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Finance People. Shanghai Says Jobs, Jobs, Jobs.

Posted in China Business

There is a fairly prevalent theory that the best time to start a new business is during a recession/depression. I buy that. During tough times, established companies often disappear, get overly cautious, and lay off scads of good people, who can be hired relatively cheaply. During tough times, big shifts can occur. A few months ago, I pretty much scoffed at the idea of Shanghai becoming a financial capital, in a post, entitled, “Shanghai To Replace New York As World’s Financial Center. I Don’t Think So.” Though I certainly am not convinced, I certainly am not scoffing either. To use a bad pun (particularly during this bear market), China is grabbing the bull by the horns and seems to be boldly making moves to increase its worldwide standing as a financial center.
My best friend from college, attorney-editor-author, Jacob Margolies (b/k/a “THE Cob”) was kind enough to send me the notes from his interview of some of the people who came from Shanghai to help lead a group of Chinese financial companies who had traveled to London, Chicago, and New York in search of bi-lingual Chinese-English financial talent (strongly focusing on Chinese nationals).
Jacob’s notes are as follows:
By the way, no US press attended this event only Chinese and Japanese
(maybe 6 reporters in all)
Shanghai Job Fair Press conference-December 13 at Sheraton LaGuardia
East hotel in Flushing Queens
————————————————
Dali Mao, deputy director General — Shanghai Bureau of Human resources
and Social Security:
(He introduces the delegation members and welcomes everyone and thanks them for coming to learn more about Shanghai)
We started our trip on December 5. Our first destination was London.
On December 6 we held a similar event to this in London and on
December 9 we held another one in Chicago and this today is the last
event of our trip. We have two main objectives for this trip. The
first is to welcome potential candidates to come to Shanghai since the
city is trying to build itself into an international center of
economy, finance, trade and shipping center in the world. The second
purpose is to take this opportunity to meet with Chinese students and
those Chinese who have been working abroad and learn about their
current situation. This is part of our regular work. That is a brief
introduction.
Q-and-A
Q: According to one report, 27 companies from Shanghai are
participating in this event. Can I ask how many people are you going
to employ and how is the reaction of the applicants?
A: Actually 19 financial institutions from Shanghai came with us on
this trip and another 10 financial institutions of Shanghai put up
their vacancies for them. They did not actually come on the trip. We
have 170 mid-level to high level job vacancies that we brought over in
the financial area. And we also brought over job information on about
1,000 non-financial job vacancies.
Among those 170 positions, it covers jobs in banking, insurance, asset
management and pension insurance.
This event has received very positive feedback from the Chinese
overseas applicants and also from the media.
Nearly 1000 turned out to the event in London. 200 turned out in
Chicago. And according to our very initial calculation already 400
have registered for today’s event. (note it seems over 1000 attended
in NY judging from the large crowds)
This is the biggest event ever organized by the Shanghai municipality
in terms of financial human resources (HR) exchange to set up a
platform for companies to participate in international HR exchange.
Q: (from Taiwan media) Was the trip planned before or after the
financial crisis? And what has been the response of laid-off
financial people abroad to this event?
A: This event is part of our regular work. Shanghai has set a
development goal to be an international center for economics, finance,
trade and shipping in the world. This has been, our so called
4-center strategy, since 1992. In order to build an international
city, you need talent from all over the world. We need financial
talent from all over the world. So this event just happened
coincidentally with the financial crisis. We did similar things
before. We had a similar event in 2002 and earlier.
So far we have received very positive response from the applicants
whether or not they had been laid-off. Generally they want to learn
about the situation in Shanghai. Rather than just a job fair, it is a
kind of information exchange event for those who want to have career
development in China and Shanghai.
—————————————
Sheng Yu Rao-Deputy Director (Division of Human Resources)
Before our departure from Shanghai, we did a lot of preparation to
ensure a proper result We did not just put out job information but
also worked to enhance overseas Chinese knowledge about Shanghai
and also upgrade the local institutions and help them to have better
knowledge of the needs of overseas Chinese professionals. We have
strengthened contacts and channels with overseas Chinese
professionals.
Our initial results have been very positive not just from the people
who showed up but also from the overseas financial institutions who
told us they appreciate us for organizing this event. This has
deepened knowledge about Shanghai. There was a lot of detailed
preparation work to make it easy for the applicants to find a match.
We brought over 12,800 documents, not only about the job openings but
also about the financial institutions of Shanghai and also about
recent developments of Shanghai’s financial industry. And we have
provided contact details for these institutions so overseas Chinese
can have further contact with these institutions. This is a good
opportunity to open and broaden mutual exchange channels with overseas
Chinese.
By way of comparison, we did this in 2002 and then brought 7 companies
and had 50 job openings for the financial service bureau. So you can
see that the scale is quite different this time. It is a big
difference today. Just in terms of quantity it is much higher than
2002.
———————
Weimao Huang-Director General Secretary (Station chief) Shanghai
Municipal Bureau of Human Resources and Social Security:
The issue of returnees, Chinese students studying abroad, is an issue
that the Shanghai municipality attaches great importance to.
Currently we have over 70,000 returnees in Shanghai. We have been
doing our best to attract Chinese students overseas back. Since 2003
we started the so-called 10,000 convergence program-aiming to attract
10,000 students back in 3 years time. And so far annually there have
been about 5000 Chinese students from overseas returning to China and
they have done a great job in adding to the local economic and social
development.
Almost every year we organize some kind of event to enhance contact
with overseas Chinese professionals. In short, we expect more overseas
Chinese to come back to Shanghai to support the economic and social
development and we will provide them opportunities to realize their
career ambitions.
[Mr. Huang invites you all to Shanghai to learn about this overseas
Chinese and career development.]
Q: Has the financial crisis in NY or London affected this trip? Have
businesses in Shanghai decided not to hire that previously had been
planning on participating in this event?
Mao: The China market is pretty normal still and development remains
the key theme and that includes developing a financial center in
Shanghai. So in terms of this event, we do not see any negative impact
at all in terms of the recruiting side.
Q: How are pay and benefits compared to US and Europe in financial
services industry?
Mao It varies depending on the institution.
Q: Can you hire laid-off Wall Street workers at a lower cost now?
Huang: We will not reduce our pace or speed because of the financial
crisis in building a financial center in Shanghai. We still have
dozens of companies coming here to recruit which reflects that the
financial industry in Shanghai is still in quite good shape.
We are very serious about this event and you can see we put out very
detailed job descriptions in terms of job titles the institutions have
listed jobs in development strategy, asset management, working with
financial derivatives, and also for IT jobs.
In terms of salary, we have jobs hiring for up to 1.5 million rmb
which I think is roughly $220,000 dollars.
What do you think?
PS Sorry to keep hawking for votes, but I am pleased to say we have taken the lead in the American Bar Association’s (ABA) Best Law Blogs competition and I would certainly appreciate your going here and voting China Law Blog.

  • Alex

    This strikes me more as a publicity stunt than anything else for the following reason:
    These will mainly be local institutions looking for Chinese-speaking (and in the case of state-owned banks, probably ethnically Chinese) staff with Western backgrounds and education. Multinational banks or those with Western-facing HR would not need to participate in an expedition such as this.
    The problem is that these people have already been thoroughly headhunted. Regarding junior staff, there’s already a surplus of Chinese with Western finance degrees and Western senior workers without finance degrees are likely to be excluded due to the reasons above.
    But ultimately, I don’t think mainland China wants to take the steps to turn Shanghai into a financial hub outside the posturing of local officials, for two simple reasons: 1) Hong Kong is already the financial hub of the entire of Asia, not just China, and competition from Shanghai would weaken that position and 2) the financial libralisation required to create them relinquishes some power to the outside control. If Shanghai had been New York for the last ten years growth may have been even faster, but imagine the effects if the current layoffs in the West were occuring now in the Chinese middle class.

  • http://twofish.wordpress.com/ Twofish

    Shanghai is certainly going to be a financial center. It’s not going to be a global financial center because of currency restrictions, but by the same token Hong Kong is restricted in operating in the PRC because of the same restrictions. Beijing is also going to be a major center because that is where the SOE’s are headquartered. So it is likely that finance in China is going to be divided among these three centers.
    Also, Shanghai is not going to replace New York or London because of time zones, and because of currency restrictions and legal developer, Shanghai is going to complement rather than replace Hong Kong. It’s not a competitive situation because as there is more business in Shanghai, there will be more business in Hong Kong and vice versa.
    To do global trading, you need an operation in three places in the world. Europe, the Americas, and East Asia. As Chinese banks expand, you are likely to see them making a larger and larger presence in New York and London.
    One other problem is that Chinese banks are looking for experienced people. Chinese just out of American graduate schools with no American work experience don’t have any special interest by Chinese companies.

  • http://twofish.wordpress.com/ Twofish

    It’s certainly not a publicity stunt. One reason for it is that there are enough people on Wall Street that have gone back to China and made a decent living so that it is credible to do so. Also the salaries that the Chinese companies are offering are comparable salaries to Wall Street.
    One thing about Wall Street is that most people don’t make multi-millions. Most people end up with $100K-$300K and that’s certainly something that China can match.
    Alex: The problem is that these people have already been thoroughly headhunted.
    Not by Chinese firms. They have been thoroughly headhunted by Western companies, but with tens of thousands of layoffs in NYC, Chinese companies looking for experienced portfolio managers are having a field day.
    Alex: Regarding junior staff, there’s already a surplus of Chinese with Western finance degrees and Western senior workers without finance degrees are likely to be excluded due to the reasons above.
    The magic number is three years of Western experience. The people that are getting hit very hard are people in the US looking for entry level jobs, since there are few jobs in the US, and people in China are looking for experienced workers.
    As far as Western workers, you are eligible if you can speak and write fluent Chinese.
    Alex: Hong Kong is already the financial hub of the entire of Asia, not just China, and competition from Shanghai would weaken that position.
    Hong Kong has a great legal system and regulatory system, and exposure to international markets. It’s big weakness is that it has immigration and capital controls from the Mainland. It’s probably much easier for someone in Fujian to emmigrate to NYC than to HK.
    One big problem is that the one big advantage that NYC had was people trusted US regulators and financiers. Finance is all about trust, and the loss of trust will take years to overcome.
    Alex: Financial liberalisation required to create them relinquishes some power to the outside control.
    Good finance is a careful balance between liberalization and regulation, and it seems to most people that the US has moved the balance too much toward liberalization. Also, I don’t think that the Party has much to fear from business people. Business people need the support of the government to function, and the government needs the support of business people to get money. Ultimately, people make deals, so the political elites and business elites tend to end up working very closely (look at Hank Paulson).
    Among the groups that are doing heavy recruiting on Wall Street right now are Chinese securities regulators and the People’s Bank of China.
    I’m pretty sure that within a few years of going back to China, a lot of the people will end up getting Party memberships.

  • HelloWorld

    “During tough times, established companies often disappear, get overly cautious, and lay off scads of good people”
    What the hell are you smoking ? Ever heard about the raft analogy?
    Lay off scads of good people? Trimming fat rings a bell? It’s the perfect time to get rid of all the lousy individual making your company sink into redundancy. Recessions are heaven for companies, they can lay off and not even feel guilty about it. The perfect occasion.
    What he hell is that ridiculous theory… Let’s hire the losers, they are abailable now and back on earth, not asking for they previous over estimated salary.
    Well, I wish you good luck with your next start up.
    Still puffing the pipe while the world sink Dan?

  • Mark Julien

    I was at the fair in question (in Flushing, NYC).
    In hindsight, I was not their target market (Mandarin-speaking British guy who has lived in China for 8 years, 4 of which in banking), and I estimated an 80% chance that it would be a waste of time…but went out of curiosity anyhow…
    Predictably, it was terribly organised. The companies were sitting behind collapsable camping tables with queues of job-hunters lined up often 20-30 deep. True China-style…there was a lot of queue-jumping and people literally going via the ‘houmen’ (back door) to give their resumes and CVs.
    The company reps that I spoke to (Shenyin Wanguo) were not professional. They dressed and spoke in a way that did not smack of Wall Street, so much as of a local branch of the Agricultural Bank of China in a small town in Guizhou… Now, it is not that I am a snob, but when there are so many bright and able young Chinese financiers emerging all the time (I met many during my time in Shanghai), I do not understand why they sent the crew that they did… Many of them were in their 50s and my guess is that they were long-serving employees who had been ‘awarded’ this trip for ‘guanxi’ reasons rather than for any specific value-add that they would bring to the task at hand.
    In fact, the real value of the day was in meeting the people on the other side of the table – the other job-hunters in the queues – many of them were young Chinese people with 5-10 years of finance experience in the US – I found many of them to be extremely engaging and professional.
    Bottom line – yes, Shanghai has a lot of potential – people are getting better and better all the time, but there is a lot of dead wood that needs to be extracted before it can be a true powerhouse…that will probably take another 10-20 years.
    For my 2 cents on Shanghai as a financial centre – having lived and worked there for 4 years – Shanghai is building much of the hardware for this to happen and the quality of people is improving all the time. However, the big issues that need to be resolved before it can even come close to NYC, HK or London, are that of:
    1) Free Media / Information Transparency
    Perfect information is a basic requirement for economic efficiency. Free media and access to information is the foundation of a strong financial system – NYC, HK and London all have this in common. Shanghai unfortunately is still behind a great firewall / iron media curtain – I cannot get view the BBC in China or a whole host of basic websites and I cannot easily buy newspapers and magazines that give me balanced views of the world (if I buy the Economist, it always has the China pages literally ripped out!).
    2) Clear regulations / rule of law
    Clear regulations and rule of law are fundamental in that few people want to see billions flowing through a system that can be diverted / stopped on a whim… this is definitely improving, but over the past 4 years, I saw some random banking laws popping up all over the place that made no sense to anyone and there are still few MNCs who would choose to arbitrate in China.

  • http://twofish.wordpress.com/ Twofish

    The first people that get laid off in a recession are often less than stellar, but right now, we are in the fourth round of layoffs on Wall Street, and the people who are getting laid off now aren’t being laid off because of poor performance.
    Once you shrink past a certain point, you’ve got rid of all of the people who are incompetent, at which point decisions are made based on line of business. You could be a very wonderful person who just happened to be specializing in a product that no one is buying.
    Mark Julien: Bottom line – yes, Shanghai has a lot of potential – people are getting better and better all the time, but there is a lot of dead wood that needs to be extracted before it can be a true powerhouse…that will probably take another 10-20 years.
    Ten years is about the right time scale, but it’s less a matter of extracting deadwood than bypassing it. It’s pretty amazing the amount of progress you can make if you put some good people near or at the top of an organization.
    Mark Julien: However, the big issues that need to be resolved before it can even come close to NYC, HK or London, are that of
    I think Shanghai’s best approach is not to try even try to compete with Hong Kong, but find things that Shanghai is good at and let Hong Kong be the things that Hong Kong is good at.
    Mark Julien: Perfect information is a basic requirement for economic efficiency. Free media and access to information is the foundation of a strong financial system.
    I think you have it backwards. Rather than saying that X is essential, we don’t have X therefore we are doomed, you reverse the question. Since we don’t have X, how can we make money.
    To give one example. No one cares about stock analyst reports in the US. Everything you read in an analyst report, you can find out for yourself. The consequence of this is that the most junior people become stock analysts and they try to get out of it as quickly as they can. No one in the US makes money from stock analysis, and because no one in the US makes money from stock analysis, any stock analysis is basically a marketing brochure.
    However, given that you don’t have good information in China, someone that gives honest trustworthy stock analysis in China can make a huge amount of money, and I know of one company that focuses on this.
    Also I think you have an idealized notion of how the markets work in NY and London that doesn’t match reality. Things are a lot transparent than the rhetoric assumes. This isn’t necessarily a bad thing. I wouldn’t do business with a bank that would post my checking account on the internet.
    Mark Julien: . Shanghai unfortunately is still behind a great firewall / iron media curtain – I cannot get view the BBC in China or a whole host of basic websites and I cannot easily buy newspapers and magazines that give me balanced views of the world (if I buy the Economist, it always has the China pages literally ripped out!).
    If this is a problem, buy a VPN and you get a an uncensored link. Besides anything in the BBC and the Economist is totally useless for finance.
    Mark Julien: Clear regulations and rule of law are fundamental in that few people want to see billions flowing through a system that can be diverted / stopped on a whim…
    This isn’t the big problem. The problem is uncertainty and not outcome. For example, companies have been going bankrupt in the US for decades, so when a company goes bankrupt, you have a pretty good idea of how gets what. You might get 0%, you might get 100%, but the system has been tested enough so that you know what will happen.
    Since China’s bankruptcy law is new, you don’t know what you will get. You don’t know if you will get 0% or you will get 100%. This isn’t because people are evil. It’s just because there haven’t been enough bankruptcies to know what happens.
    Mark Julien: this is definitely improving, but over the past 4 years, I saw some random banking laws popping up all over the place that made no sense to anyone.
    That’s strange because usually banking laws make a lot of sense to me. It might be political logic, but I’ve usually been able to figure out why a law existed.
    Mark Julien: there are still few MNCs who would choose to arbitrate in China.
    I know lots of MNC’s that would like to arbitrate in Hong Kong which is part of China. There’s no reason for Shanghai to compete with Hong Kong on the things that HK is good at. The HK legal system has taken decades to put together (and interestingly most of the work started in the 1960′s), and it’s pointless for Shanghai to compete with HK on that. So don’t even try. Think of something else.

  • http://twofish.wordpress.com/ Twofish

    Julien: They dressed and spoke in a way that did not smack of Wall Street, so much as of a local branch of the Agricultural Bank of China in a small town in Guizhou.
    That’s fine with me. If you want to do business in Guizhou or Kansas, you don’t want to look like a Wall Street banker. The good Wall Street bankers learn when not to look like a Wall Street banker.
    People in small towns in Guizhou have money and they want to make money. If you want to make money in small town Guizhou, you have to look and act in a way that is respectful of people there.
    I really don’t care how people dress. What I care about is how honest someone is and how smart they are. There are lots of dishonest idiots on Wall Street, there are a lot of honest financial geniuses in Guizhou.
    You have to be careful about people from New York or Shanghai. There are a lot of people from NYC or Shanghai that look and sound smart and honest, but aren’t.

  • Anonymous

    China Law Bog, completely left field but what’s the font for the blog? Love that it’s very easy on the eyes but has a little flair. Thanks!

  • Sybel
  • James G

    Excellent posts/replies Twofish. I am guessing you aren’t from Guizhou but just really understand the X and O’s of China. I find that by keeping up with the comments and the posts at CLB I learn a lot. For me, that is often the mark of a good blog/news source: that the comments/letters to the editors are as illuminating (if not more) than the actual articles.

  • http://www.edhardytime.com/ ed hardy

    Excellent posts/replies Twofish. I am guessing you aren’t from Guizhou but just really understand the X and O’s of China. I find that by keeping up with the comments and the posts at CLB I learn a lot. For me, that is often the mark of a good blog/news source: that the comments/letters to the editors are as illuminating (if not more) than the actual articles.

  • RBS

    Shanghai is and will be for some time a really good place for a finance job, but not so much because it is destined to be the next New York or London. No, rather because there are so really skilled and experienced finance people in China and the need for them keeps increasing because so many of its companies are looking to go public, either in China or outside China.

  • Cheap Mike

    Not going to happen. Not in five years, not in ten. Not ever. Who would trust China with their money? Seriously.