UNTIL last April, Graham Sargent was cruising fast along the corporate career track, doing deals all over the region and picking up performance prizes and sales awards. Then came the morning meeting that was about to change it all. With no warning, Mr Sargent was told he had to be 'let go' from his regional senior management position at the Hong Kong office of a multi-million dollar US health-care company where he had worked for more than six years. At least he was one of the lucky ones: his company gave him six months' notice - but then he was out. 'It was a bit of a shock but when everything settled, I decided not to worry,' he said. 'I thought it would be pretty easy to find another job.' As Mr Sargent discovered, it wasn't. He underwent a series of counselling sessions to help him deal with his sudden dismissal and then decided to tackle his problem head on. He sent out his resume to 60 headhunters and applied for 50 jobs. He was granted several interviews and on a few occasions even made it back for a second or third meeting. But then, inevitably, the rejections came. The reasons were always the same: even though Mr Sargent may have had the experience and background for the job, he wasn't Hong Kong Chinese, couldn't speak the language - and therefore wasn't qualified. 'There is without doubt an upsurge in nationalism in Hong Kong. People are thinking, acting and doing everything Chinese to a higher degree than before,' he said. 'That is the biggest obstacle for any expat in finding a job in Hong Kong these days.' After having fully experienced the effects of localisation, Mr Sargent gave up his search a few months ago to go into business for himself, setting up a company specialising in 'paperless office' computer systems. He said it had become apparent, after eight months of extensive job-hunting, that companies were letting expatriates go to take on qualified local staff, or that they were hiring from within. And the fact that Mr Sargent was 49 when he was laid off - even if there are plenty of chief executives and company directors working successfully at that age - didn't help. Mr Sargent's unforeseen redundancy and prolonged unemployment were even harder to deal with given his background: 25 years in engineering, regional sales and business development in China, India, Pakistan and the rest of Southeast Asia. But he feels all that was overlooked because he was an outsider. Certainly, the unemployment woes now being faced by some senior expatriate managers in Hong Kong are no worse than any other; across the board, and at all levels, hiring has slowed down as companies cut costs or streamline their operations. China's overheated economy has cooled down, expansion has slowed and there is still mounting uncertainty over Hong Kong's future. And the common perception that expatriate workers are expensive and that non-Chinese residents may not necessarily be given the same status after 1997 is pushing employers to hire locally. Even overseas-born Chinese, who might be thought ideal for many managerial positions, are having a hard time. Caroline Yeung (not her real name), 33, has sent out 50 application letters and received 40 rejection slips in return. She has a background in financial services, business administration and marketing - typically areas of growth in Hong Kong - yet has remained unemployed for five months. She was made redundant in May, when the stockbroking company where she had worked for 18 months merged with another firm. There was no warning and a third of her colleagues - all middle managers - were affected. 'I didn't realise it had become this hard to find a job here if you are not local Chinese,' she said. Martyn Willis is a 14-year resident of Hong Kong who lost his management job last year and has since teamed up with Mr Sargent. He sent off 300 letters in response to classified advertisements and got four replies - three were negative and one led to an interview that was cancelled. 'Business is not about the colour of your skin, but employment is,' he said. 'With all this localisation, Hong Kong is going to be little more than the capital of Guangdong province.' In some cases, previous demand for imported talent is being diverted towards overseas-educated Hong Kong-born Chinese, while locally-trained managers are also in the running for top jobs. And as the number of available positions shrinks, so, proportionately, does the traditional likelihood of an expatriate assuming priority. But the recent evolution in the local job market is, according to recruitment experts, not necessarily a bad thing. Peter Bennett of executive search firm Bennett Associates Ltd said the opportunistic nature that marked top job-seekers in the past has slowly diminished. 'There is much less moving around and more consolidation,' he said. 'People are holding on to their jobs.' While headhunters are still receiving calls from international and Asian companies seeking to fill high-level positions, Mr Bennett said the job market was more competitive than ever and employers were more discriminating. And while some sectors - including accountancy - are saturated, other positions requiring specialised skills always attract good people - expatriate or not. 'Hong Kong is becoming a much more normal expatriate environment,' said Paul Curley, managing director of Q3, a company specialising in locating new jobs for executives who have been made redundant. 'There will always be overseas companies who will send their own people to Hong Kong. But the most important thing now is Asian experience. The fact that they [candidates] might have done a great job in Paris or Chicago doesn't mean they can do it here.' Given the rate at which companies are laying off staff, Q3 has seen its work-load pile up: as an outplacement specialist, the company is retained by firms who have to let staff go, to help the newly unemployed find work. At least for Q3, business is good, having doubled every year for the last few years. Most of the executives Q3 is now working with are expatriates and some are still in shock after being laid off. 'We've seen outbursts of crying and anger,' Mr Curley said. 'These people are very upset. They've had the wind knocked out of them and they've had their identity pulled away. 'They are no longer a vice-president of ABC Company. They are just another unemployed person. 'But after a couple of weeks, they find their equilibrium and focus on the future.' Which is when discouragement starts to set in: in the past, it would take an average of three months for someone to find a new job. These days, it could take twice as long. 'I would tell anyone - if you have a job, hold on to it,' Mr Curley said. 'And if you want to look for something else, do it while you are still employed, and from a safe berth.' Mr Bennett and Mr Curley believe that despite the current economic lull, Hong Kong still offers more opportunities than most other places in the world. 'Hong Kong is still full of open-minded people who are prepared to give you a chance,' Mr Curley said. Mr Sargent is still waiting for his business to take off, but feels he is in a far better position than if he was still hunting for work: 'Try to find another job in Hong Kong? Forget it. There's only so far you can look.'