Chinese investment bankers who carved a career in an international investment bank during the boom years are increasingly moving to local institutions and having to deal with a “reverse culture shock” as they reacquaint themselves with regional corporate culture.
The thing to do for top Chinese graduates coming out of top Western universities ten years’ ago was to gravitate towards a top international investment banking ‘brand’. Now, faced with dwindling business and career stagnation, the trend has been to shift into local institutions.
While bulge bracket banks shrink, Chinese banks are going global and they need employees who can combine experience in international markets with an understanding of Chinese culture. There’s just one problem – they’ve been away for so long, they’ve forgotten the Chinese way of doing things.
The surprise is that although global investment banks are intensely political places to work, Chinese banks are worst.
You need to choose your manager carefully. There’s always some element of sectarianism in banking teams, but loyalty to your superiors is amplified in Chinese banks. “It’s very important that you follow the right boss,” says one veteran banker who has worked for both Western and Chinese banks. “It’s like the factions you read about in kung fu novels.”
“The internal relationships are much simpler in Western banks,” agrees another Chinese banker.
The veteran banker cites the example of the “big bosses” visiting the overseas operations of a large Chinese bank. “It was like a 24-hour company,” he complains. Many staff had to participate in every event – even picking up the executives from the airport. Then they had to attend client meetings, social events and late night entertainment, regardless of the hour.
“In Western banks, a few people take care of everything when the bosses visit,” says the banker.
Global investment banks would argue that they (now) take behavioural factors into consideration when calculating annual bonus payments, but the reality is that money talks. "How much have you earned for the bank? Once you reach that target, you get a bonus, it’s very professional," says one trader at a Chinese bank.
It’s less straightforward at Chinese banks. For a start, employees can receive cash bonuses on their birthdays and other occasions like weddings, funerals or Chinese festival days. But there are also softer performance factors at play.
This trader, who used to work at a big Chinese bank, said that once he was promoted to director level, his job became less about making money on markets and more about meetings. Not only with clients, but also internal meetings that has nothing to do with trading. He was also spending a lot of time studying. Interestingly, this didn’t affect his bonus at all because at his level, these were factored into his annual performance.
Once you prove yourself as a trader at Chinese banks, you are promoted and it’s no longer purely about bringing in the numbers. “In Western banks I used to see traders who are over 50, but still very passionate about the job and able to make huge sums of money," he says, "But in Chinese banks, you will be promoted to a level with a lot of admin responsibilities. You then spend less time on trading and more time on management. It's a pity, but you have to follow this route if you want to advance your career and income. It's very unlikely you will be purely a trader after 50 if you are successful."
Brashness is respected in US investment banks in particular. Suck up to the right people, but anyone on the same level is fair game for direct conversations. Trying this approach in Chinese banks will get you nowhere.
"In Western banks, people talk to each other in a direct way, and they focus on the key issues," comments one Chinese banker. "But in Chinese banks, people don't speak straightforwardly. They equivocate, dropping a lot of hints, trying to make you guess what he's driving at."
Part of this is down to the complex and long-standing ‘face’ culture in China. Taking the direct approach could result in others losing face. This is unadvisable, both for the sake of a ‘united’ team and being able to progress your career or secure a big bonus.
That and the complex factions in the bank. "It simply helps to think before speaking," sighs one Chinese banker.