For years, Greater China has been the growth magnet for investment banks of the world. Global investment banks and their subsidiaries and joint ventures have been present in the country for at least a decade, and China was where it was all supposed to be happening.
This summer’s stock market rout has changed some of that. Lloyd Blankfein said in September that he wouldn’t invest in China “right now” and that the Chinese government lacked experience in “market stuff” J.P. Morgan CEO Jamie Dimon said earlier last week that China has “huge issues” – although cautioned against “freaking out.” Morgan Stanley chief executive James Gorman blamed China for the bank's poor third quarter, saying that the volatility in China was "almost historic."
So, how should you play it if you’re an ambitious young Chinese who wants to build your banking career? Should you leave the country to pursue a career elsewhere beyond the border, or should you stay put?
The case for staying in China:
1. Abundant job opportunities
China's financial sector is undergoing rapid growth and development. As a result, it's creating a lot more job opportunities. So far this year, Chinese banks have surpassed global banks in terms of the revenues earned. And in the job market, they are continuing to hire despite the problems in the Chinese markets. On the contrary, global banks have been shrinking their headcounts.
Jennifer Yuan, a Beijing-based consultant from the search firm Signature Search, says there's no need to move abroad: "People are upbeat about the opportunities in China."
2. Be with your family
Moving abroad is easiest when you're young and single. If you’ve already got a family, moving is more complicated. “I’ve seen a few cases where senior bankers who've moved to the West have divorced,” says a junior Chinese banker who currently works in Hong Kong.
3. The outside world may not be for you
You may think you want to quit China for London or New York, but do you really? The working conditions in both cities can be harsh.
The case for leaving China:
1. Higher salaries
Although Mainland has been playing the catching-up game in the past decade, its salary level is still relatively lower than mature global financial centres like London or New York. Pay is higher in Hong Kong too. Duncan Kennedy, head of Hong Kong and China for search firm Selby Jennings, says wages in Hong Kong are likely to remain above those in China for "five or six years." Taxes are much lower in Hong Kong too...
2. Gaining experience overseas
Working abroad for a few years, especially at one of the global financial centres, is good for your career. When Standard Chartered did some research into the kinds of people who got senior promotions in its investment banks a few years ago, it found they were typically people with international experience. “Most of the young bankers I've met are keen to take up international opportunities,” says Lesley Li, founder of Shanghai-based Matrix Search, an executive search firm.
3. The high life abroad
Asian cities like Hong Kong are particularly popular with adventurous young, male bankers. "Hong Kong is mostly attractive to single bankers who like to travel and party, " Li of Matrix suggests.
But just don’t stay too long...
Once you are abroad, how long do you plan to stay there? Li thinks it's helpful for Chinese young bankers to work for a few years abroad, but in the long run, "everyone is rushing to China because opportunities are here," she says, "and ultimately you need to build your networks here too."