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Rein: What Foreigners Looking for Work in China Need to Know

Last Friday, the Labor Department announced no new jobs were created in August in the United States. With fears of a double dip recession rising, the unemployment situation, already mired at 9.1%, could get worse before it gets better.

Job seekers read recruitment newspapers at a job fair in Shanghai, China.
Bloomberg | Getty Images
Job seekers read recruitment newspapers at a job fair in Shanghai, China.

Many Americans are looking to China's soaring economy for job opportunities. One of my unemployed friends, a former banker with JPMorgan in New York, recently emailed to ask about job opportunities in China. Nearly every day recent university graduates to mid-career professionals contact me for advice about finding employment.

Firms such as Apple, Goldman Sachs , and Microsoft have announced they will add staff in China. Citigroup said it would triple the number of employees in the country from three thousand to ten thousand within three years. Even Google, which shut down its search engine in China last year and began redirecting users to its Hong Kong site, is hiring.

An article in the New York Times, two years ago, seemed to suggest that foreigners could find jobs in China, even if they didn't speak much Mandarin or didn't know about the local culture.

But is that reality? The simple answer is no.

Working in China can be a great career experience. Younger executives get far more responsibility than they would in America. Charlotte, one of my firm’s analysts, leveraged her China experience with us to pursue an MBA at the University of Pennsylvania’s Wharton Business School.

With China becoming the growth engine for some of the largest companies like Intel , Disney and Starbucks, executives with China-based experience are likely to be in high demand.

There are, however, serious downsides to working in China to think about before heading over. Unlike several years ago, being able to speak English or having overseas work experience does not automatically give you an advantage.

Nearly one million Chinese have studied abroad in the last three decades. Almost 30 percent have returned to China in recent years because of job opportunities and daunting U.S. work visa policies. Nearly 80 percent of my firm’s recent hires in the past two years studied in America and the United Kingdom.

Companies often prefer to hire these returnees because they can move with ease between Chinese and Western business environments. Given this pool of qualified Chinese, foreign job seekers have to work harder to prove their value. The Chinese government is also making it difficult for foreigners to get visas unless they have demonstrated expertise in sectors like finance and IT.

Foreigners lucky enough to find jobs should also expect lower salaries than what they get at home. Even before the financial crisis, companies began phasing out expatriate packages with cars, chauffeurs and housing allowances - except for the most senior executives. Expats should expect to be paid a fraction of their salary back home until they can prove that they add value to the China operations.

Often the best jobs are in smaller firms, run by executives that can show you the ropes of the Chinese business world. They are more likely to train you, and potentially pay you the high salaries you want. Bigger multinationals often prefer to relocate someone from headquarters - who knows the company culture - to China for several years.

The most successful foreigners often take a low paying job to start. After two or three years of proving their value, learning Mandarin, and networking, they finally find the compensation packages they were looking for.

Despite the lower pay and the challenges, working in China can be a great experience and a stepping stone.

Shaun Rein is the founder and managing director of the China Market Research Group (www.cmrconsulting.com.cn) a strategic market intelligence firm, and is based in Shanghai.

He is the author of the upcoming book “The End of Cheap China: Economic and Cultural Trends that will Disrupt the World” published by John Wiley & Sons in the U.S. He does not own shares in any company mentioned. Follow him on Twitter at @shaunrein.