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Education & Employment

Top executives refuse to work in China; slowing economy and pollution the main reasons


A tourist boat, decorated with green lights, travels on the Pearl River amid heavy haze in Guangzhou, Guangdong province

A tourist boat, decorated with green lights, travels on the Pearl River amid heavy haze in Guangzhou, Guangdong province

China‘s smog is making it harder for foreign firms to convince top executives to work in the country, the American Chamber of Commerce in Beijing said on Wednesday, offering some of the strongest evidence yet on how pollution is hurting recruitment.

Some 48 percent of the 365 foreign companies that replied to the chamber’s annual survey, which covers businesses in China’s northern cities, said concerns over air quality were turning senior executives away.

Pollution is “a difficulty in recruiting and retaining senior executive talent”, said the report. The 2014 figure is a jump from the 19 percent of foreign firms that said smog was a problem for recruitment in 2010.

China’s slowing economy, however, remained the top risk for companies, the report added.

Foreign executives increasingly complain about pollution in China and the perceived impact it is having on the health of themselves and their families. Several high-profile executives have left China in recent years, citing pollution as the main reason for their decision to go.

Almost all Chinese cities monitored for pollution last year failed to meet state standards, but northern China suffers the most. It is home to much of China’s coal, steel and cement production. It is also much colder, relying on industrial coal boilers to provide heating during the long winter.

The capital Beijing, for example, is surrounded by the big and heavily polluted industrial province of Hebei. It is also choked by traffic.

By contrast, China’s commercial capital Shanghai, in the south, suffers less air pollution. Indeed, a similar survey conducted by the American Chamber of Commerce’s Shanghai branch did not ask if pollution was affecting recruitment.

Premier Li Keqiang “declared war” on pollution at the opening of the annual session of parliament this month, part of a push to wean the world’s second biggest economy from credit-fuelled growth to more sustainable development.

China also pledged on Sunday to make 60 percent of its cities meet national pollution standards by 2020.

Lulu Zhou, associate director of the Beijing Office of international recruitment agency Robert Walters China, said some foreign executives were using pollution to negotiate higher salary packages.

“We have seen some senior level professionals … who are concerned about relocating to Beijing because of the pollution,” she said.

In a sign of the growing corporate concern over pollution, Japanese electronics firm Panasonic Corp has told its unions it will review the hardship allowance paid to expatriates in China because of the air quality, a spokeswoman said on Wednesday.

And a state-owned Chinese insurer said this week it would offer Beijing residents insurance cover against health risks caused by air pollution, promising to pay out 1,500 yuan ($240)to policy holders hospitalized by smog.

The policy, available for people aged 10 to 50, will also pay out 300 yuan when the city’s official smog index exceeds 300 for five consecutive days, a level considered “hazardous”, according to a notice posted on the People’s Insurance Company of China website (www.epicc.com.cn).

Beijing’s official air quality index (AQI), which measures airborne pollutants including particulate matter and sulphur dioxide, routinely exceeds 300, and sometimes hits levels higher than 500.

SLOWING ECONOMY THE BIG CONCERN

Despite the concerns over pollution, China’s cooling economy, which government leaders project to grow this year at about 7.5 percent, posed the greatest risk to companies, according to those polled in the Beijing survey.

Firms increasingly reported a stagnation or contraction in operating margins compared with previous years, it said.

As a result, more foreign firms saw China “as just one of many investment possibilities”, the report said.

Nevertheless, a majority of companies surveyed remained optimistic about the business outlook for the next two years.

“This optimism is driven by our membership’s confidence in their own ability to adjust and deal with the challenges,” said Mark Duval, China president of the American Chamber of Commerce.

Many members had high expectations that recently announced economic reforms might deliver, Duval added.

But two in five respondents to the Beijing survey said the business climate had become less welcoming for multinationals, with a similar number saying foreign firms were being singled out in a series of pricing and corruption investigations.

Those investigations have targeted various sectors, including pharmaceutical and milk powder multinationals, as well as American technology companies.

Most recently, China’s anti-monopoly regulator said Qualcomm Inc. was suspected of overcharging and abusing its market position. The U.S. chip giant has said it was cooperating with the investigation by the National Development and Reform Commission.

Respondents also chafed at perceived state enterprise favouritism, with 77 percent believing policies benefiting state-owned firms had negatively impacted their business.

“My judgement is that the biggest area that drives (this response) would be market access,” said Duval.

Protection of trade secrets and company name theft were among other issues worrying businesses. Half of all respondents said that protecting confidential company data was a concern.

Other difficulties were a lack of clarity and inconsistency in the application of laws and regulations, the survey said.

Source: Reuters “China’s smog driving top foreign talent away: U.S. business survey”
 

About chankaiyee2

Author of the book "Tiananmen's Tremendous Achievements" about how with the help of Tiananmen Protests, talented scholars with moral integrity seized power in the Party and state and brought prosperity to China. The second edition of the book will be published within a few days to mark the 25th anniversary of Tiananmen Protests All the parts in the first edition remain in the second edition with a few changes due to information available later and better understanding. There are also some changes for improvements of style. The new parts are Chapters 12-19 on events in China after the first edition was published: The fierce power struggle for succession between reformists and conservatives; Xi Jinping winning all elders’ support during his mysterious disappearance for 2 weeks in early September, 2012; and Xi Jinping Cyclone. Chan Kai Yee's new book: SPACE ERA STRATEGY: The Way China Beats The US An eye-opening book that tells the truth how the US is losing to China. The US is losing as it adopts the outdated strategy of Air-Sea Battle while China adopts the space era strategy to pursue integrated space and air capabilities: It is losing due to its diplomacy that has given rise to Russian-Chinese alliance. US outdated strategy has enabled China to catch up and surpass the US in key weapons: Hypersonic weapons (HGV) that Pentagon regards as the weapon that will dominate the world in the future. Aerospaceplane in China’s development of space-air bomber that can engage enemy anywhere in the world within an hour and destroy an entire aircraft carrier battle group within minutes. Anti-satellite (ASAT) weapons, anti-ASAT weapons, stealth aircrafts, drones, AEW&C, etc. The book gives detailed descriptions of China’s weapon development based on information mainly from Chinese sources that the author monitors closely. U.S. Must Not Be Beaten by China! China is not a democracy. Its political system cannot prevent the emergence of a despotic leader or stop such a leader when he begins to bring disasters to people. A few decades ago, Mao Zedong, the worst tyrant in world history did emerge and bring disasters to Chinese people. He wanted to fight a nuclear war to replace capitalism with communism but could not bring nuclear holocaust to world people as China was too weak and poor at that time. If a despot like Mao Zedong emerges when China has surpassed the US in military strength, world people will suffer the misery experienced by Chinese people in Mao era. China surpassing the US in GDP is not something to worry about as China has the heavy burden to satisfy its huge population, but China surpassing the US in military strength will be world people’s greatest concern if China remains an autocracy. US people are of much better quality than Chinese people. What they lack is a wise leader to adopt the correct strategy and diplomacy and the creative ways to use its resources in developing its military capabilities. I hope that with the emergence of a great leader, the US can put an end to its decline and remain number one in the world. China, US, space era strategy, air-sea battle, space-air bomber, arms race, weapon development, chan kai yee

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