Officials in China have revealed that they will be implementing a five-year plan that is aimed at attracting the foreign talent that can assist the city to become one of the world’s biggest financial hubs.
The five-year plan, which will see foreign recruitment surge by up to 40%, is underpinned by China’s desire to create a financial entity that can compete with the likes of New York, London and Hong Kong. However, to date, many of the efforts they have made to increase their attractiveness as a financial hub have fallen flat as a result of their inability to find the skilled financial professionals that they need to make the initiative a success.
The “five-year plan for human resources development in Shanghai’s financial sector” that was released on Monday seeks to address the imbalance through the recruitment of 90,000 financial services employees, 70% of whom will be required to have a minimum of a BA degree and 15% of whom will have a masters. If the recruitment drive is successful, by 2015 there could be over 320,000 people employed in the financial service sector in China.
The plan details the actions that will be implemented in order to lure the expatriates. These include improved medical systems, social insurance policies and education provisions.
Talking to UK newspaper The Telegraph, expatriate William Vanbergen who an education company in China, commented: “If it has been decreed by the government it will probably get done.
“As China drives towards an economy fuelled by domestic consumption, then they will have the opportunity to put in place huge incentives to make things work for firms that are keeping the money onshore.
“Logistically, Hong Kong was the gateway to China but now China is open, it’s almost superfluous and only has the advantage of the legal system left over from the UK.”
However, not everyone is in agreement with this opinion. Including Vanderbergen’s chief operating officer, Tim Collins, who currently lives in Singapore but travels frequently to China for work purposes. He also gave his opinion to The Telegraph: “The taxes are a big deterrent to me – that, and the looming social insurance payments, that’s a big turn-off. As long as China has this, finance people and corporations will prefer to commute in and out of Hong Kong and Singapore rather than being slapped with punitive taxes.”
He is not the only skeptic. Many people have pointed out that the extent to which the plans can be successful will depend upon China’s ability to attract foreign talent. Both the current tax rate, with an upper-tier rate as high as 45%, and China’s new social welfare policies for expatriates may act as deterrents for many would-be financial sector workers from abroad. However, Shanghai’s authorities have long been considering preferential income tax policies of 25 per cent maximum for financial professionals and this may now present them with an opportunity to change the rules.
What do you think? Are you a financial services professional? Would you consider working in Shanghai? Leave a comment and let us know.
