Go East, Young MBAs
By Mica Schneider
Mason Xu, 29, graduated from Harvard Business School in 2003, saddled with $70,000 in debt from both his degree and his wife's master's degree from a nearby college. Yet he turned down two job offers in the U.S., instead choosing to work as a senior financial analyst at Intel (INTC ) in his native China.
Xu's not alone in his decision. He says all 14 of his native Chinese classmates have returned to China since graduating. That's a big change from previous years, when a "great majority" of Chinese students stayed in the U.S. to work, Xu says.
SLOW U.S. RECOVERY.
China is becoming a hot market for MBAs as both local and Western businesses gain momentum in the country. Its economy has been growing rapidly, with real gross domestic product jumping 9.1% in 2003 and 9.7% in the first half of 2004. So more Western-educated Chinese MBAs, known locally as hai gui, or "returning sea turtles," are going home to try to get a piece of the job-market pie.
With China's new business revolution and the buildup to the 2008 Olympics, "things are happening here," says James Li, managing partner of E.J. McKay & Co., which provides mergers and acquisitions advice, in Shanghai. Li is a 1999 graduate of Chicago's Graduate School of Business and says Chinese MBAs "want to be a part of" China's growth and make an impact on their careers and society.
Tighter restrictions on H1(b) work visas in the U.S. are giving Chinese graduates another reason to look back to the Far East. And with the slowly recovering U.S. economy, finding a lucrative job in the post-dot-com era is even more difficult. A 2004 Wharton graduate, speaking on the condition of anonymity, says he would have faced a tougher challenge had he stayed in the U.S. "As a Chinese, I know the culture and the language," he says. "It's easier [in China]…to climb the hierarchy…into top management."
"SOMETHING TO OFFER."
Word is out about companies in China having something to offer MBAs, says George Wang, a 2002 graduate of the Kellogg Graduate School of Management and the president and founder of the Chinese Professional Network (CPN), an organization of Chinese management professionals. "Companies need more qualified people, not just cheap labor, to compete." Of the group's 2,000 members with MBAs from the U.S. or Europe, more than half plan to seek jobs in China this year, vs. a third in 2001, according to CPN.
Fortunately for this group, their timing is right. Top consulting firms and investment banks with offices in China are busy filling vacancies with MBAs. Goldman Sachs (GS ) will hire 30% more undergraduate and graduate students in 2004 vs. the previous year for its Asia operations, which includes offices in Beijing, Shanghai, and Hong Kong. The investment bank says more than 70% of its new MBA hires will come from top U.S. B-schools such as The Wharton School, Harvard, and Chicago.
Citigroup (C ) is also beefing up its MBA roster in China this year and next. "We see the need to step up our hiring in China to support our growth plans," says Vivan Lo, director of leadership staffing and development for global corporate and investment banking at Citigroup Asia Pacific. Lo is filling several vacancies in the firm's Beijing, Shanghai, and Guangzhou offices with foreign-taught MBAs, and she'll send recruiters to campuses abroad to give MBAs insight into careers in Asia.
Even with more hiring, China's post-MBA job market is tough, and U.S. and European B-school grads "have to fight to find their job. People aren't rolling out the red carpet," says Stacy Palestrant, executive director of China 2024, a project sponsored by consulting firm Katzenbach Partners that will study 100 Chinese MBA grads from top B-schools over the next 20 years."
Foreign-taught MBAs have to compete with MBAs from local universities, and there's some debate about whether an expensive MBA from the U.S. is more valuable than a Chinese one. "We don't see the difference" in quality, says Nevin Xiao, vice-president for human resources for China at China International Capital Corporation, which works in association with Morgan Stanley (MDW ). "If they go through the [application and interview] process, and they're hired, then they're the same."
Xiao hired about 30 MBAs last year -- just a handful from universities abroad -- and his company only considers MBAs who are willing to fly back to Beijing for an interview. But Citigroup's Lo says foreign-taught MBAs are more prized because they arrive with an international network of classmates. They also benefit from international business education and exposure, "which will help [them] appreciate what our customers, shareholders, and our regulators may expect from global financial institutions like ours," she adds.
By Mica Schneider
B-schools also are taking steps to help their Chinese students. Julie Morton, associate dean of MBA Career Services at Chicago, spent two weeks in China last March meeting with around 30 companies to encourage them to recruit Chicago MBAs. Schools are also organizing more "Asia Treks" -- trips to the region to meet recruiters -- which have a big impact on corporate recruiters. "Four years ago, maybe we had two schools that came [with students to Asia]," says Rani Swords, an executive director in human capital for Goldman Sachs in Asia. "Now we have requests from probably 15 MBA schools."
One big difference for Chinese MBAs who return home is salaries -- especially compared to what their classmates are earning in the U.S. and Europe. "Don't expect, ever, to earn a high salary in China," says CPN's Wang. The jobs that pay high salaries are snatched up quickly by about 50 MBAs each year, he says. The rest of the MBAs pursuing jobs in China are more likely to work for what he calls "second-tier" consulting firms and corporations for an annual salary of $40,000 to $50,000 or even less.
That's still big bucks in China, where the average Chinese made $960 a year in 2002, according to World Bank data. But for most Western-taught MBAs saddled with thousands of dollars, or euros, in debt, the money isn't enough to finance monthly payments. Some Chinese outfits even refrain from recruiting MBAs from abroad. "With our salary level, we won't be able to get the best [MBA graduates]," says E.J. McKay's Li, though he receives a few hundred résumés and cold calls every year from MBAs the world over who are looking to work in the firm's Shanghai office.
For many grads, the chance to jump on China's business revolution counts for more than money. "By going back, they're getting in on the ground floor of something that's very big. They're placing themselves in the middle of the action," Palestrant says. And above all, there's no place like home -- especially when home is a more vigorous China -- and that's enough to whet the appetites of even the most adventurous MBAs.
Schneider is a reporter for BusinessWeek Online
Edited by Suzanne Robitaille