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BUSINESS & TECH

Doing Business in China: Expats Find Chinese Companies Are a Trip

By Doug Young
(Beijing) — It used to be that foreigners who came to China worked mostly in foreign companies, often multinationals engaged in trade or manufacturing. But a growing number are finding their way into local firms as the economy matures, and discovering such jobs have their own special characteristics that can be quite rewarding but also require some adjustment.

As someone who has worked on both sides of the aisle, I feel fairly qualified to talk about some of those differences, which range from pluses like quick decision-making at Chinese companies to minuses like big bureaucracy. At the end of the day, there are quite a range of options these days for going local, some that come close to Western working environments while others feel more like the older days of cradle-to-grave “Iron Rice Bowl” employment.

The bigger picture is that Chinese firms are hiring foreigners to top positions with growing frequency. Chief among those is PC-maker Lenovo, which at one point briefly hired a foreigner as its CEO. Telecom giant Huawei is another big example, hiring a foreigner as chief technology officer at one point, while the No. 2 person at internet leader Tencent is from Hong Kong.

Fortune magazine’s latest list of the world’s 25 best employers has yet to gain any Chinese entrants, which isn’t too surprising given the relative youth of most of China’s biggest names. But six of the top 10 employers in China, in a list compiled by recruiting specialist Zhaopin and Peking University, are local firms, led by Tencent and also including rival Alibaba. Other local names in the top 10 are mostly financial firms, including insurance giants Ping An and PICC, and China Merchants Bank.

In my usual unscientific manner, I surveyed several friends and contacts on their experience working in Chinese companies to get their thoughts on the matter, from a CEO to some younger people starting in their careers. Their answers varied quite a bit, but one common theme was that most said they weren’t treated any differently due to their foreign status. That’s good in many ways, but also means expats going local shouldn’t expect perks like housing allowances, annual home leave and the like offered by big multinationals.

It’s useful to reflect on just how much the work scene has evolved for expats in China over the last three decades. The corporate China I remember from the 1980s wasn’t too welcoming of foreigners, who were treated mostly with suspicion by big state-owned enterprises of that time. The few exceptions were highly skilled people, who were seen as key to helping these massive companies make a difficult leap to the present from the vintage early 20th-century technology and processes that many were using.

At that time, the vast majority of foreigners employed in China worked for embassies or multinationals, or, like me, were employed as “experts” teaching in local universities. My friends and I used to joke about our expert status back then, since most of us were recent college graduates and hardly experts at anything beyond our ability to speak English.

Nowadays, foreigners are welcome in a much broader range of companies, though their presence does seem more weighted to the private sector, probably partly for reasons of personal choice and also because many of the big state-run behemoths aren’t quite sure what to do with us.

That said, one of the most notable qualities of many of these more entrepreneurial companies is their ability to make decisions quickly, even when they involve major moves. This quality is a bit of a double-edged sword. On the plus side, it means you can try out new things and move quickly into hot new areas, something that typically required countless meetings, memos and discussion during my previous tenure at a major Western media.

But on the downside, such haste often produces half-baked initiatives, meaning execution is poor and chance of failure much higher. This mentality is behind the frequent boom-bust cycles one often sees in China, and one of my contacts astutely identified an underlying mindset that says “there is money to be made quickly, but that money is fleeting and so we need to act immediately.”

One good example occurred a few years ago when a friend approached me about a new financial magazine his employer, a major media company, had been asked to help launch. The partner and initiator of the project was a Nanjing company with no media experience, and my friend’s company had no background in financial journalism. Still, they went ahead with the project, including hiring an entire team, offices and the like. I was quite skeptical, and wasn’t surprised when the magazine folded after just a year or so, devouring huge piles of cash and wasted time in the process.

Another interesting point came from one of my female friends, who noted a certain level of “sharing” required of her that made her just slightly uncomfortable at her two Chinese employers, including a private NGO. Such sharing includes queries about her relationship status, unsolicited comments on her weight and clothes, and pressure to join a constant stream of company events and outings outside of work. Longtime foreigners in China are used to this kind of sharing, but it might certainly create a bit of discomfort for the uninitiated.

Excessive bureaucracy, involving numerous signatures, approvals and chops for even the most mundane of tasks, is another topic that comes up frequently, and one I’ve touched on in the past in a discussion of work visas.

Along similar lines, one area that seems way behind the big multinationals is human resources, especially when it comes to special documents needed by foreigners. “You can’t call your friendly HR department because there isn’t one,” mused one contact who worked for a year as CEO at a major Chinese tire-maker. Working hours actually followed a somewhat Western pattern, with startups and private companies in general more likely to demand long hours, while big SOEs were filled with clock watchers.

At the end of the day, it’s important to note that corporate China is very much itself a work in progress, with the result that many aspects of working at local companies can sometimes seem half-baked to a foreigner used to a more mature environment. That can be frustrating at times, but the upside is that a person with strong initiative can often advance quickly, and new projects, even costly ones, can often move ahead at lightning speed in comparison with Western equivalents.

Doug Young has lived in Greater China for two decades, including a 10-year stint at Reuters, where he led China corporate news coverage. Send your questions or comments to DougYoung@caixin.com.

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