Transfer to Beijing? Why expats are saying 'no thanks'

Written by Katie Holliday I Additional reporting by Wendy Min and Bo Gu
People wearing face masks walk near the Forbidden City during heavy pollution in Beijing on February 28, 2013.
Ed Jones | AFP | Getty Images

Poor air quality in China is a growing headache for international firms trying to get foreign employees to work in the world's number two economy.

According to an annual survey by the American Chamber of Commerce in Beijing published last week, nearly 48 percent of its 365 members said concerns over air quality were turning senior execs off China, compared with 34 percent last year and 19 percent in 2010.

24-year old Australian post-graduate student Victoria Kung said she was willing to put up with the smog for the next few years, but could not see Beijing as a place to live and work long term.

(Read more: Smog-the economic kind-swallows China)

"To be honest, it's been taking a toll on my psychological well-being knowing that I am breathing in little particles every day. The pollution has to be the worst thing about living here," she said. "I can only do this when I'm young."

China's rapid industrialization over the past few decades has come at a price, analysts say.

The World Health Organization last month labeled China's smog issue a crisis after air pollution levels in Beijing hit hazardous levels for seven days in a row.

Air quality is considered to be much worse in Beijing than Shanghai, China's financial center, as the capital city is choked with traffic and surrounded by the heavily polluted suburb of Hebei.

According to George McFerren, head of Asia Pacific at careers website eFinancialcareers, China has been an unpopular working location for some time now.

"Over a year ago an eFC survey found that 84 percent of people living and working in Hong Kong said they would not consider a move to mainland China," he said.

"Of those who would consider moving to mainland China a clear majority - at 62 percent - cited better career opportunities while only 4 percent cited a better quality of living as their main motivation," he added.

Lee Quane, regional director at international HR consulting firm ECA International, said the high levels of pollution in Beijing and Shanghai was leading more firms to try and lure workers in through financial incentives.

(Read more: China's smog driving top foreign talent away)

"What we're seeing in terms of recruitment into China, is the re-introduction of hardship/location allowances over the past one to two years," said Quane, referring to additional funds designed to compensate for the reduced air quality.

But Martin Cerullo, managing director of development for Asia Pacific at HR consultancy Alexander Mann Solutions, said that for some people financial incentives were not enough.

"What we've seen is that on your own, you are more likely to take a decision based on whether it's good for your career, so you may decide to put up with the pollution for two years or so," he said.

"But it is a different type of decision when a family is involved, that's why it's harder to attract people to mid- to senior management positions," he added.

China's economy is choking on smog
China's economy is choking on smog

Wang Shen, a 36-year old marketing executive at an international IT company, just moved to New Zealand with her three year old daughter to escape the pollution in Beijing.

"Life is short, we can't live there anymore. I'm not thinking about going back," she said. "In my daughter's kindergarten [in Beijing], many kids had respiratory problems and you know when kids get asthma or pneumonia it could be fatal."

ECA International's Quane said firms were stocking up on air masks, purifiers and were encouraging car-pooling to improve conditions for workers.

He added that if recruits were given a choice of Asian cities to live in, Singapore and Hong Kong often came out on top.

(Read more: China smog makes capital 'barely suitable' for life: report)

"China's pollution problem is having a very detrimental impact on companies as there is a scarcity of skills and talents. Not only are these firms competing against other companies, but now other cities as well," he added.

Earlier this month, vice minister of the Chinese Environmental Protection Ministry said 71 out of China's 74 cities did not meet environmental standards.

Premier Li Keqiang declared war on pollution at the opening of China's annual session of parliament earlier this month. The government has pledged to bring 60 percent of its cities up to national pollution standards by 2020.

By CNBC's Katie Holliday: Follow her on Twitter @hollidaykatie