Mica Schneider, Go East, Young MBAs: China's booming economy,
multinationals' greater presence there, and weak U.S. hiring cause more
Chinese studying abroad to return home, Business Week Online, September 2,
2004.
I found this article in the B-School News section of Business Week Online,
to which I exhort you all to subscribe. September 08, 2004 at:
http://www.businessweek.com/bschools/content/sep2004/bs2004092_6667_bs001.ht
m?c=bwmbasep8&n=link1&t=email
[If this long url does not load, you may have to paste the end back on in
your browsers url window. It is unclear to me if this item is limited to BW
subscribers since I have a cookie for BW on my machine. ]
EXCERPT:
China's booming economy, multinationals' greater presence there, and weak
U.S. hiring cause more Chinese studying abroad to return home
Mason Xu, 29, graduated from Harvard Business School in 2003, saddled with
$70,000 in debt from both his degree and his wife's master's degree from a
nearby college. Yet he turned down two job offers in the U.S., instead
choosing to work as a senior financial analyst at Intel (INTC ) in his
native China.
Xu's not alone in his decision. He says all 14 of his native Chinese
classmates have returned to China since graduating. That's a big change from
previous years, when a "great majority" of Chinese students stayed in the
U.S. to work, Xu says.
SLOW U.S. RECOVERY. China is becoming a hot market for MBAs as both local
and Western businesses gain momentum in the country. Its economy has been
growing rapidly, with real gross domestic product jumping 9.1% in 2003 and
9.7% in the first half of 2004. So more Western-educated Chinese MBAs, known
locally as hai gui, or "returning sea turtles," are going home to try to get
a piece of the job-market pie.
With China's new business revolution and the buildup to the 2008 Olympics,
"things are happening here," says James Li, managing partner of E.J. McKay &
Co., which provides mergers and acquisitions advice, in Shanghai. Li is a
1999 graduate of Chicago's Graduate School of Business and says Chinese MBAs
"want to be a part of" China's growth and make an impact on their careers
and society.
Tighter restrictions on H1(b) work visas in the U.S. are giving Chinese
graduates another reason to look back to the Far East. And with the slowly
recovering U.S. economy, finding a lucrative job in the post-dot-com era is
even more difficult. A 2004 Wharton graduate, speaking on the condition of
anonymity, says he would have faced a tougher challenge had he stayed in the
U.S. "As a Chinese, I know the culture and the language," he says. "It's
easier [in China]
to climb the hierarchy
into top management."
"SOMETHING TO OFFER." Word is out about companies in China having something
to offer MBAs, says George Wang, a 2002 graduate of the Kellogg Graduate
School of Management and the president and founder of the Chinese
Professional Network (CPN), an organization of Chinese management
professionals. "Companies need more qualified people, not just cheap labor,
to compete." Of the group's 2,000 members with MBAs from the U.S. or Europe,
more than half plan to seek jobs in China this year, vs. a third in 2001,
according to CPN.
Fortunately for this group, their timing is right. Top consulting firms and
investment banks with offices in China are busy filling vacancies with MBAs.
Goldman Sachs (GS ) will hire 30% more undergraduate and graduate students
in 2004 vs. the previous year for its Asia operations, which includes
offices in Beijing, Shanghai, and Hong Kong. The investment bank says more
than 70% of its new MBA hires will come from top U.S. B-schools such as The
Wharton School, Harvard, and Chicago.
Citigroup (C ) is also beefing up its MBA roster in China this year and
next. "We see the need to step up our hiring in China to support our growth
plans," says Vivan Lo, director of leadership staffing and development for
global corporate and investment banking at Citigroup Asia Pacific. Lo is
filling several vacancies in the firm's Beijing, Shanghai, and Guangzhou
offices with foreign-taught MBAs, and she'll send recruiters to campuses
abroad to give MBAs insight into careers in Asia.
LOCAL COMPETITION. Even with more hiring, China's post-MBA job market is
tough, and U.S. and European B-school grads "have to fight to find their
job. People aren't rolling out the red carpet," says Stacy Palestrant,
executive director of China 2024, a project sponsored by consulting firm
Katzenbach Partners that will study 100 Chinese MBA grads from top B-schools
over the next 20 years."
Foreign-taught MBAs have to compete with MBAs from local universities, and
there's some debate about whether an expensive MBA from the U.S. is more
valuable than a Chinese one. "We don't see the difference" in quality, says
Nevin Xiao, vice-president for human resources for China at China
International Capital Corporation, which works in association with Morgan
Stanley (MDW ). "If they go through the [application and interview] process,
and they're hired, then they're the same."
Xiao hired about 30 MBAs last year -- just a handful from universities
abroad -- and his company only considers MBAs who are willing to fly back to
Beijing for an interview. But Citigroup's Lo says foreign-taught MBAs are
more prized because they arrive with an international network of classmates.
They also benefit from international business education and exposure, "which
will help [them] appreciate what our customers, shareholders, and our
regulators may expect from global financial institutions like ours," she
adds.
SALARY SETBACKS. B-schools also are taking steps to help their Chinese
students. Julie Morton, associate dean of MBA Career Services at Chicago,
spent two weeks in China last March meeting with around 30 companies to
encourage them to recruit Chicago MBAs. Schools are also organizing more
"Asia Treks" -- trips to the region to meet recruiters -- which have a big
impact on corporate recruiters. "Four years ago, maybe we had two schools
that came [with students to Asia]," says Rani Swords, an executive director
in human capital for Goldman Sachs in Asia. "Now we have requests from
probably 15 MBA schools."
One big difference for Chinese MBAs who return home is salaries --
especially compared to what their classmates are earning in the U.S. and
Europe. "Don't expect, ever, to earn a high salary in China," says CPN's
Wang. The jobs that pay high salaries are snatched up quickly by about 50
MBAs each year, he says. The rest of the MBAs pursuing jobs in China are
more likely to work for what he calls "second-tier" consulting firms and
corporations for an annual salary of $40,000 to $50,000 or even less.
That's still big bucks in China, where the average Chinese made $960 a year
in 2002, according to World Bank data. But for most Western-taught MBAs
saddled with thousands of dollars, or euros, in debt, the money isn't enough
to finance monthly payments. Some Chinese outfits even refrain from
recruiting MBAs from abroad. "With our salary level, we won't be able to get
the best [MBA graduates]," says E.J. McKay's Li, though he receives a few
hundred résumés and cold calls every year from MBAs the world over who are
looking to work in the firm's Shanghai office.
For many grads, the chance to jump on China's business revolution counts for
more than money. "By going back, they're getting in on the ground floor of
something that's very big. They're placing themselves in the middle of the
action," Palestrant says. And above all, there's no place like home --
especially when home is a more vigorous China [....].
--------------------------
As always, your comments are welcomed by the Academy of Management's
Management Education and Development Discussion Forum. Post them to
Mg-Ed-Dv@maelstrom.StJohns.edu .
Cybercollegially,
Charles Wankel
St. John's University, New York
wankelc@stjohns.edu