Locals come first: the end of the golden era for expats in China?

Rising living costs, new visa rules and a move towards hiring locals are making life on the mainland harder for foreigners, expats say

PUBLISHED : Saturday, 22 October, 2016, 11:54pm
UPDATED : Sunday, 23 October, 2016, 5:24pm

When American Bob Furnow first came to China in the mid-2000s, he found a country open to outsiders. A decade on, he feels a growing and official resistance to expatriates.

“I think the sense now is the fewer foreigners in China, the better,” the management consultant and entrepreneur told the Post from his home in Beijing.

“I think there’s a sense that the country needs to be Chinese.”

Furnow is not alone. According to an HSBC survey, China has been slipping down the rankings on attractiveness to expats, from third place out of 34 countries in 2014 to 34th place out of 45 this year. An InterNations survey found a similar trend, ranking China 38th out of 61 countries in 2014, and 48th out of 57 this year.

Hong Kong not in the top 10 places in the world to live and work as an expat

An HSBC spokesman said the trend was due to new entrants to the survey putting downward pressure on the league table, while InterNations founder Malte Zeeck said falls in China’s quality of life and family life index were behind it.

Another part of the picture could be the increasing cost of living, with Chinese cities getting more expensive over the past few years, according to the Economist Intelligence Unit’s worldwide cost of living reports editor Jon Copestake. Shanghai, for instance, ranked 102nd in the world for cost of living in 2011 – it is now at 11th place. Copestake put that down to wages and inflation staying relatively robust, and a stable yuan.

But some expats say there has been an increasingly negative response from the government to foreign workers. This follows a string of visa changes over the past few years and government posters earlier this year warning locals against falling in love with strangers from overseas.

Furnow, who is the managing director of RGI Limited, says the golden era of the expat is over, with reduced opportunities for expats in top-level positions as businesses look to cut costs in a tighter economic climate.

By being well established here, one is accustomed to the Chinese ways and better able to be malleable and find a way around the changes, legal or otherwise
Marcel Austin-Martin

“I wish that China would be more open. I’m sensing a closing down somehow,” he said.

In the past, when China’s GDP was growing at faster rates – it was 14 per cent in 2007 – companies were prepared to put up with bureaucracy, pollution and the difficulties of doing business. But now that the period of “fast growth, easy money” is over, and GDP sank to 6.9 per cent growth last year, the overall sense from the business community is “why bother”, he said.

Marcel Austin-Martin, a New Zealander who has lived in China for nine years, said moves such as visa-tightening measures meant life was becoming increasingly difficult for foreigners, although long-time expats might be able to figure out ways around them.

The latest working-visa change, for example, came into force this month for foreigners in selected provinces, and will see expats given an A, B or C rating depending on work experience, language abilities and education.

“As a foreigner who has been here for a long time and is quite well-established, these changes tend to have much less impact,” he said. “By being well established here, one is accustomed to the Chinese ways and better able to be malleable and find a way around the changes, legal or otherwise.”

China-Britain Business Council director Peter Williams said the visa moves were about clamping down on low-skilled employment and making sure people coming to the country could make a contribution.

“They’re just part of a natural process that China’s going through of concentrating – perhaps more explicitly than before – on attracting high-quality international talent in relevant industries,” Williams said.

He added he had noticed more locals being hired for top-level positions, particularly Chinese educated overseas.

Everyone there was either looking for something or running from something, or had a damn good reason for being in Beijing in those days
Scott Brown

“That’s clearly one part of the change in the expat profile, but we see that as a positive story,” he said.

Shanghai-based designers Jamie Daza and Catalina Calin, from Colombia and Romania, have also found during their almost decade-long stint in China that working conditions have changed, with expats becoming less prized and more integrated. But that is not necessarily a bad thing, they say.

“It’s a more egalitarian work environment I think … Not just by being a foreigner do you get everything any more,” Daza said.

“They [the Chinese government] want to tell the right people to be here. They’re also protecting the locals that deserve those same jobs. I don’t think they want to make it complicated, they want to make it fair.”

Hong Kong-based Scott Brown, chairman of expat support agency Kiwi Expats Abroad China, and founder and managing partner of corporate advisory firm Redfern Associates, first came to China 18 years ago.

“Back in 1997 it was like the Wild West,” he said. “It was like that bar in Star Wars – everyone was a freak of some sort. You had such extreme characters. Everyone there was either looking for something or running from something, or had a damn good reason for being in Beijing in those days. Now there are hordes of young foreigners getting off the plane every day.”

He said now that the economy had slowed companies were not throwing “silly money at China and hoping it comes right later”.

“They were blinded and seduced by the size of the economy,” Brown said. “I think now it’s a lot more rational.”

He worries for young expats who can’t get visas or jobs because they are now competing with locals. But he is still seeing plenty of young foreigners turning up as excited as he was as a fresh university graduate back in 1997.

“In many ways, we’re lucky to be here. It’s absurd what’s happening here now, historically,” he said.

“So that’s exciting to be part of. But that’s not for everybody.”