China stock market jitters: keep calm and carry on

Despite global concerns about the Chinese economy, the recruitment sector in the country has yet to suffer any material impact. Candidates in China’s financial sector should keep a close eye on trends within the financial sector, as the sector looks set to rapidly expand during the coming years. Candidates should also closely monitor the financial health of the employers they are applying to.

China economic growth: a bump in the road

There has been a lot of coverage in the Western media about the Chinese financial markets crash and the risk of a dramatic fall in China’s economic growth rate. Local reports have not displayed the same levels of anxiety, although coverage in the Chinese media is also increasing, leading to more people feeling concerned. For many observers what we are witnessing is just a bump in the road of China’s growth journey.

“The underlying story for Asia, including China, remains one of relatively rapid economic growth. Concerns about China’s slowing economy need to be balanced against the fact that the country’s services sector, including financial services, has now become its engine of growth,” notes Duncan Innes-Ker, Regional Editor for Asia at The Economist Intelligence Unit. “While we expect a marked slowdown in China’s financial sector in the second half of the year, reflecting the stock market crash and its aftermath, the medium term picture remains very positive.

“China’s financial system is relatively straightforward and under-developed compared with the country’s needs. Moreover, there is still strong demand among foreign investors for greater exposure to Chinese assets. These suggest that, this year’s gyrations aside, the Chinese financial sector will expand strongly in the coming years.”

Naturally, such expansion provides candidates from outside of the region with a potentially rich source of jobs and contracts.

China remains attractive to investors and candidates

The Organisation for Economic Cooperation and Development (OECD), has cut its GDP growth forecast for China to 6.7% in 2015, compared to 7.3% last year, and to 6.5% for next year. Put into a global context, that remains a much higher rate of economic growth than many developing economies, making careers in China an attractive prospect for both expats and local candidates.

“Through the rest of Asia, relatively rapid economic growth and the ongoing development of financial services offer a good platform for further employment growth in the sector. However, in the short term the increase in risk aversion among global investors, linked to the China slowdown and the prospective rise in US interest rates, will weigh on Asian financial markets, dampening financial sector job prospects,” says Duncan.

More due diligence required when looking at new employers

Although I am yet to witness a softening in demand from our perspective, I have noticed a very subtle change in local candidates’ attitudes. Chinese candidates are now paying more attention to the media. In the past, their prime consideration when looking at a position was salary, as they were able to assume that the companies they joined would carry on growing and expanding.

They are now paying more attention to job security and stability. I think this is a good idea. In the current macroeconomic climate, candidates should do their due diligence and consider the financial situations of their employers and consider whether they have a strong platform for growth.

Outlook: cautiously optimistic

Duncan believes that financial hiring in China is likely to be very strong in the coming years: “The emergence of the regional government bond market offers some particularly exciting opportunities. Nonetheless, there is likely to have been an inevitable short-term retrenchment in equities trading positions as a result of the market slump.”

I also see demand remaining strong for experienced candidates in the financial sector, especially in all the subsets of regulatory change and governance: risk, compliance, anti-trust, anti-bribery and anti-money laundering. This is why I remain cautiously optimistic. However, the few months ahead of us will be key.

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Author

Simon Lance

Managing Director, Hays Greater China

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Simon has over 14 years consulting and management experience within the professional recruitment industry in UK, Australia and China. Simon was appointed as Regional Director, China in January 2012 and is currently the Managing Director of Greater China, responsible for the operational management and expansion of Hays offices in Shanghai, Beijing, Suzhou, Guangzhou, Shenzhen and Hong Kong.

Prior to his current position as Managing Director of Hays Greater China, Simon spent 8 years with Hays Australia, progressing through various levels of promotion to assume overall management of businesses in both Western Australia and the Northern Territory. Simon’s management experience includes developing market-leading teams within a range of technical, financial, corporate and executive disciplines. He also maintains a strong personal interest in the infrastructure, engineering and energy industries. He graduated from the University of Western Australia (BSc) and has attended management development programs through both Hays and external institutions.