The landscape for foreign nationals in China — excluding residents of Hong Kong, Macao, and Taiwan — has significantly evolved due to shifting economic demands, the COVID-19 pandemic, and geopolitical factors.

In 2024, foreign talent residing in China is characterized by a marked decline in foreign nationals from developed countries and an increase in individuals from developing nations.

This report is designed to help companies in China analyze and customize their talent strategies, providing insights into the available market talent and aligning these with their organization’s specific stage of maturity and business needs.

The report also offers forward-looking insights to aid strategic decision-making in this evolving environment, drawing on current statistics and recent national census data.

Key Findings

DECLINE IN FOREIGN NATIONALS FROM DEVELOPED WESTERN AND ASIAN COUNTRIES AND INCREASE FROM DEVELOPING ASIAN COUNTRIES.

In 2010, 17% of foreign nationals in China came from the United States, Germany and France; another 33.5 % came from South Korea, Japan, and Singapore. By 2020, these percentages decreased to 8.9% and 12.4%, respectively, and over 52% of the foreign nationals in China were from developing Asian nations Myanmar, Vietnam, and Laos, up from 13% in 2010.

IMPACT OF COVID-19 ON FOREIGN TALENT DISTRIBUTION

The COVID-19 pandemic has had a lasting impact, with a steep decline in foreign nationals in major cities, such as Shanghai, Beijing, and Guangzhou. By 2024, urban centers such as these experienced declines of over 40% in their foreign populations, reshaping foreign labor’s geographic distribution within China.

SHIFT IN FOREIGN WORKFORCE PROFILES

There has been a noticeable change in the types of foreign workers that China attracts, with an increase in lower skilled workers from developing countries and a decrease in high-skill professionals from developed nations. The demand for foreign employees from developed countries with a higher educational degree is at a low point amidst the current localization drive of Western companies in China.

REDUCTION IN COMPENSATION FOR FOREIGN EXECUTIVES

Compensation packages for foreign executives in China have decreased by around 25% from 2014 to 2024, with reductions in allowances for housing, school fees, and flight reimbursements.

EVOLVING PROFILE OF DESIRED FOREIGN EXECUTIVES

In 2024, the ideal profile for foreign executives has shifted to younger candidates, with an MBA that complements their technical background, a growth-oriented mindset, willingness to travel extensively, Mandarin proficiency, and a strong grasp of the Chinese digital media landscape.

CONSIDERATIONS IN HIRING DECISION-MAKING

Since mid-2023, a strong shift from foreign management to local management has been observed. This trend continues to persist and has now reached across small and medium enterprises (SMEs) and into multinationals (MNCs) which see their foreign workforce reduced. Whether foreign or local executives, each option offers unique benefits and challenges, impacting overall strategic alignment, and operational efficiency

Download the report here

Miriam Wickertsheim
China Recruitment - General Manager at Direct HR