How to Navigate China’s Growing Mobility Market
Q&A with Graebel’s Meng Ziang Chy
China boasts the second largest economy in the world and nearly 1.4 billion people, making it a key destination for companies expanding globally. At the same time, Chinese companies are also opening new locations both within and outside the country. It’s a vast and complex market, especially when it comes to global mobility.
That’s why we asked Meng Ziang Chy, Graebel’s new director of business development for the Asia-Pacific Region, to share his in-depth knowledge of the Chinese market and insights about the country’s mobility-related opportunities and challenges. Based in our Shanghai office and bringing more than 10 years of mobility experience in China, Meng advises global and Chinese companies about how to develop effective relocation programs and navigate this evolving market. In this interview, Meng discusses key trends in China that are shaping talent and workplace mobility and shares actionable steps companies can consider for developing or deploying a successful mobility program in China.
What are the top three mobility trends you’re seeing in China and what’s driving these trends?
Many global companies continue to expand into China, which offers international work experience and opportunities for their transferees. However, there are three emerging trends within China that are redefining mobility in this market:
- Recruiting and bringing back Chinese nationals to work in China. These individuals have usually studied abroad, typically in the U.S. or U.K., but they grew up in China. This gives them the unique ability to understand both Western and Chinese cultures, as well as speak multiple languages. These Chinese nationals are a valuable talent asset for Chinese companies looking to expand within and outside the country.
- Chinese companies investing in global expansion. Chinese companies are expanding to other countries and relocating their employees. As a result, they need to create mobility programs that address Chinese culture and effectively transfer their people to new cultures and countries. The exciting part is that Chinese companies move quickly and are willing to try new things, so they’re open to developing innovative mobility programs.
- Rising domestic relocation in China. In addition to Chinese nationals relocating internationally, there’s been an increase in domestic relocations in China. Due to rising costs of living in so-called Chinese Tier 1 cities like Shanghai and Beijing, companies are moving inland to Tier 2 (Wuhan, Chengdu, Hangzhou and Chongqing) cities. However, this presents a challenge as Chinese employees often wish to remain close to their families and company headquarters in the Tier 1 cities. For Chinese companies, this means they need to provide exceptional employee experiences and create mobility programs to address the cultural challenges of domestic relocations.
How do those domestic and international relocation trends impact mobility programs in China?
Overall, mobility is a new area in China. Chinese companies are defining their own mobility programs, and you can’t copy-and-paste mobility programs from a North American or European company. There are cultural differences. For example, Chinese transferees tend to go on shorter-term assignments like 12 to 18 months, while their families may remain in China. A lack of international schools for Chinese families in other countries also leads to the decision to keep their families in China. Chinese companies may send two assignees to the same country, and they may be housed together.
Domestic relocations of Chinese employees also have cultural considerations that companies must consider. We’ve found that it may be easier to relocate someone from the U.S. to a Tier 2 Chinese city like Suzhou than it is to relocate a Chinese employee from a Tier 1 to Tier 2 city. That’s because Western employees may view the relocation as an opportunity to grow within a company or gain new experiences. Chinese employees may associate being at the company headquarters, typically in a Tier 1 versus Tier 2 city, with greater career opportunities. Plus, Chinese employees are more family oriented, and if a transferee and his/her spouse both work, they likely rely on grandparents for childcare. This could mean companies need to relocate an entire family of several generations, which would be challenging. Alternatively, families may not want to relocate their children to another Chinese city due to the country’s unique local school system. A child’s school registration is tied to one city or neighborhood and schools require local household registration or so called “Hukou,” which makes it more difficult to transfer schools. In these cases, Chinese transferees also may go on a shorter-term assignment, while his or her family remains at home.
What are the biggest opportunities and challenges for global companies wishing to enter or expand into China?
The Chinese government is opening up to foreign investments and investors in China. This is good news for companies wanting to grow and move into China. In addition, China’s Belt and Road Initiative (BRI) is a development strategy linking China and Europe through a network of railways, highways and maritime routes – a modern-day Silk Road. This ambitious initiative will further encourage international business and mobility. However, mobility in China brings several challenges. These include:
- Regulations. Not only are there regulations unique to China, but laws may vary by districts within the country. For example, a work visa policy may be different in Shanghai versus Beijing, even though they’re both Tier 1 cities. Regulatory expertise is a must to decipher laws and develop an actionable mobility program.
- Rising costs. As previously mentioned, the costs in Tier 1 cities are rising and forcing some companies to move to Tier 2 or 3 cities. However, many Chinese employees are reluctant to leave their families and relocate to other cities. Companies may need to provide additional benefits, experiences or services to persuade them to take these assignments.
- War for talent. Considering that China has the largest population in the world, there’s a war for talent, particularly in the technology sector. Plus, China is transitioning from a manufacturing to service-based economy, and the population is aging – both of which add to the competitive marketplace. Recruiting and retaining the right talent will be a key factor in the continued business growth in China.
Based on your and Graebel’s experience in China, what types of mobility services and support do companies need to address these opportunities and challenges?
The competition for talent and cost pressures to relocate to Tier 2 and 3 cities mean companies are focusing more on identifying ways to create positive employee experiences. Given the culture and many local complexities, there’s no one-size-fits-all mobility program that can be applied across global companies entering the Chinese market or Chinese companies expanding within or outside the country. That’s why Graebel remains flexible in our approach and solutions to determine what works best for each company and transferee.
Our strength lies in providing building blocks of services and ensuring there aren’t any gaps, and we have a broad supplier network to provide the best experiences for transferees. For domestic relocations like a transferee going from Beijing to Wuhan, Graebel understands and can help navigate local regulatory differences. For international relocations, for example, cultural and language training is important to offer to non-Chinese employees and any family members in order to ensure a smoother transition. Competitive relocation packages and the flexibility to place talent in different markets are also essential.
How do you seek to help companies entering or expanding in China?
Based on my experience and in-depth knowledge of the Chinese market, I’m able to listen, understand and work with our team globally to suggest mobility programs and services that address diverse needs. My Graebel regional counterparts in North America, Europe/Middle East/Africa and Asia-Pacific also rely on me to advise their clients and prospects who are looking to expand into the Chinese market.
What is most gratifying about helping companies with their mobility programs in China?
All companies are figuring out what works to incentivize and support their transferees in China. There’s no “Golden Rule” yet as to what works best. Chinese mobility teams are popping up on a daily basis, and they are fine-tuning their programs and determining how to provide an exceptional employee experience. It’s an exciting market and time for Graebel to help companies, and our Shanghai office recently expanded to meet the growing demand. There’s an additional opportunity for service providers to address the unique needs of companies and transferees in China, and that’s where Graebel comes in to help find the best solutions like immigration, housing, training, schooling or other relocation logistics.