Trends reverse in China-US executive moves
Clues to broader economic performance can be gleaned from all kinds of sources, not just the big numbers outlining trade statistics, GDP data or prospects for annual growth.
One increasingly useful indicator of underlying trends is the record of moves made by business executives taking up assignments around the world. In this respect, the fourth annual International Migration Study compiled by UniGroup Relocation provides some valuable insights. For example, the study of the data for 2013 showed, for the first time in four years, more moves from China to the US than in the opposite direction. Furthermore, there were twice as many moves from the Asia-Pacific region to the US than vice-versa. A similar ratio was seen for moves between Asia-Pacific countries and Britain.
Tracking actual transfers, such information gives an accurate guide to which markets and industries are on the rise and bringing in new talent or, conversely, requiring senior staff to return home or seek greener pastures elsewhere.
While the research is understandably US-centred, given the company’s base and scope of operations, it also reveals some surprising developments and notable shifts in the relative appeal and importance of countries in Asia for expatriate appointments.
More specifically, among all destinations for moves from the US, Hong Kong ranked 14th – up one spot from the previous year – with Germany leading the way, China fourth, Japan seventh, Singapore tenth and Malaysia fifteenth. As a point of comparison, after the US, the study’s top four origin countries for executives transferring to posts in Asia were Britain, Australia, India and France.
Interpreting some of these findings, Pat Baehler, UniGroup Relocation’s global president, notes that the company helps to move more than 260,000 families each year, but does not collect data about a client’s exact position with his or her employer or about specific reasons for a move.
Patterns appear, though, inevitably reflecting themes seen in the global economy. Emerging markets or signs of revival attract talent and experience. Takeovers or large-scale investment in overseas markets entail close supervision by staff sent from corporate headquarters. Political uncertainty or perceived economic instability is usually a signal to retreat from “smaller” markets. And the increase in moves to and from China continues apace as the country’s prospects for both inward and outward investment touch new heights.
“Major companies are expanding where economic growth is happening [and that spurs relocation],” Baehler says. “Technology can enable video conferencing and other means of communication, but large time differences – for example, the 14 hours between the US and China – and cultural nuances still create a need for companies to have [head office] employees based in regions on the other side of the world.”
Because investment in these employees is so significant, and success can depend on acceptance in their new roles, Baehler notes that client companies may now require additional services to smooth the transition process and support settling in. Such services can include cultural familiarisation, language training, property tours, preview trips and advice and help with the search for suitable school places.
“The vast majority of our international moves are paid for by companies relocating their employees, so these factors can be important considerations,” Baehler says. “The migration trends we’ve seen have also informed the decision to expand our presence in Asia and Europe.”
In China, that growth has mainly been in Shanghai, Beijing, Shenzhen, Guangzhou and Chengdu. Elsewhere in Asia, the focus has been on markets such as Tokyo, Manila, Kuala Lumpur, Bangkok and Ho Chi Minh City.
“As a world leader in international finance with more than 1,000 US firms and over 50,000 US residents, Hong Kong will also remain a key destination location for shipments of household goods,” says Michael Stoll, professor and chair of the department of public policy at the University of California, Los Angeles, and an adviser to a UniGroup adviser on aspects of macro-economic development.
“China is already the fourth largest country on the list of export moves from the US and the third largest in terms of shipments [of personal effects] to the US,” Stoll adds. “Although growth has slowed somewhat over the recent period, China is now the world’s second largest economy and the US’s second largest trading partner – in terms of annual monetary value of goods traded – so migration between the two countries will naturally continue to rise.”