Executive Search in China – 2022 Outlook
Following a robust 8 percent cyclical rebound in 2021, most analysts expect GDP growth in China to slow to the 4.3 to 5.5 percent range in 2022.
Why is China still growing so fast?
Economists generally attribute much of China’s rapid economic growth to two main factors: large-scale capital investment (financed by significant domestic savings and foreign investment) and rapid productivity growth. These two factors appear to have gone together hand in hand. The digital transformation and the massive push towards 5G, cloud computing, and industrial IoT (Internet of Things) will be key pillars driving China’s global competitiveness.
Market Access and US-China trade deal
China’s record-breaking exports in 2021 pushed the annual trade surplus to a new high. Exports in 2021 totaled USD 3.36 trillion, while imports were $2.69 trillion for the year. This left a trade surplus of $676 billion for the whole year.
China bought 57 percent of the US exports it had committed to purchase under the phase-one trade deal. Agriculture purchases under the agreement reached 83 percent of the total commitment. There was a shortfall in the purchase of other foreign commodities as they are affected by restricted export access to China or the COVID effect on supply.
COVID and CHINA
The spread of COVID-19 variants continues. Omicron’s greater transmissibility suggests to us that the government will maintain China’s COVID zero policy. This means that the country will impose more selective lockdowns; quarantine-free travel or open borders in China are unlikely in 2022.
However, International trade is still reaching record highs, and most multinational companies operating in China maintain an optimistic outlook.
Vaccine therapeutics, drug discoveries, and medical supply issues will drive high demand for both global pharmaceutical and local Chinese biotechnology products in 2022.
AUTOMOTIVE MARKET IN CHINA 2022
China is the world’s largest car market. Production of vehicles will hit 27.5 million in 2022. Sales of China’s new energy vehicles (NEVs), including passenger and commercial vehicles, will be around 6 million units this year. The Chinese government has set a target that NEVs to make up 20% of sales by 2025. In 2022, government subsidies of NEVs will be reduced by a further 30%.
Persistent supply-chain bottlenecks, inflationary pressures, and supply issues in semiconductors could increase the risk for setbacks in automotive production in 2022.
TALENT OUTLOOK FOR 2022
Companies in China expect 4 to 5 percent salary growth in 2022.
The future of work in China shall include:
- More and more businesses offering a more flexible model where staff decides where to work. Employers are putting their faith in people to lead a long-term recovery.
- Talent scarcity continuing: The mismatch between education and workplace needs contributes to the issue, among other factors. Also, it should be noted that China has effectively closed its borders, hampering talent mobility. Many executives cannot return to China. COVID and political issues have been major factors in this situation. However, opportunities still remain. As the website Sixth Tone (“Fresh Voices from Today’s China”) reports, “China’s border policies aren’t affecting everyone equally. Jacob Aldaco, commercial director at SmartShanghai, says that middle-aged expats appear to be finding it much easier to enter the country than millennials.
“There are likely two reasons for this, Aldaco says. First, older expats have more work experience and so are more likely to be granted an invitation letter from the Chinese authorities. Second, they usually have the financial resources to afford eye-watering travel and quarantine costs.
‘People in the younger age tiers generally don’t have these advantages,” says Aldaco.’”
- Smart companies are more than a slogan. It’s one thing to talk about the digital transformation, but it’s entirely different to implement these changes. Building a “Smart Company” requires the right infrastructure (technology and ancillary tools) to facilitate this transformation. But having the right people with the right skills to work with this infrastructure is paramount. Implementing a Smart Company policy might require both foreign as well as domestic talent. Engaging a recruiting firm with a global reach and experience in navigating the shoals of government hiring policies might also be considered a Smart Company strategy.
TO SUCCEED IN CHINA: YOUR TALENT STRATEGY
Employer Brand & Trust
Working with an executive search firm with seasoned consultants to represent you and your Employer Value Proposition (EVP) will help your company stand out and attract talent.
Hiring Agile Talent
The selection criteria for tomorrow’s talent could scarcely be more different than the ones used today. Selection based primarily on credentials, skills, and knowledge will no longer suffice. You must come to know your potential hires – who they are and what motivates them. The ability to select the very best people to guide your organization in these turbulent times is the ultimate game-changer for you in China.
Reference: Agile Talent book by Cornerstone Amsterdam‘s Ralf Knegtmans and Cornerstone China’s Simon Wan.