment, the creator of Angry Birds, ended up negotiating with the makers of pirated plush toys, giving them in-game ad space in exchange for licensing fees. Pilfering isn’t limited to the tech sector, either. Last year, Kro’s Nest, a Beijing pizzeria known for its American-style pies, rolled out a 28-inch pizza called the Monster. “In the last couple months,” says Martin Handley, the chain’s vice president of operations, “I have seen six or eight other places offering the 28-inch pizza.”
The key for any newcomer is to offer a unique skill. For Perkowski, the Pittsburgh-born investor who famously left Wall Street for China in the 1990s, that skill was raising ungodly amounts of cash, to the tune of $400 million. “I was able to do what I did because capital was short,” he says. Nowadays, with capital flowing into China from American and Chinese investors alike, a newcomer’s edge will more likely be technical, like knowing how to engineer a semiconductor or design a building.
Mandarin can count as a skill, but the bar is high. After studying the language for four years in college, a bright American will still talk like a precocious eight-year-old, whereas Chinese students start learning English as eight-year-olds. There are 5,000 times as many Chinese primary and secondary school students studying English as American students learning Mandarin, according to the American Council on the Teaching of Foreign Languages. One possible reason: The time it takes to achieve Mandarin fluency could be spent learning a profession—law, say, or molecular robotics—that would serve as a better pretext for living in China than knowing the language.
Even if you have a marketable skill and speak perfect Mandarin, nothing is guaranteed. Lurie first moved to China in 2003 to study Mandarin, returned in 2005 after getting his MBA at the University of California at Los Angeles, and signed up with a top China private equity firm. In 2008 he was asked to leave and was replaced with a native Chinese. It was a matter of supply and demand, he says: “There was a time people had to be convinced to invest in China. Now people are lining up to give them money. So my value decreased.”
What advice would Lurie give recent college grads considering a move to China for work? “Don’t,” he says. “Don’t, don’t, don’t, don’t.”
The article basically contradict this 1/2 positive/upbeat post about immigrating to China and learning Mandarin
http://www.wallstreetoasis.com/blog/will-studying-...
Power and Money do not change men; they only unmask them
Mandarin is way too hard to
Mandarin is way too hard to learn. I'll stick to English. That is why I'm BO
"History doesn't repeat itself, but it does rhyme."
Thanks for posting the entire
Thanks for posting the entire article and not just a link to it.
“...all truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident.”
- Schopenhauer
Well, before you even
Well, before you even consider working in china, realize that entry level analyst pay is around 30-50k USD. You MIGHT have better hours though. MIGHT
The PE firm I worked for only hired local Shanghainese people. The only reason I interned there as a non-local was because I worked for another branch of the firm and switched over. I was also told by BBs and elite boutiques in china that they wanted native chinese for their summer analyst class.
The culture is extremely important. The drinking isn't the tough part, but chinese culture can be uptight about a lot of things. There is a certain way you have to greet people, even how you hand over a business card.
China is great for an internship and studying abroad. not for a ft career.
Hong Kong is a much better bet i you are interested in asia.
couchy: Hong Kong is a much
Hong Kong is a much better bet i you are interested in asia.
But if you work in finance in HK chance is you will be dealing with China related stuff most of the time anyway.
I can tell you how I made each of my millions - but not where I got the very first
brandon st
Hong Kong is a much better bet i you are interested in asia.
But if you work in finance in HK chance is you will be dealing with China related stuff most of the time anyway.
right.. but if you want to go to China and your a foreigner, HK would be better.
You can still advise SEA and Australia in HK.
Your friends who tried to
Your friends who tried to start a business probably just didn't have nearly enough money needed for a startup there. That sounds like a good idea on their part to bring our beers to them but they sounded like they just didn't have enough experience or capital.
Thanks for posting this
Thanks for posting this article, and for the reference to my post.
I agree that for domestic China to China matters, working within the domestic Chinese framework- any company should most definitely stick with using locals. The biggest challenge for Chinese people, where I think there is the strongest niche for a foreigner, is in the cross-border relationship.
It’s a trust factor which comes not just from cultural-esque differences, but more so from the opacity and bureaucracy and lack of openness in the Chinese economy, inherent within the Chinese system. Until there is 1) a strong, dependable, and transparent legal system built on laws that are clear and equally enforced, and 2) the rampant corruption is effectively addressed (these go hand in hand), there will always be a trust gap. No matter how well the mainland Chinese guy speaks English, the exec back home will never fully trust him- he will on some level always see the Chinese guy as a ‘shady Communist trying to rob him at every opportunity’. Not every Chinese is a crook, but if it turns out to be the case, the foreign company has effectively no recourse if a Chinese tries to screw him, as in the case of Sinovel.
This is why for the time being there will still be a need for the white kids- to be the eyes and ears for headquarters back in Cleveland. I’m not saying that the foreigners are incorruptible saints (quite the contrary in the Sinovel case), but that there is a stronger level of implicit trust from the beginning. Obviously more language skills are better, but the more important skill set is the ability to understand and work with both sides. Americans (and Europeans, Aussies, etc.) are better at this because we are better able to adapt and think critically- this comes from our education system. The Chinese education system is purposely not set up to foster independent thought. If it were, there wouldn't be a Communist government anymore.
Also, just because a local Chinese has studied English from 8 years old doesn’t guarantee they will be good. I’ve had a number of higher level IB guys (albeit in HK) tell me that they wish they had a greater number of foreign junior-level people, because they were fed up with the crappy pidgin English that the Chinese kids wrote.
One the flip side of things, as more and more Chinese companies begin to expand outside China, there will be a need for these people that work both sides, not based in China, but in the US and elsewhere. Just like how the CEO from Cleveland would have a hard time in Shijiazhuang, the Chinese boss will also have a difficult time in Cleveland.
Bottom line, I think in the ‘learning Mandarin’ debates language capability is overemphasized in lieu of cultural understanding and the flexibility to work with both sides.
Finally, to the point about the “crackdown” in Beijing- the requirement to carry your passport/residence permit has always been there, supposedly Beijing will actually enforce the rule for the next few weeks. I’ll save my comments about that for another day.
See my other WSO blog posts
olafenizer: Just like how the
Just like how the CEO from Cleveland would have a hard time in Shijiazhuang, the Chinese boss will also have a difficult time in Cleveland.
Shijiazhuang? wtf? that is random
olafenizer: Obviously more
Obviously more language skills are better, but the more important skill set is the ability to understand and work with both sides. Americans (and Europeans, Aussies, etc.) are better at this because we are better able to adapt and think critically- this comes from our education system. The Chinese education system is purposely not set up to foster independent thought. If it were, there wouldn't be a Communist government anymore.
Well said! Also re the requirement for foreigners to register with the government and carry proof of status at all times...the U.S has the exact same requirement. I find it amusing to compare the current Chinese crackdown with Arizona SB 1070. It is probably a lot easier to do racial profiling in China thou. Where is the Chinese ACLU when you need it (CCLU?)
I can tell you how I made each of my millions - but not where I got the very first
olafenizer: Not every Chinese
Not every Chinese is a crook, but if it turns out to be the case, the foreign company has effectively no recourse if a Chinese tries to screw him, as in the case of Sinovel.
You may not have much recourse in China, especially against such a politically connected adversary as Sinovel, you can still fight them outside their home turfs. Sinovel needs to expand abroad in order to survive the wind turbine deflation and margin squeeze in China. And that is where you get them, by pressing for lawsuits and sanctions against them in whichever market they try to enter.
The Chinese market is big enough that many companies do not care for international expansion. This is changing thou as fierce domestic competition forces more and more of them to look abroad, where they actually have to be held accountable for their actions at home.
I can tell you how I made each of my millions - but not where I got the very first
If we really want to be
If we really want to be competitive, we need to link educational visas with work requirements. As in, if the Chinese want to learn at Wharton, they have to work off their debt to America afterward. Don't care whether it's a public or private school - don't let them in if they're not going to work here afterward, and don't let them in unless their education qualifies them to do something we need them to do. They should be economic mercenaries, not exchange students. We just don't need to empower China any more.
Life, liberty and the pursuit of Starwood Points
petergibbons: If we really
If we really want to be competitive, we need to link educational visas with work requirements. As in, if the Chinese want to learn at Wharton, they have to work off their debt to America afterward. Don't care whether it's a public or private school - don't let them in if they're not going to work here afterward, and don't let them in unless their education qualifies them to do something we need them to do. They should be economic mercenaries, not exchange students. We just don't need to empower China any more.
Your post is completely wrong. You are obviously a U.S citizen and have no understanding/knowledge of the hassles that the U.S government created for international students. Many international/bright students would prefer to work in the U.S indefinitely or ideally get some solid 2/3 years of work experience in the U.S or for U.S companies abroad when they graduate. However, they are not allowed to do real , substantial internships, they are given only 3 months to get a job or depart the U.S after graduation. Pitfall? They can't get a job without a work permit and the work permit might takes up to three months. So in the end, the system is set to get rid of international students. It's also hard to get a job even with the permit, because some organizations don't want to deal with the visa issue once the OPT/12 moths practical training is expired.
Don't blame the students because the US economy can't use their brains. It's your government that makes the law.
Power and Money do not change men; they only unmask them
FlakieBear: Many
Many international/bright students would prefer to work in the U.S indefinitely or ideally get some solid 2/3 years of work experience in the U.S or for U.S companies abroad when they graduate. However, they are not allowed to do real , substantial internships, they are given only 3 months to get a job or depart the U.S after graduation. Pitfall? They can't get a job without a work permit and the work permit might takes up to three months. So in the end, the system is set to get rid of international students.
I don't disagree with any of this. The policies we have are stupid, and not set up to fully monetize the assets that are our stellar university system. We need to either educate them and keep them around for a few years to work, or not let them in at all.
Life, liberty and the pursuit of Starwood Points