Beijing’s pollution is repelling skilled employees at an alarming rate, according to the American Chamber of Commerce in China's annual business climate survey.
Released earlier this week, the report details how bad air was cited more than any factor, with 58 percent of all respondents saying it hurt their chances of finding and keeping good people.
Next on the list was the high cost of living in Beijing (which you can read more about here).
The survey draws from the chamber's members nationwide, but the largest contingent are in Beijing and Shanghai. Although an American chamber, its findings could be extrapolated to represent the pulse of many foreign businesses in China.
Other bad news in the survey includes a sharp 22 percent decline in China’s status as a major global investment magnet in the past five years. “For many years, more than three-quarters of survey respondents said that China was among their top three priority markets for investment. But the number saying China is a top priority has been dropping since 2012 and has reached a new low of 56 percent.”
The chamber also predicts that 2017 will be a year of sluggish economic growth in China, with only a 6.1 percent GDP uptick forecast. “Consequently, an increasing number of AmCham China members say that the Chinese market, while still important, is no longer their top investment priority,” the report’s authors wrote.
Such a paltry state of affairs has caused investment expansion to drop to its lowest level since 2009, and the report says companies will in turn be conservative with their hiring plans.
However, it's not all bad. In fact, in a twist from what China was like for foreign companies a decade ago, most find China to be more technologically advanced than other markets. Thirty seven percent say China is the global tech leader, or at least amongst the leaders, and 82 percent consider it on par or more advanced than other international markets.
And yet, tech is only taking foreign businesses so far: the Great Firewall has also had a dampening effect on business. More than 90 percent of those surveyed say slow cross-border internet speeds and the inability to access or use certain online tools has negatively affected their company’s competitiveness and operations in China.
Women in the workforce are also an interesting data point in the report. It states: "In China, women represent approximately 17 percent of senior management, on par with the US (~16 percent) and higher than the global average (~14 percent); but women represent only ~9 perecent of board members, significantly lower than the US (~17 perecent) and global average (~15 percent)."
Speaking of women's advancement, or lack thereof, the ever controversial President Donald Trump (who has helped compel many equal rights activist to organize a March on Washington) is also causing a stir with those polled by AmCham China. Seeing as the survey began a mere few days before the votes were counted, those polled by AmCham China were left with a less than optimistic view about bilateral relations in the near future:
"While member companies believe more strongly than ever in the importance of the bilateral relationship, few seem to expect the relationship to improve," the report's authors wrote, adding: "About half expect the relationship to stay the same, and one-third expect that it will deteriorate."
However, there is reason to believe that the 2018 annual AmCham China survey may bear better news. After all, President Xi Jinping spoke at the World Economic Forum in Davos this past week about the need for China and the U.S. to remain in the "hard won" Paris climate accord, while Beijing acting mayor also recently told state media that the city will dedicate 2.7 billion USD to clean up air pollution, using that money to upgrade 2,000 factories, phase out 300,000 high-polluting vehicles and more.
Those efforts could lead to bluer skies and a sunnier outlook for the HR workers polled by AmCham China next year. Such strong action is sorely needed, according to several environmental experts recently interviewed by CNBC-- otherwise, Beijingers might need to wait for "three decades to meet healthy national air quality standards."
That status quo would not only leave the capital with dreary air quality, but also more dismal business findings by AmCham China for years to come.
The chamber's full report is available here.
More stories by this author here.
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