Expat entrepreneurs in niche markets do well in China

While expat workers are being forced out of the Chinese marketplace by returning locals, those who’ve identified niche markets and started their own businesses are doing well.

Major Beijing and Shanhai companies are now staffing with Mandarin speakers who’ve spent some years working in the West before returning to the home country. British expat workers can’t compete, and are leaving for other less cosmopolitan, smaller Chinese cities.

However, recently released research has shown that the total of expats working in mainland China has increased over the last 12 months by 18 per cent. The increase is largely due to innovative entrepreneurs introducing Western services and goods to the burgeoning local Chinese market.

According to Steve Carter, MD of headhunter firm Morgan McKinley, China now has enough home-grown expertise to be able to dispense with contract workers from the West, and work permits are increasingly difficult to get. The rise of the start-up expat entrepreneur, he adds, is in response to this trend.

Those with the courage to start their own niche businesses can also avoid the Chinese ‘iron ceiling’ which kicks in just below the senior management level, particularly in Beijing and Shanghai. A local partner is essential, and the blend of local knowledge and contacts with Western innovation and creativity is a winner.

For expats who still want to work in China, focusing on the manpower marketplace in smaller cities is the way forward. It’s still possible to grab a contract with a benefit package for up to four years, although learning Mandarin is considered mandatory.