Expats head to greener pastures

Foreign companies are sending more of their senior managers to China's smaller cities where markets are thriving

As foreign companies search for new markets in China's tier-two and tier-three cities, more expat senior managers are being asked to leave the bright lights of Beijing and Shanghai to work in places they are not fully familiar with.

Foreign companies are keen to assign experienced expats to new branches in the smaller cities to help in building foreign-standard management structures, some human resources consultants say.

Andreas Bukenberger, a 43-year old German, was sent to Chengdu, Sichuan province, to be the general manager of Siemens Electronics Works Chengdu. He moved there with his family in June 2012.

Siemens signed an investment agreement with Chengdu High-Tech Development Zone in October 2011 to establish a manufacturing and research and development center for industrial automation products in the city.

"It is Siemens' first such factory in China and we needed to send core people from Germany (to set it up)," Bukenberger says.

The factory, which will start operating in September, is the sister factory to one in Amberg, Germany. The new factory will ensure that its three main activities - enterprise management, product R&D and manufacturing -will be closely integrated, Siemens says.

According to Bukenberger, nine other Germans work in the factory as either managers or experts.

He says the company wants to hire more local people, but the new factory will still need experienced employees to ensure it follows the company's globally standardized working procedures.

International companies will always need to keep key foreign experts in the major cities where they are based, but sending foreigners to smaller cities will become more common, he says.

Some human resources consultants have noticed a correlation between international companies localizing their managers and increasing demand for foreign staff in China.

Over the past five years, the trend for foreign companies to localize their expats in China's smaller cities has increased as more businesses have realized that China offers them the best opportunity to make good profits on their investments, says James Darlington, head of Asia at Antal International, a British recruitment and training consultancy.

"International companies have invested more capital and human resources in China in the past few years because they realize that the market there is still growing while markets in other countries are stagnating," he says.

This trend has occurred in almost every industry, but it is more obvious in some sectors.

"Industries in which there is less local experience are going to see more expats; for example: chemical, tech, healthcare and green technologies," says Jonathan Edwards, a partner at Antal International (Shanghai).

He says the trend will be that industries that have factories in smaller cities will send their executives there.

To better meet their clients' requirements to deal directly with senior executives all over the country, Antal has already placed 25 percent of its expats in smaller cities, although it still needs most of its foreigners in tier-one cities, where its main offices are located, Edwards says.