INSIDE BUSINESS : Managers face cultural wall of China

Senior managers from the West attracted by the excitement of working in China are facing competition for the best jobs from their Asian counterparts, according to a report by Price Waterhouse, the accountants and management consultants.

The report, published last month, says many companies rate highly an ability to speak Mandarin and understand the Chinese culture, and some show a preference for expatriates of Chinese descent - primarily for their language skills.

However, Price Waterhouse International Assignment Services advises strongly against recruiting personnel on the strength of nationality alone, although previous relevant experience, preferably in Asia, and cultural sensitivity are important qualities.

The report, Managing Expatriates in China, claims to be one of the most detailed surveys ever undertaken on the pay and conditions of expatriates working in China. It combines the results of questionnaires completed by more than 80 multinational companies employing 1,500 people in China with the findings of interviews with individuals working there.

The expatriates interviewed tend to agree that it is essential to learn the basics of the language - Price Waterhouse recommends that Mandarin lessons start before departure. The firm also advises that companies consider sending the individual on a business-oriented cultural training course. As one expatriate said: "Persuading the Chinese to do something is an art, but it's not so much of a mystery that it can't be learnt."

But the firm warns Western expatriates seeking to transfer "a robust and direct negotiating style" that they may find such an approach unacceptable in China. Westerners have to be aware of the importance of the issue of losing face and hence of the need to avoid confrontations that may be taken personally.

The report also deals with serious personal issues facing expatriates and their families. These factors assume such importance in establishing China as a "hardship posting" that in some cases the costs of employing expatriates in China are equivalent to 200 per cent of an individual's initial basic salary.

The costs reflect the difficulties of finding reasonable accommodation, schooling and medical care, particularly outside the main business centres of Peking and Shanghai. Pollution is also cited as a critical problem for expatriate families, while many spouses encounter feelings of isolation exacerbated by the long hours that employees often have to work.

Despite the problems, many expatriates find China - which enjoys year-on-year economic growth of 13 per cent - an exciting environment in which towork. "China is new, it's fun; a week goes by in a flash," said one.

Chinese authorities believe that there are more than 7,000 foreign enterprises and more than 100,000 Western expatriates in Peking alone.