China’s bankers and traders face smaller year-end bonuses and fewer job opportunities in 2019 amid trade war and market rout

China’s bankers and traders are facing smaller bonuses and fewer job opportunities, as the nation’s securities industry stutters after years of rapid growth.

The sector, adjusting to a slowing economy, tightening credit and plunging stocks, last year saw its first annual headcount cut since 2014, the earliest official data available. A drop in stock sales meant most securities firms didn’t win a single mandate last year, and a third of them will not pay bonuses for 2018, according to Eric Zhu, a Shanghai-based manager at global recruiter Morgan McKinley.

While financial professionals in China are usually paid less than their Western counterparts, paychecks for star performers have swollen to surpass US$1 million in recent years. But the government’s focus on reducing debt and risk, coupled with worsening economic conditions, has squeezed margins at even the biggest firms. With few signs of a turnaround and with the China-US trade war still raging, finance workers hoping that this year will be better are likely to be disappointed.

“We’re looking at 2019 as probably a tougher year,” said John Mullally, regional director at Robert Walters, who handles financial sector recruitment for Southern China and Hong Kong. “Bankers can’t just go out there and name their price.”

China’s brokerages went on a hiring spree in recent years, fuelled by rising markets and ample credit. The industry grew to about 350,000 employees in 2017 from 240,000 three years earlier, and didn’t even shrink during the equities implosion of 2015. Firms bulked up as equity deal values hit a record and trading volumes in China’s stock market surged.

But capital markets were caught up in the overall economic slowdown last year, with stock trading volume at a five-year low as the Shanghai Composite Index delivered the worst performance of any major global benchmark. Equity deal value was a fraction of the high mark reached in 2016, while the total deal value of mergers and acquisitions in China dropped 14 per cent compared with the previous year to US$559 billion, according to data compiled by Bloomberg.