Working in China: The Facts

China’s economic development today is phenomenal. It is a wonderfully interesting place for business managers because it is the fastest-growing area in the world. But there is a lot to know about working in China. Throughout Leadership Success in China: An Expatriate’s Guide there are insightful facts that will be helpful as you embark on what will likely be the most exciting experience of your professional career. Here are just a few:
  • China claims to have at least 17 million university students, but that’s out of a population of 1.3 billion people. (The United States has roughly the same number of college students from a population of 390 million.) But it’s not just a matter of quantity.  
      
  • Even though the Chinese government now spends more on education than ever before, that spending has not kept pace with economic growth. Education spending has been almost static in proportion to the total economy. A 1993 target to spend 4 percent of the gross domestic product (GDP) on education by 2000 remained unmet even in 2007, so the goal was shifted. The government now hopes to meet that 4 percent figure by 2010.  
     
  • In 2007 employee turnover at multinational companies in China was estimated to be 14.3 percent. Employees are even more mobile in large coastal cities. For example, in bustling Shanghai and Guangdong province, some companies lose a third of their employees every year. Turnover at state-owned enterprises is far lower. Their employees tend to have fewer marketable skills or to not want to lose their welfare benefits, such as subsidized housing loans or company-provided housing. In 2006 the highest turnover rates of non-manual workers were in sales (19.8 percent) and marketing (18.5 percent) in Beijing.  
     
  • Salaries for capable local staff can rise substantially each year. Hewitt Consulting found that annual salary increases for all categories of staff averaged 8.8 percent for 2007, and it estimates this figure to be 8.7 percent for 2008. Mid-level management received the highest salary increases among all categories of staff, averaging 10.3 percent in 2007.  
     
  • Individuals often perceive asking for help as a sign of incompetence or weakness. In the workplace, for example, when an individual avoids sharing a problem or issue with a manager, it might well be due to a desire to save face rather than a lack of willingness to accept responsibility or ownership of a task or problem.  
     
  • Teamwork in China is a challenge. This might surprise those who think of Asian cultures as community-minded and harmonious, but in China the reality is different. Traditionally, this society was not based on a broad sense of community so much as along family and clan lines. Teamwork within families is commonplace, but teamwork among otherwise unrelated and unconnected individuals has little historical precedent. Also, given the scarce resources mentality that has been discussed earlier in these pages, there is little natural tendency for teamwork. All this means that teamwork does not come naturally in China at either the junior or senior level.   
     
  • DDI’s 2005 report, Leadership in China: Keeping Pace with a Growing Economy, found that the most critical skills for Chinese leaders are motivating others, building trust, retaining talent, and developing and then leading high performance teams. But many managers in the study were found to be weakin these skills. Many have taken a more traditional Chinese approach, whichis incompatible with today’s global environment and unlikely to fit in with thecorporate culture of the typical modern or Western organization.   
     
  • Both younger and older Chinese managers will be uncomfortable dealing with poor performers on their teams. Maintaining face and harmony is always the preferred option, even if this is not always the reality in practice. When a team is hobbled by a poor performer, the best option is for that person to leave of his or her own accord. Cultural constraints limit many managers’ ability to give adequate performance feedback and conduct performance reviews. So, a more usual strategy in China is to keep the under-performing employee in place, hoping that he or she will cause little damage, and to find a new person to perform the required role at the same or a higher organizational level. Such an arrangement hardly qualifies as sound management, but it does maintain harmony. Coaching and providing feedback are difficult tasks in China, largely because Chinese are extremely sensitive to face.