The War for Talent in China Essay

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THE WAR FOR TALENT IN CHINA by Jan De Silva Global Business | September / October 2012 In North America and Europe workers are begging for jobs. In China companies are begging for workers. How can this be? How can a country of 1.3 billion people, with a slowing economy, be facing a shortage of workers? In fact, China’s demographics and China’s role as the factory to the world are changing. In a 2010 manufacturing competitiveness study[i] released by Booz & Co., nearly 83 per cent of companies said their primary motive for locating manufacturing in China was to access the Chinese consumer market. And this year, 32 per cent of companies reported[ii] they were importing completed goods from North America to distribute in China. Let’s be clear: China is important as a hub for exports. But, China as a manufacturing base is no longer “Cheap China”. China is moving up the value-chain, and has been for several years. And with this movement, salaries have been rising and the world’s largest middle class consumer market has been created. So, what’s this about China as a marketplace? At GM, foreign markets account for 75 per cent of sales and China has been GM’s largest market since 2010. In August, GM had another record month of sales in China, on the heels of record year-to-date sales. The Four Seasons opened its fifth China hotel last month and has 10 more under development, which, upon completion, will be equivalent to 50 per cent of their total U.S. portfolio. Yum Brands’ KFC and Pizza Hut restaurants saw 50 per cent of 2011 operating profit come from China compared with 32 per cent from the U.S. Chinese consumers are replacing business lost in Europe. Armani’s 23 per cent operating profit growth in 2011 was driven by China where sales were up 45 per cent – three times the total company average. Scott Price, CEO of Wal-Mart Asia, phrased it best saying: “When a car
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