Executive Search in China – 2020 Outlook

Per Capita GDP Reaches Milestone

In 2019, China for the first time reached an average GDP level per capita of USD 10,000 – an impressive milestone for a country with more than 1.4 billion people. Overall, it was a year of decelerating growth, but rising incomes.

In the third quarter of 2019, the Chinese economy expanded at the weakest rate since 1992 and GDP grew 6.0% in annual terms. Despite US tariff wars, overall 2019 remained in line with the government’s target of 6.0% annual GDP growth for 2019. The general consensus for 2020 expects GDP to expand 5.8% to 6.0%.

In order to win during uncertain market developments, understanding the talent trends in China will help organizations to optimize the workforce for greatest results.

Restructuring of the manufacturing sector will continue and there are more frequent layoffs. The trade war between China and the USA has caused many companies to revise their business model and move away from the successful export model from “Made in China & Sold in USA” towards “Made in China & Sold in China & Everywhere”.

Hiring strong local leaders for China’s sales growth is a top priority for many employers. In addition to the Belt and Road initiative promoted by the Chinese government, corporate China will continue expanding overseas in order to:

  • Reduce the risk of tariffs on sales to USA by diversifying manufacturing base;
  • Diversify their business by region; and
  • Transform their business model faster than by organic growth alone.

The Chinese government is committed to eradicating poverty and doubling living standards between 2010 and 2020.  China continues to foster the expansion of middle income group consumers which, given the shopping and travel behaviors of Chinese today, will make China a big player in global trade and tourism.

The Chinese growth continues to shift away from investment and net exports toward consumption and innovation, as evidenced by record retail sales records during the October Golden Week, China International Import Expo (CIIE), and Alibaba’s Singles Day.

Global movement towards digitalization and China’s ambitious lead in this area will make the country’s job market an important component of the country’s top talent trends for 2020.

Automotive Industry

In the automobile industry, the Ministry of Industry & Information Technology released its NEV Development Plan draft stipulating that new energy vehicles make up 25% of auto sales by 2025, up from a previous goal of 20%.  This plan broadly promotes “New Energy Vehicles” which include fully electric, plug-in hybrids and fuel cell vehicles.  In 2019, auto sales dropped 3.6% on last year’s figure.

The trend toward autonomous, connected, electric and shared (ACES) vehicles and technology will continue in China. Tesla delivered the first China-made Model 3 vehicle to the Chinese public on January 7, 2020.  Restructuring in the EV sector will continue and when China ends the EV subsidies, it will be interesting to see the performance of Tesla and other EV manufacturers.


On the Tech scene, the State Office decision to move all foreign electronic hardware and software in their offices is likely to hit tech Mega Firms such as Microsoft, Dell and HP.  Beijing wants this to be carried out in the next three years with 30% of the tech gone in 2020, 50% in 2021 and the final 20% in 2022.

How should organizations adapt in China?

Economic change is driving an increasing need for organizations to adapt quickly to dynamic market conditions in China. 2020 will see more demand for ‘Chief Growth Officer’, a new role in the commercial space that reflects a shift in focus towards understanding market trends and using those trends to drive business growth.

Accordingly, clients will be relying on services of talent providers such as  Cornerstone International Group to look for Game Changers who can improve significantly the business outcome of the China operation. Larger clients are also reducing fixed costs by downsizing RPO and ‘in-house’ talent attraction teams as part of the corporate cost cutting measures.

We expect we shall work closely with our clients in 2020 on a full cycle of talent solutions in China. How companies and their leaders manage change and engage the workforce in the process can significantly impact their ability to achieve strategic business objectives.

Developing an agile organization is an important topic in CEO circles. The rapid digitization and disruption in most industries is placing importance on employees’ aptitude to embrace change and continually upskill their leaders’ capabilities. Learning agility and change management are set to become strong differentiators of top talent in 2020.   The relationship between effective change management and engagement, revealing key drivers and behaviors impacting success are key subjects for China in 2020

As a leader of workforce consulting for many clients in China since 1995, Cornerstone International Group helps you to address the appropriate strategies to achieve positive business outcomes needed in China.

Contact simon-wan@cornerstone-group.com for additional discussions

January 2020