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  • Nov 26, 2014
  • Updated: 7:21am
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JOB MARKET

Hong Kong losing its lustre as mainland Chinese firms raise pay

PUBLISHED : Friday, 15 March, 2013, 12:00am
UPDATED : Friday, 15 March, 2013, 5:15am
 

Big mainland cities like Shanghai are ratcheting up the pressure on Hong Kong on a new front - enticing professionals and specialists with higher pay and perks as the salary gap between the two narrows.

According to British recruitment agency Hays, 47 per cent of mainland-based businesses increased salaries by more than 10 per cent last year, compared with only 4 per cent in Hong Kong.

A Hays survey of 1,200 employers in Asia, including those in Hong Kong, the mainland, Japan and Singapore, showed that a chief financial officer on the mainland could earn up to 2.5 million yuan (HK$3.1 million) a year, beating a Hong Kong counterpart whose annual income tops out at HK$3 million.

"China led Asian countries in terms of salary growth despite uncertain economic conditions in other parts of the world," said Simon Lance, regional director for Hays in China. "Competition in the job market is fierce and it is a salary-driven market."

The British company said talented executives worldwide, including expats and overseas Chinese, were increasingly looking to relocate to the mainland.

Skill shortages remain a stumbling block to foreign companies' aggressive expansions in the mammoth market, with 30 per cent of employers saying they planned to further raise salaries by more than 10 per cent this year.

China led Asian countries in terms of salary growth despite uncertain economic conditions in other parts of the world
Simon Lance, regional director for Hays in China

The Hays survey showed that 93 per cent of employers were worried about a shortage of skilled workers, which would hamper their business growth.

But Lance said the trend of more professionals being drawn to China by increasing pay packages could be reversed. China's higher personal income tax, difficult business environment and poor food-safety record could emerge as primary concerns, he said.

The performance of foreign businesses in China has declined as they fall victim to rising labour costs. A survey by the American Chamber of Commerce in Shanghai revealed recently that US companies reported profit drops for a second consecutive year last year due to rising costs, tougher competition and a slowing economy.

 

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This article is now closed to comments

bhklee
Nice on the survey, but unless your tax is neutralized in China, the net income is still significantly lower given that HK tax is step up and goes up to a max of 17%, whilst China's max is 45%. Assuming the top tax bracker, your pay has to be at least 51% higher (I just used to 17% tax rate for HK and didn't bother with the different step ups) in China so that your take home is the same.
nancy.fung.7982
would be nice if you can provide a link to the survey data. The article reported only the top notch salary which is rather meaningless to normal people.

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