Looking for Work – Consider Moving to China

China Wants to Hire You — Should You Go?

ByJoe Mont, Staff Writer , On Thursday August 4, 2011, 8:00 am EDT

BOSTON (TheStreet) — NBA players may soon follow the lead of a growing number of Americans looking for work in China.

With the upcoming basketball season jeopardized by an expiring collective bargaining agreement, several NBA superstars — among them Dwyane Wade and Carmelo Anthony — have said they would consider playing for Chinese teams, which have been growing an increasingly rabid fan base.

In looking for opportunities in the so-called Middle Kingdom, the players are not much different than others turning to China for job prospects.

Put simply, there are at least jobs to be had. Unlike the U.S, with near double-digit unemployment, there is great demand in China for skilled professions such as banking and finance. That demand shows little sign of slowing, bolstered by the fact the country had 10% growth last year and will experience nearly the same rate this year.

There has traditionally been demand for English-language teachers in China, a job niche that typically attracts young graduates enticed by the prospects of living abroad. Now U.S. companies are looking to move top managers into Chinese territories, and executives have found themselves forced to relocate. Recently, General Electric moved the headquarters for its X-ray division and top division executives to China to capitalize on growth in the Asian marketplace.

Entrepreneurs are also enticed by lower taxes, decreased regulation, cheap labor and a pipeline into the massive Asian marketplace, while Chinese companies are looking to expand globally by building their U.S. brain trust.

An exact count of how many Americans are working in China is not readily available, as neither country has a uniform process for registering such employment status.

UniGroup Worldwide, an international mover of household goods with headquarters in St. Louis and Amsterdam, used its own shipping business to gauge the trend. It found a 46.7% increase in the number of American’s relocating to China for work over the past three years.

Its international migration study, released last week, was based on more than 15,000 household goods moves completed in 2010 for major corporations. In the U.S., UniGroup is affiliated with Mayflower Transit and United Van Lines.

It shows that last year European countries topped the list of destinations for U.S. residents moving abroad, consistent with trends over the past 10 years. Asian countries, however, appear higher and more frequently on the top destinations list.

The U.K and France were the top two countries American’s were moving to, followed by China. In 2000, China wasn’t even among the top 10.

Once you get there

Adapting to local customs can be just as challenging as the logistics of moving there for a transplanted worker.

Similar to Japan, there is a ritualistic nature to rules of etiquette and even to business cards — they should be printed with English on one side, Chinese on the other; always presented and received with two hands; and momentarily studied before being carefully tucked away.

English is not as much a barrier, but interpreting subtext is crucial, given China’s stoic traditions. Hierarchy and one’s place in the “food chain” of a company can dictate nearly all interactions, and direct confrontation is considered impolite.

The website The idle Kingdom, run by expatriates Matt and Kara Banker as a resource for those planning to live or work in China, offers a rundown of some of the common types of visas China requires of all working foreigners.

The “Z” visa is for those working for an established company in China and are tied to that workplace. Businesses are issued a limited number, which typically cover only full-time employees. A Z-Dependent visa is available for a spouse and children.

The “F” visa covers foreign experts in China temporarily to work on a specified project.

Transportation, if walking or biking doesn’t meet your needs, has to be addressed.

“Purchasing a car in Beijing has become much more problematic in the last year,” says Matt Banker, who moved to Beijing to be the youth director at an international church. “To get a car you will need to win the license plate lottery, about a 1-in-5 chance, then you can purchase a car for about two to three times the cost of what you would pay in America. You’ll also need to pass the written driver’s license test, since China doesn’t recognize foreign licenses.”

The other option is to hire a driver, which will cost roughly 5,000 yuan a month, or about $777.

Another expense beyond food and housing an overseas worker or employer will need to be prepared for: securing an international health insurance policy.

For those with children, English language schooling needs to be considered. Homeschooling can range from $500 to $20,000 or more for an international school, Banker says.

Stateside expenses, such as storage of belongings, and the cost of trips back home also need to be part of a total budget.

If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income.

According to the IRS, however, you may qualify for a foreign housing deduction. Anyone who lives in China for more than a year also pays taxes to that country on their worldwide income (less than a year incurs only domestic income) at a progressive rate that ranges from 5% to 45%.

Decide fast

Despite the demand for foreign workers, the job market pendulum could eventually swing back toward America.

Within the next five years, the U.S. is expected to experience a “manufacturing renaissance” as the wage gap with China shrinks, proposes a recent analysis by Boston Consulting Group, a global management consulting firm. With U.S. wages stagnating while Chinese wages rise at about 17% per year and the value of the yuan continues to increase, the gap between U.S. and Chinese wages is narrowing rapidly.

“All over China, wages are climbing at 15% to 20% a year because of the supply-and-demand imbalance for skilled labor,” says Harold Sirkin, a BCG senior partner. “We expect net labor costs for manufacturing in China and the U.S. to converge by around 2015. As a result of the changing economics, you’re going to see a lot more products ‘Made in the USA‘ in the next five years.”

As the wage gap shrinks, once inventory and shipping costs are considered, China’s advantage may be minimal at best, BCG says. It predicts that products that require less labor, such as household appliances and construction equipment, are most likely to shift to U.S. production. Goods that are labor-intensive and produced in high volumes, such as textiles, apparel and TVs, will likely continue to be made overseas.

That trend may already be revealing itself.

NCR has flipped production of its ATMs back to domestic soil and toy manufacturer Wham-O last year returned 50% of its Frisbee production and Hula Hoop production from China and Mexico to the U.S.

 

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