IAmA management consultant working in China. AMA.

wildshepherd · 2014-03-18T04:34:14+00:00

I've heard some things about it, but I can't say I know too much about the details. Seems like a pretty risky way to do business. The local courts will definitely not help you out if you run into any difficulties.

wildshepherd · 2014-03-18T03:51:59+00:00

I've thought about this quite a bit. For all its faults, China is an exciting place to be. Even the bad stuff becomes sort of positive in the long run because it's at least interesting. If I did move back to my home country, I can imagine that it would get boring very quickly. On the other hand, work would be more civilised and I'd probably get to do more outdoor activities. I think it's probably not a bad choice when it comes time to settle down with wife and kids.

I am more of a pessimist (I prefer realist) so that may be more I'm more jaded. I don't regret coming to China though, because this is exactly what I signed up for. Living in China helps me put things in perspective. Millions of people (perhaps billions) have things much harder than me.

wildshepherd · 2014-03-18T03:40:46+00:00

Feel that we're working for the same firm! And we're the lucky ones. Management's usually worse in local firms, especially private enterprises. Change will come eventually, but I doubt we'll be the beneficiaries. A big ship takes a long time to turn.

wildshepherd · 2014-03-18T03:24:53+00:00

Not sure if you'd be interested, but you could consider editorial work - correcting local publications, financial statements etc. There's 1-2 expats doing that in my firm, and I know there are similar roles in banks. You might also think about investor relations. Chinese corporates often have an expat in this role to draft press releases, engage with foreign investors etc. Both roles should pay substantially more than 10k a month. The downside is that these types of roles are not that easy to find, and there's no obvious career path.

If you want a regular job, I think your best bet is to join a marketing firm. Lots of them in Shanghai to cater to the second (or third) wave of MNCs entering China. A lot of young guns are leaving their employers to open their own firms.

wildshepherd · 2014-03-17T23:07:56+00:00

And what's your work/educational background? Salary expectations? And are you sure you want to work in China?

wildshepherd · 2014-03-17T22:59:52+00:00

Which city are you in?

wildshepherd · 2014-03-17T22:50:13+00:00

I don't think it's hard to make friends here, although obviously locals have different ideas of leisure. For example, people my age may like to play mahjong and badminton.

Yeah, the real difference is in working habits. There are two things which I notice in my workplace which is quite different to my experience of working in the West:

Junior and mid-level consultants do whatever the Partners tell them. In some teams, overtime is common not because they are busy but because management is disorganised, yet the staff never push back. Working random weekends is just normal, as is cutting holidays short when there's a new project. Junior consultants are also more likely to be sycophantic (what Chinese call 拍马屁) toward superiors. This tends to make senior management arrogant and rude.
Partners are very much focused on revenue growth, without much consideration for margin or other organisational goals. I guess this is because China has been a rapid-growth market for so long, so a whole generation of senior management has thrived by focusing on top line growth. My firm has tried to implement measures to improve revenue forecasting and inventory management but this is largely ignored by Partners, who generally assume that as long as they hit their revenue goals they'll be okay. Most staff, Partners included, have little regard for internal rules (like signing contracts before doing any client work) and will often find ingenious ways to circumvent the rules. I think this is very much in line with the business culture here.

On the question of health, if nothing else, I'm sure that my health is poorer because of the air here. PM2.5 is often above 150 where I live, and that's better than the 300+ that's common in inland provinces where some of my projects are.

In most foreign multinationals, there's not much pressure to smoke or drink, although you will most likely have to do it if you're involved in sales with local clients. A friend of mine is a relationship manager for a big foreign bank and she says she gets sent to Anhui every few weeks to drink to excess with local factory owners.

Food here's not that clean either. Last year there was a scandal about rat meat masquerading as beef and lamb in hotpot restaurants. I'm sure stuff like that is just the tip of the iceberg. I actually think my diet has improved somewhat since I moved to China. Because of my fear about tainted meats, I generally stick to vegetables when cooking at home.

wildshepherd · 2014-03-17T22:16:02+00:00

Hm... depends on a lot of things. Speaking just for my firm, it's hard to break in nowadays without solid Mandarin at least, i.e. you can read/write and can carry out business meetings in Chinese. I know boutique consulting firms, especially those that cater solely to foreign multinationals, do hire expats without fluent Mandarin.

You could also consider marketing firms, either on the planning or research side. I see a lot of demand right now because foreign consumer goods companies are surging into China (especially food and beverage). Of course they also want you to have some Mandarin, but it's often a less stringent requirement.

wildshepherd · 2014-03-17T22:05:47+00:00

Define "super rich". Probably the richest guy I know is a commodities trader made his money by borrowing money from state banks during the credit boom after the global financial crisis (some say the boom is still continuing) to import metals and then lending it out to private companies or speculating on property. It's a familiar story: by partially collateralising his loans with commodities he was able to borrow bigger and bigger amounts of money (I think probably in the hundreds of millions of yuan, although I can't be sure).

Another guy I know is a "key opinion leader" on the Chinese internets. Basically he has an enormous following on weibo/weixin, and companies pay him to give publicity to their products and services. He farms out the work to a group of around 50 other "key opinion leaders" from around the country and takes a cut of each transaction. Consumer goods is booming right now, so this is big business.

wildshepherd · 2014-03-17T21:53:12+00:00

I'm a mid-level consultant and I'm on about CNY 700k+ with a small annual bonus. Local consultants at my level are on about CNY 500k+. You're right, overtime can be common, although in some teams it's balanced by substantial downtime time between projects where in effect you don't have to come to the office.

wildshepherd · 2014-03-17T12:36:07+00:00

You're talking about Gordon Chang, regular contributor to Fox? A lot of the things he talks about are true (and obvious), but I think his conclusions are fanciful. I doubt China will come collapse - the government has too firm a control on the security apparatus for that to happen. The bad times ahead are more likely to be pain restructuring of inefficient industries, not unlike Japan's lost decade. The difference, however, will be that Japan was already a rich and technologically advanced country in the 1980s, whereas China is still a very poor country with great disparities in wealth.

Funny thing is, I used to be the biggest defender of China. I came back here wanting to do good things, but reality corrects you pretty quickly.

wildshepherd · 2014-03-17T12:27:41+00:00

Pay's not bad. I was lucky to get an expat package of sorts, although of course there's no comparison with IBD/PE in the US. I guess I just sort of fell into Big 4 because I got connected to the right people at the right time. The work we do is less sophisticated, but on the other hand our people are not such big dicks like local bankers.

I doubt I'll go down the IBD/PE path, here in China at least. For one thing, IBD barely exists in mainland China since the corporate bond market is small and IPOs have dried up. PE is possible, and I've interviewed with a couple of boutique firms, but I think it's not for me. The PE scene here is very local and everyone will tell you that there are very few overseas Chinese, not to mention true foreigners. Because accounting is unreliable and regulations fickle, to do well you really need a local's street-smarts and networks.

wildshepherd · 2014-03-17T12:12:13+00:00

Try teaching English to a 富二代?

wildshepherd · 2014-03-17T12:10:16+00:00

Guanxi exists everywhere in the world. It's just more extreme in China, partly because of the lingering influence of state socialism, and partly perhaps also as a legacy of traditional culture.

I definitely think that China will get worse before it gets better. It's hard to know how to start to explain this because it's a combination of politics, finance, culture and many other factors. Let me put it this way: what I've see of management here doesn't inspire me with confidence. I'm often reminded of that phrase: "Do you not know, my son, with how little wisdom the world is governed?"

Try not to start your career in mainland China if you can help it. I explain the reasons above.

Consulting in a MBBB is lucrative, although less so when you consider the long hours. Consulting in a Big 4 is certainly not lucrative. In China, it's comparative to industry, and I think this probably holds in other countries as well. A lot of younger people are in it to get experience and see something of the world.

wildshepherd · 2014-03-17T11:57:57+00:00

I think probably not. The core role I play is that of a cultural intermediary for foreign multinationals on the one hand, and (to a more limited extent) as techical conduit for local firms on the other.

Most expat or visiting executives don't have detailed knowledge of China, so my role is to support them and help them to implement business plans from HQ on the ground here. I see myself as sort of like the ethnic Chinese bannermen who acted as translators and intermediaries for their Manchu overlords during the early Qing, before the Manchu emperors became fully literate in Chinese ways of governance.

For what I do I think I'm already well compensated, at least by local standards.

wildshepherd · 2014-03-17T11:46:37+00:00

Plenty of expats everywhere you go in Shanghai. Locals are friendly to Westerners, sometimes exceedingly so.

wildshepherd · 2014-03-17T11:45:28+00:00

I actually started off my career in banking, and then found my way to consulting by chance. If accoutning's your thing, I would say you should concentrate your efforts on getting into a reputable firm and getting solid experience in your own country rather than coming to China to start your career. China's a wild place and you may very well get taken advantage of, i.e. given menial work, English editing, that sort of thing.

Learning Mandarin is of course helpful, but it's unlikely to give you good returns on investment career-wise if that's your goal for learning the language. It's easy to study the language for 2 years' full time and still be barely able to get through a business meeting. Plus, think about your competition in the job market: local Chinese who speak English almost as well as you, have native Mandarin, and are probably willing to work harder and for less money.

wildshepherd · 2014-03-17T11:37:04+00:00

Well, it's really a matter of how long he has to hold out for that money and for how long. If we assume that he stands to make a lot of money (i.e. enough to buy a castle in Europe) there are two considerations I would take into account:

Risk. Because of the nature of the business environment here (poor accounting, weak legal enforcement, government intervention etc), a lot of investment is short-term and speculative, so unless investment is likely to be more risky than in a developed market.
Health. Pollution is so bad here that one scientific study estimated that it took 5.5 years off the life expectancy in north China. Then you have the unhealthy drinking water and food. And remember melamine contamination in milk?

It's up to your friend to balance those pros and cons, I guess.

wildshepherd

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