Chinese companies like Lenovo have been doing significantly better over the past three years
Shen Jianyuan

BEIJING Winter has come to the capital, and Wang Jie (a pseudonym) feels particularly cold. The multinational communication equipment company where he’s worked for 20 years has just announced widespread layoffs in the marketing, sales and service departments. Wang’s name was on the list.

When he joined the firm in 1994, he was part of the first batch of Chinese university graduates majoring in telecommunications. Like many of his classmates, he’d originally planned to go abroad for further study, but was persuaded to stay home by all the multinationals recruiting Chinese staff at high wages.

Not only was his first monthly salary — 3000 RMB ($495) — considered a very generous one at the time, he also climbed the ladder quite rapidly, moving from a technical support engineer to manager for the pre-sales technical service. Meanwhile, his company’s China branch also grew from a dozen of workers to nearly 60,000 today.

The cold wind blows

The downturn started three years ago. In the second-tier city where he is responsible, profits have continued to fall.

“The company has comprehensive compensation algorithms, and has agreed to give me a generous package,” Wang says. “It’s the psychological shock that is hard for me to take.”

Over the past two decades workers such as Wang Jie represented the symbol of an era. They had injected Chinese-style vitality into the foreign companies based here, while also introducing Western technology and vigorous management into China.

But more and more multinationals are now downsizing their Chinese operations. Some of them lay off the staff of an entire department, while others fire people a few at a time every week so as to spark less public attention.

Motorola laid off more than 700 Chinese staff in 2012. Nokia had announced total cuts of 10,000 people worldwide through 2013, of which a high percentage were Chinese workers.

Meanwhile, Chinese employees at IBM, which itself may lay off up to 8,000 this year, complain that while the workload has grown heavier, benefits have been reduced.

It used to be cool in China to be able to say you worked for a foreign company. Now that halo is replaced by a sense of helplessness.

A month ago, Lin was fired by Hewlett-Packard China. “After only 20 minutes of an individual meeting, and despite my years of service in this company,” he said. The American company’s layoff news brought quite a shock to China’s IT industry. Though not confirmed by Hewlett-Packard, an insider said the layoff affects around 20% of the company’s China workers.

Compared with Lin’s situation, Wang Jie’s superiors took a much more human approach. They tried hard to make the painful process of his exit as transparent and friendly as possible, even if he still feels bitter.

Where to go?

Moving from a foreign company to a Chinese one can be a rude shock. Take Chen, who used to work for IBM as a sales manager, where sharp suits, five-star hotels and leisure were a given.

“IBM was always behind me,” he recalls. “Anytime we couldn’t quite convince the potential customer, I just called and our foreign service support specialist would be right there. The company provided incredible resources.” Now working for a Chinese company, “to get any customer, I have to deal with everything all by myself,” he complains.

It’s undeniable that multinationals are at least 10 years ahead of Chinese enterprises in technology and services, and in particular at the core technology level. There is no sign yet that Chinese firms will overtake the multinationals in China in the near future.

But multinationals also have their limits. “The multinational leaves too little flexible control for their Chinese workers,” a business executive notes.

He cites the example of Yao, a mid-level manager who used to work for Motorola before joining Lenovo, China’s top computer maker, where he did not last long before being fired. “In general, Chinese staff who worked for multinationals only have to follow the directions of what is designated at headquarters,” the source notes. These local workers don't have the experience following the entire process of a project, including budgeting and execution.

This comparison is confirmed by another technical worker who had stints for both SAP and IBM. “In the multinationals, a worker tends to learn only the one thing in his post. They don’t provide local workers the chance of raising their self-worth,” he explains. “This is probably a major disadvantage that multinationals are facing in China.”

For those Chinese IT geeks who are recharting their career path, hanging on with foreign companies risks turning into a dead end. According to a survey conducted by Lenovo, younger Chinese people no longer see foreign companies as their first choice. Even though Microsoft China offers a 30-40% higher salary, many of these recent graduates say they’ll choose to work for a company like Lenovo.

Zhu Shaokang is one of those who chose to leave his multinational job when it was still early enough to switch career paths. As the general manager for the cloud computer and mobile Internet business services of IBM Greater China, he suprised those around him when he left a seemingly plum job for his age.

“I realized that when my team and I were in contact with all walks of life, even those who are looked down upon as provincial, I found my world of champagne and speaking in English is so out of touch with the pulse of Chinese clients.”

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Why Chinese Cities Waste Millions On Vanity Building Projects

The so-called "White Elephants," or massive building projects that go unused, keep going up across China as local officials mix vanity and a misdirected attempt to attract business and tourists. A perfect example the 58-meter, $230 million statue of Guan Yu, a beloved military figure from the Third Century, that nobody seems interested in visiting.

Statue of Guan Yu in Jingzhou Park, China

Chen Zhe

BEIJING — The Chinese Ministry of Housing and Urban-Rural Development recently ordered the relocation of a giant statue in Jingzhou, in the central province of Hubei. The 58-meter, 1,200-ton statue depicts Guan Yu, a widely worshipped military figure from the Eastern Han Dynasty in the Third century A.D.

The government said it ordered the removal because the towering presence "ruins the character and culture of Jingzhou as a historic city," and is "vain and wasteful." The relocation project wound up costing the taxpayers approximately ¥300 million ($46 million).

Huge monuments as "intellectual property" for a city

In recent years local authorities in China have often raced to create what is euphemistically dubbed IP (intellectual property), in the form of a signature building in their city. But by now, we have often seen negative consequences of such projects, which evolved from luxurious government offices to skyscrapers for businesses and residences. And now, it is the construction of cultural landmarks. Some of these "white elephant" projects, even if they reach the scale of the Guan Yu statue, or do not necessarily violate any regulations, are a real problem for society.

It doesn't take much to be able to differentiate between a project constructed to score political points and a project destined for the people's benefit. You can see right away when construction projects neglect the physical conditions of their location. The over the top government buildings, which for numerous years mushroomed in many corners of China, even in the poorest regional cities, are the most obvious examples.

Homebuyers looking at models of apartment buildings in Shanghai, China — Photo: Imaginechina/ZUMA

Guan Yu transformed into White Elephant

A project truly catering to people's benefit would address their most urgent needs and would be systematically conceived of and designed to play a practical role. Unfortunately, due to a dearth of true creativity, too many cities' expression of their rich cultural heritage is reduced to just building peculiar cultural landmarks. The statue of Guan Yu in Jingzhou is a perfect example.

Long ago Jinzhou was a strategic hub linking the North and the South of China. But its development has lagged behind coastal cities since the launch of economic reform a generation ago.

This is why the city's policymakers came up with the idea of using the place's most popular and glorified personality, Guan Yu (who some refer to as Guan Gong). He is portrayed in the 14th-century Chinese classic "The Romance of the Three Kingdoms" as a righteous and loyal warrior. With the aim of luring tourists, the city leaders decided to use him to create the city's core attraction, their own IP.

Opened in June 2016, the park hosting the statue comprises a surface of 228 acres. In total it cost ¥1.5 billion ($232 million) to build; the statue alone was ¥173 million ($27 million). Alas, since the park opened its doors more than four years ago, the revenue to date is a mere ¥13 million ($2 million). This was definitely not a cost-effective investment and obviously functions neither as a city icon nor a cultural tourism brand as the city authorities had hoped.

China's blind pursuit of skyscrapers

Some may point out the many landmarks hyped on social media precisely because they are peculiar, big or even ugly. However, this kind of attention will not last and is definitely not a responsible or sustainable concept. There is surely no lack of local politicians who will contend for attention by coming up with huge, strange constructions. For those who can't find a representative figure, why not build a 40-meter tall potato in Dingxi, Gansu Province, a 50-meter peony in Luoyang, Shanxi Province, and maybe a 60-meter green onion in Zhangqiu, Shandong Province?

It is to stop this blind pursuit of skyscrapers and useless buildings that, early this month, the Ministry of Housing and Urban-Rural Development issued a new regulation to avoid local authorities' deviation from people's real necessities, ridiculous wasted costs and over-consumption of energy.

I hope those responsible for the creation of a city's attractiveness will not simply go for visual impact, but instead create something that inspires people's intelligence, sustains admiration and keeps them coming back for more.

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