Localization policies in China recently came into the spotlight of foreign media due to a recent article published by the Wall Street Journal called Twice As Many Expats Leaving China Than Arriving.
This article is based on a survey conducted by a relocation firm and according to the company’s customer data, twice as many people moved out of China than into the country in 2014.
The localization strategy is not new to China's foreign invested enterprises. According to its supporters, it helps gain more trust from the local country, where its subsidiary lies in, which further remarkably improves the compromise of the multinational enterprise and the local market. It will also reduce the HR cost, at the same time, guarantee the relative stability of the management staff to some extent, and improve their working efficiency. It is also beneficial to help the multinational cooperations to get familiar with the market situation of the local country so as to expand its market space.
However, is the localization strategy ideal? To what extent? Are there any negative effects on MNCs’ long-term strategy by employing more and more locals in management positions? With these questions in mind, the European Chamber organized a debate in Beijing by bringing HR experts and HR directors from MNCs to share their views, advantages, and disadvantage of the localization.
Among the speakers were Swee Seng Lee, Head of HR in ABB Greater China, Sunny Zhang, Regional HR Manager, Greater China, DNV GL - Oil & Gas and Jürgen Czajor, HR Director, Daimler Greater China. Our executive search team from our Beijing office participated in the debate to follow up on the latest management localization trends in China.