China and Hong Kong are growing considerably in both popularity as an MBA destination, and in terms of employer demand for MBA graduates.
In fact, the QS Global 200 Business Schools Report 2012 shows no fewer than eight business schools from the region that are valued by international employers for producing highly employable MBA graduates.
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“It helps if [MBA graduates] not only speak English, but understand and recognize international customs and social norms,” says Toby Li, a recruitment consultant at the Shanghai office of human capital consultancy Antal International. He is explaining what kind of factors companies in China are beginning to appreciate in their MBA hires and, he says, ‘international experience’ is becoming increasingly sought-after.
This sounds like good news for Western MBA holders considering a move to China to escape the sovereign debt crises, which came recently only to throw an already-sluggish Western economic recovery into peril. But Mr Li is referring specifically to the international outlook of Chinese, not Western, graduates.
Western financial woes
The Western financial crises have had various effects on the demand for MBA talent in China, and Mr Li’s comments focus on the growing demand in China for MBAs held by Chinese nationals who have studied abroad. To many large Chinese companies, local MBAs with international experience is the best of both worlds, but this is not to say that the opportunities emerging in China are off limits to international talent.
To many in China, the image of the US and the opportunities available there has taken a serious beating as a result of the US-led sub-prime crisis and the more recent downgrade of the country’s credit rating. But it is Europe that comes out worse to a large number of Chinese, who falsely see the continent as almost bust thanks to the ongoing sovereign debt crisis.
But it is not just the Chinese that have low growth expectations of the West and, partly because growth is forecasted to remain low, multinational corporations (MNCs) themselves are also beginning to increase their operations in China: “As the Western crisis deepens, MNCs are increasingly turning their attention to China as a source of growth,” says professor Lydia Price, academic director of the MBA program at the China-Europe International Business School (CEIBS).
MNCs coming to China to expand their businesses, adds Price, means that the blanket demand for MBA holders in China will rise in the near future. MNCs are also more likely to require internationally-educated MBA holders that perhaps reflect the ethos or home country of the company, and will be less likely to be on the lookout for Chinese-only MBA holders. “[Foreign investment into China] is still strong, which brings a need for talent,” Price adds.
Gavin Lu, senior manager of the MBA department at Cheung Kong Graduate Business School, adds that it is not only international companies that are looking to China for growth opportunities as a result of the financial crises, but also the MBA students themselves. “The financial crisis certainly brought new applicants to the MBA program,” he says. “The 2009-10 program saw many more non-Chinese applicants, in particular applicants from the US.”
Lau adds that, during the US-led financial crisis, there were even reports of Western companies freezing their MBA recruitment drives. “Some of our students had jobs initially confirmed, but then had the companies cancel the positions,” he says. “That was a very unique situation... perhaps it has been these kinds of experiences in the West during the financial crises that have encouraged MBA holders to seek out opportunities in China.”
Hong Kong MBA demand from internationals
In Hong Kong, demand for MBA programs seems particularly popular among US and European applicants. Professor Steven DeKrey, senior associate dean and MBA program director at HKUST Business School, says that the past five years have seen huge rises in MBA program applications. “Over the five years between 2005 and 2010, the number of students from North America rose by 114%,” he says. In the same period, the number of Europeans studying at the school rose by 135%.
DeKrey points out though that these signs from the enrollment statistics are likely to be represented in recruitment demand too, saying that the number of MBA positions in China is bound to remain high and rising in the near future. The financial crises in the West led to a significant shift of global wealth eastwards, he notes, and that talent and business is likely to follow that wealth. “China is the world’s second largest economy and 60% of Fortune 500 companies have operations in China. You can see that there are huge opportunities here,” he adds.
The debate is still ongoing, however, over which MBA holders have the best opportunities in China. Indeed there is a rising number of international companies growing their operations in China - as well as an increasing number of MBA students obtaining their degree in the country - but the number of Chinese with similar ambitions, access to high quality MBA programs and, crucially, native language skills, is growing too.
“For some time now, firms in China have preferred to hire MBAs with Mandarin language skills and cultural understanding,” says Price. “Technical competency and business acumen have greatly increased [in China] in recent years, reducing the gap between local talent and expatriates.”
For international students hoping to work in China, perhaps the simplest way of overcoming the cultural gap, and of acquiring language skills is to earn an MBA in China. “We put great emphasis at CEIBS on teaching Mandarin to our international students, and also training the entire student body in cultural integration, cross cultural communication and China knowledge,” adds Price.
International expansion
However, the growth in China is a two-headed dragon. Not only are international companies moving in, and increasing demand for MBA holders within China’s borders but Chinese companies too are getting wealthier, and are aiming at international expansion.
These companies need highly-educated businesspeople that have the right to live and work in the company’s target country, and perhaps more importantly, they will be looking for MBA holders who have a knowledge of international management tactics.
There are many different examples that point to the varying trends in China, Lu explains. “Before about 2006 Intel hired a large batch of MBA holders here, and they were mainly American MBA holders. Now,” he says, “they tend to hire local MBA holders because the level of education is no different but those who study here have better knowledge of the local market.”
He adds, however, that all of the international MBA students at Cheung Kong Graduate Business School found positions in China after graduating.
Certainly it seems the most talked-about hiring trend at present is the battle for MBA positions between internationally-educated MBA holders and those who attend graduate school in China, as well as tackle Mandarin Chinese. But another, more positive and commonly-accepted trend is that, as long as graduates keep an eye on growth in the East they will be facing in the right direction.
Those willing to relocate can still find opportunities with MNCs and perhaps even local companies in China; and those who prefer to remain in their home countries should be on the lookout for local companies being snapped up by newly rich Chinese businesses, stretching their legs abroad and on the lookout for international talent.
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