Generous incentive packages are not enough to attract the right people to smog-bound China, says Paul French

A colleague of mine received a call from a headhunter the other week. Having just packed up to live in the UK after a couple of decades in China, the headhunter wanted to know if he’d consider returning.

No thanks. A bit like your columnist, he’s enjoying a change of scenery for a while. The headhunter persisted and offered a generous package – a swanky Beijing office, a great salary, rent paid, school fees in either China or the UK for a couple of kids if applicable, decent pension plan and a good bonus scheme, several annual return flights (business class), car and driver, generous signing-on bonus and a three-year contract.

The job was interesting and challenging. But still, no thanks.

Surely, though, the headhunter would find plenty of people both suitably qualified and eager to hop on the China Dream Express. Apparently that’s not the case.

No willing candidates

It turned out that the deadline for the post (and four other similarly good jobs) was rapidly approaching and the hard working headhunter had found no willing candidates. Now, admittedly these posts needed a certain amount of experience and contacts, meaning that any suitable candidate would probably never see 40 again, and younger, keener types just off the boat in China were not really the right fit.

For various reasons the job required an expat. But although the old style “package” with lots of goodies is now a rather rare thing for the budding China executive, nobody was interested. And that’s despite the lack of employment opportunities in the west.

One massive stumbling block for the headhunter was Beijing’s air quality. Nobody, it seems, is willing to subject themselves, let alone their children, to the Chinese capital’s foul air.

China’s air quality has had a bad press – as has its water, food safety and just about every other possible measure of pollution – and rightly so. The situation is dire and doesn’t seem likely to get better any time soon. And so, nowadays, the money, the opportunity, the great Chinese gold rush are not enough.

China’s state council knows this. In February, Beijing offered $1.65bn in inducements to cities and regions that make “significant progress” in air pollution control. In particular, control of the particulate matter that is deemed harmful to human health is a priority.

Things are getting so bad that the Shanghai academy of social sciences has decided that Beijing is now “almost unfavourable for human living”. Shanghai is ranked not far behind. Scientists, Chinese and elsewhere, can argue about the levels of dangerous atmospheric particulates, but they are undoubtedly up significantly – in Beijing, Shanghai and 74 other Chinese cities.

There is growing debate as to whether or not pollution is adversely affecting China’s growth. The stats can tell you many stories. For instance, profit growth at larger industrial firms slowed for the fourth consecutive month in December 2013.

The steepest deceleration came in the most heavily polluting sectors: production and supply of electricity and heating, crude oil and gas extraction, and smelting and pressing of ferrous metals. But other stats can tell you a different story.

Toxic location

Our headhunter anecdote tells us that senior business people with long-term China experience don’t wish to engage with the country any more simply because they see it as a toxic place to live and work. They’ll eschew the big salary and the perks. It’s just not worth it. And with western governments seeking to engage the China market aggressively to help reboot their home economies, this is bad news.

Emerging economies have suffered before. Extortion, crime and kidnapping waves have hit markets from Russia to Mexico in the past, scaring away foreign business. Extreme authoritarianism in places such as North Korea make them no-go zones for most, while a basic lack of infrastructure retards economies across Africa and South Asia.

China has traditionally kept crime at a minimum; relaxed investment regulations have encouraged foreign firms; and China has done the heavy lifting of installing infrastructure from high-speed rail to gigantic container ports. But if you can’t breathe the air, it may all ultimately be for nought.

Based in Shanghai and the UK, Paul French is an independent China analyst and writer.

air pollution  Beijing  China  global business  global economies  Toxic 

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