Regional roundup — will expats return as China reopens?
Views vary on the future of living and working in the People’s Republic of China (PRC). You’ll get a different perspective depending on which end of the telescope you’re looking through.
In this edition of Reloverse, we weigh up optimistic and pessimistic sentiments from Western and Asian viewpoints and ask—on balance, what will Sino-Western Global Mobility look like in 2023?
Open borders
Beijing finally dismantled its policy of testing, quarantine and lockdown last month—lifting restrictions on expat travel and ending almost three years of international isolation. The first test of their new strategy is a domestic one: Chunyun, the PRC’s forty-day period of travel marking the Lunar New Year will see two billion passenger trips taken. Air and sea transport between the special administrative region (SAR) of Hong Kong and mainland China have also been eased, with almost 50,000 people crossing the border by ferry on the first restriction-free day alone. President Xi Jinping’s fresh approach is designed to deliver a broad economic revival. But what does it mean for foreign professionals remaining in, or travelling to, China in 2023?
Sense of relief
Growth predictions for the world’s second-largest economy are upbeat but uncertain, as exports to the US and Europe remain subdued. Sentiment, from analysts to the IMF, suggest a sense of relief rather than outright optimism—with many saying supply chains are less disrupted than they feared. But during the pandemic, global organisations have sought to shield themselves from overexposure to China, with Apple looking to diversify iPhone production to India, and Japanese manufacturers, including Honda and Toyota, seeking to drop their dependence on the PRC for parts. However, very few experts expect to see international companies exit the country en masse: it remains one of the best places for manufacturing, particularly as companies seek cost control and stable operations as they compete through a global recession. So, there’s a resurgence of interest from the Global Mobility community that they hope will be shared by qualified candidates.
Local heroes
It’s not only international companies that have seen a shift in strategy and perceptions. While the PRC was locked-down, popularity of domestic brands grew, making competition tougher for established, global players. While luxury products endure, FMCG brands are looking to send in product managers on assignment to localise their global offers, against demand for guochao— increasingly popular products that blend traditional Chinese culture with a modern, sometimes Western twist. European sales and marketing professionals working in the PRC have long leveraged authenticity, quality and safety in China, but the rising dominance of China-made cars shows how attitudes are shifting across all categories and price points. To sense and understand these challenges, most multinationals know they need regional representation in person, in country.
Changing conditions
There were several high-profile studies between 2021-22 to assess the appetite of professionals for moving to or remaining in China. All of them were overshadowed by prevailing Covid conditions at the time. More than three-quarters of European companies and over a third of American corporations in China surveyed reported significant challenges in recruiting and retaining international talent in China—where qualified candidates were unable and unwilling to move due to pandemic restrictions. But that was Autumn 2021, and eighteen months has proved to be a long and turbulent time in geopolitics.
Surge in demand
Across China, particularly in provinces such as Beijing and Shanghai, the number of foreign residents has been declining for a decade. This, plus draconian pandemic travel restrictions, have posed challenges for the Chinese economy and Western multinationals operating there. Many brands have responded by increasing their efforts at localisation, both of products and people. But international organisations recognise the sheer scale of opportunity that remains whilst the Chinese Government is alert to missing the foreign trade, investment and technology transfer it knows it needs to maximise growth in recovery.
While the percentage of foreign employees in Western companies in China is small, key hires often hold specialist skills and critical positions which are vital to corporate culture and diversity in decision-making. It’s unsurprising, then, that Human Resource leaders are seeing a surge in interest from companies and candidates as confidence in China returns, particularly at senior level.
Kelvin Tan, Santa Fe’s General Manager for China agrees, saying “As companies in China become more globalised, demand for foreign talent will continue. The Chinese economy’s resilience and enormous market potential mean it remains irresistible to international organisations”.
Year of opportunity
There is little or no prospect, it seems, of a return to lockdown for businesses or borders—and the Lunar New Year has arrived afresh. Auspicious astrologists say the Year of the Rabbit offers wider opportunities in the workplace, like being handed a ticket to participate in a race. Bright ideas that challenge the norm will be rewarded, wherever they come from. Early indications show they may well be from a global workforce that’s currently based in Berlin, Brisbane and Boston, not just Beijing.
If you’re looking for a relocation partner that understands fast-moving changes in China, we would love to support you and your international teams. Simply drop an email to reloverse@santaferelo.com and we’ll get back to you.
Kelvin Tan
General Manager, China
Email: kelvin.tan@santaferelo.com
Phone: +(86) 21 6233 9700 ext:517
