Jobs at Chinese companies are starting to appeal to foreign managers

LAST December Lenovo, China's biggest computer maker, pulled off a coup when it pinched Bill Amelio, the American head of Asia-Pacific for Dell Computer, to be its chief executive. In June Shanghai Automotive Industry Corp (SAIC), the mainland's largest car company, managed a similar trick: it appointed Phil Murtaugh, a General Motors veteran who until last year was boss of GM in China, as head of its international operations. And last week David Wei, the China president of B&Q, a British do-it-yourself chain, said he was defecting to Alibaba.com, a Chinese online business-trading site and the world's biggest. Mr Wei is ethnically Chinese, but spent a decade at multinationals abroad and in China.

Chinese companies are hiring more and more western and western-trained executives—and at an increasingly senior level. Ivo Hahn, the boss of Xecutive, a headhunting firm based in Hong Kong, has placed 20 such individuals with mainland firms in the last year, compared with none at all the year before. Diana Yang, at the Beijing office of Hewitt, a human-resources consultancy, says Chinese companies have become more aggressive at hiring expatriates for top jobs as well as for technical positions. “The Chinese have the will and the cash to attract western talent,” says James Harris, managing director for China at Hays Executive, Britain's biggest recruitment company.

What the Chinese gain is clear enough. China is short of middle managers, mainly because the Cultural Revolution denied education to a generation of the country's best talent. Foreign executives, or those with experience at foreign firms, can help Chinese companies crack overseas markets. At home, they bring technological skills and modern business practices, which help Chinese firms compete with multinationals and domestic rivals. Their presence also adds shine to a company's board of directors, and can lift its credibility with international investors, perhaps ahead of a stockmarket flotation.

Top managers at western companies, on the other hand, had few incentives until recently to jump ship. That they are starting to do so reflects two things. First, Chinese firms are becoming more respectable: some, such as CNOOC, Baosteel and Lenovo, are among their industries' global elite. Second, a growing number of foreign managers, many of whom have worked in China for years, are excited about the country's future and want to stay.

“You can take a Chinese company and build it into an international-class business,” says Mr Wei. Mr Murtaugh left GM China after the top brass in Detroit moved his immediate boss, the head of Asia-Pacific, to Shanghai, too close for comfort. Ironically, Mr Murtaugh may have more freedom at SAIC, which is owned by the government, than he ever did at private-sector GM. He is SAIC's representative on the board of Ssangyong Motor, and is charged with turning around the loss-making South Korean group. Because of his experience, he is likely to take the lead in developing SAIC's first export models. Robert Gonzales, another western recruit to Lenovo, where he is head of human resources, chose to jump from IBM when the Chinese firm bought the American group's computer division last year. “Working with the Chinese is the most fascinating job I've ever done,” he says.

Meanwhile, mainland firms are becoming more comfortable places to work as the English language spreads, other foreigners join and the culture becomes more cosmopolitan. It also helps that western-trained executives can name their price. Recruits can expect anything from a 20% premium to double their current package. Salaries of 6m yuan ($750,000) are possible, with expatriate benefits on top. Headhunters report that since Chinese companies are not used to benchmarking, managers who drive a hard bargain can strike extremely lucrative deals.

Still, for most foreign executives, a Chinese firm remains too risky. For many, cultural differences—murky business practices, pollution, language difficulties and, sometimes, poor job security—rule out anything beyond a short posting. Recruiting a westerner therefore remains an uphill battle, says Mr Hahn, especially for Chinese firms from second- or third-tier cities, where life can be harsh.

And despite their appetite for western expertise, local firms have reservations too. They worry that waiguoren, meaning outsiders, will upset their corporate culture, be too direct, or even—heaven forbid—contradict the chairman. Richly paid foreigners can also cause jealousy among locals. Alibaba, which has 30 expatriates in Hangzhou, has made disclosing one's salary a sackable offence, says its head of human resources, Jin Jianhang.

Given that, a lot of Chinese companies still prefer hiring Chinese managers with Western experience rather than foreigners, especially since many hai gui (Chinese returnees) are now coming home from overseas and are willing to try their luck at mainland companies, not just multinationals. But foreign executives are becoming increasingly comfortable in China. And that means competition for jobs at mainland companies could soon start to heat up.