GlobThink

“American for the Americans” was the slogan of the Monroe doctrine, which basically said that Europeans should not interfere in American politics… Replace “America” with “China”, “Europeans” with “Expatriates” and “Politics” with “Business” and you will get what I want to discuss today.

I would like to discuss about the role and the opportunities of expatriates in China. Is China only for the Chinese? What can expatriates contribute with doing business in China? How will the situation change in the foreseeable future?

From my point of view, the knowledge of a foreign culture and, in particular the language, is the main asset an expatriate can contribute to China. The second asset is the knowledge of the company culture of the mother company of a firm established in China.

A local Chinese manager is not only cheaper but more productive and understands better the local environment than a foreigner. On the other hand, a local Chinese that has graduated from a top university  in America or Europe, may have as high managerial qualifications as a foreigner. As a result, a good Chinese manager may be prepared for both local and global business, while a foreign manager is unlikely (but not impossible) to be productive in local business in China. I know all generalizations are a big lie. But as an expatriate, with a good command of Mandarin, I really feel much less effective in China than local Chinese, when it comes to local business.

It is not only that foreigners feel at disadvantage in local business, even overseas Chinese do sometimes feel like that. I have several Overseas Chinese friends, who speak perfect Mandarin, but they still tell me that they also feel certain disadvantage when competing with local Chinese. The reason is that their way of thinking is absolutely different from a local Chinese (here I have a post in which I describe Chinese working culture according to me experience).

There are currently many expatriates in China, but in many companies thy are already being replaced by local managers, who are cheaper and more effective. This is the normal process, however. When a company first gets established in one country, it usually needs to rely on expatriates, because setting up operations requires somebody who knows the company very well and because companies getting established in a new country do not usually know local managers in which they trust. After some years in the country, operations will be more stable and they company would have had time to establish local contacts and train local managers to take on the local subsidiary in the future. This is a very sensible HR strategy for internationalizing a company: expatriates first, locals later. As a result of this, we can say that the future of foreign companies in China will depend more and more on Chinese managers and less on expatriates.

Being an expatriate is not doubt very profitable and also a wonderful intercultural experience. But there is one disadvantage from an career development point of view. It is very difficult for Expatriates to change jobs. Expatriates usually have much higher salaries than local, but it is very difficult for them to find another job if they want to change. This means that many expatriates are usually blocked inside  their companies. And the reason is obviously that expatriates are much more expensive nad much less effective when it comes to local business.

IMy opinion is that a foreigner in China can contribute in:

• Interfacing between headquarters abroad and operations/sourcing in China. This is what usually expatriates do most in China, and this is what I was doing in China. I think in the future there will continue to be opportunities in this area for expatriates.
• Working in sales for Chinese companies that want to become international. This is a relatively new phenomenon. Chinese companies want to sell abroad but Chinese salesmen are usually not fluent in the culture of some foreign countries and will probably not be very successful. Chinese students have traditionally gone to study to Anglo-Saxon countries. As a result, it is much easier to find Chinese salesmen who speak English and understand the culture in the US, UK or Canada, than to find Chinese salesmen who speak French, Spanish, German, Italian or Russian. Now many students go non-English speaking countries and this is going to change very soon. In the meantime there will be great opportunities for foreigners here.

Image: the image belongs to me. It is a fake terracota warrior I saw in a Hong Kong restaurant.