Localizing in China - A Sign of the Times?
I recently had a coworker from the US localize in China. He is the first in our organization - someone from the US who decided that he would benefit more by quitting the US organization and hiring into the China organization (he technically had to quit/rehire as they are separate entities).
This is even bigger than it sounds - instead of being paid the typical US salary in USD with an expense account for overseas expenses, he has opted to get hired at a local salary in RMB with a local benefits package. I don't know for sure, but I believe he probably took about a 15-20% pay cut based on what I know.
Why Would Someone Localize to China?
He did this for 1) the job opportunity and 2) he believes he can save more money here than working back in the US.
Technically I agree he could save a lot of money here - he would be getting very well compensated compared to our local peers and if he can adjust his lifestyle expenses to everyone else's, he should be able to save a higher percentage of his salary.
However, from my viewpoint, adjusting his lifestyle here in China would be a lot more difficult than adjusting your lifestyle expenses back in the US. Here is some of the things coming to mind.
- Language Barrier - neither of us speak Mandarin very well. To adjust his expenses he would need to be semi-fluent in the language or it will cost him.
- Race - neither of us are of Asian descent. We stand out in China - its harder to negotiate and pay normal prices when you look like a foreigner.
- Standard of Living - Living standards are different here. Cars are a luxury (however they are quickly becoming affordable for many), the quality of foods and products is different, and there are quality of life differences - parks, entertainment options, air quality are not the same.
- Food Diet - The typical diet here is obviously different from our western fare. Western food is more expensive - sometimes double the price in the US for equivalent food. To adjust to local lifestyle expenses he needs to adjust his diet to 100% Chinese and only eat western food on special occasions. Probably the easiest adjustment for him to make, but for some (like me) this could be a huge challenge.
- Health-care - Big differences in the health care systems. He would have medical coverage benefits, but he would have to rely on the local healthcare system. This is probably the riskiest part - if he got a serious injury or illness he would be relying on the local healthcare system for care. Its unclear what happens if he needs care in the US.
- Retirement - While not as big a concern, but he won't be contributing to Social Security and he won't be eligible for a 401k.
My co-worker is definitely not crazy; he is young, healthy, and sees enough opportunity that could pay off in a few years. Time will tell if this will be successful for him. He isn't the only one here who has done this - my wife and I just met a young newly-married couple that just relocated and localized here from the US a couple months ago.
There are too many pitfalls here that I wouldn't touch this at this point in my life. However this may be a sign of the coming times - maybe the US will no longer considered the land of opportunity.
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