Larry Wang has a tendency not to let people finish their sentences - a condition he may have developed from 14 years of cold-calling potential candidates, enticing them to leave their jobs and work in the fastest growing economy in the world. "Our industry was built on cold-calling," Wang explains.

"China was once seen as the hardship post. The word expat was synonymous with premium, and to work here, people would expect a compensation package - free schooling for their children and maybe a villa at the edge of the city," says the 49-year-old headhunter while sipping coffee inside a Starbucks caf in Soho, Beijing.

The American-born Chinese is managing director of Wang & Li, a recruitment company that matches candidates with multi-national firms in China.

He says the deepening financial crisis is turning "expat" into a dirty word in the world of management speak.

"Before, even at a managerial level, there would be the need for an expat. Now around 97 percent of the positions have been localized. Before, maybe 100 percent of those at director level were expats. Now it's just 30 percent," he says.

Fifty percent of Wang's clients have started corporate-wide hiring freezes as they assess the impact of the global slowdown. What started as a banking crisis is quickly seeping into industries far and wide. But the impact on China is unique, Wang says.

Industries in China that rely on exports are being hit by the slowdown, but many multi-national firms are still witnessing high levels of growth.

The hiring freeze is caused by caution rather than full-blown crisis, like in the West.

"China still represents dry land," he says. "I believe expats will need to be increasingly more flexible in terms of the type of opportunities, companies, and salaries that they consider as multi-nationals look to control cost in their organization in many areas during this crisis.

"Although the value that many overseas professionals can offer in this market is still substantial, that value will need to be demonstrated on a more hands-on level and will not be priced at the same premium as the expat packages that they were originally brought out here on." To recruiters such as Wang, "expatriate" does not simply mean a foreigner, but instead, a way of life, made up of a lucrative package and a living-away-from-home allowance.

Wang says potential international employees are now willing to work in China for packages, which match their current ones in their home markets.

"The financial crisis has shone a light on localization," he says.

Expats are not only being replaced by their local equivalents but expat packages are more closely resembling local pay packets and privileges.

And it's a growing trend, he says.

"Packages are being reduced," they now match regional expat packages or high-end local ones, Wang says.

"The absolute number of expats is maybe the same as in the past. But in percentage-points terms, expats are definitely a lot lower."

Wang is confident that measures companies have taken to freeze new positions will pass in China and is equally confident the impact of the slowdown will be limited.

While Beijing and Shanghai have not been hit like London or New York, he claims these markets for expats are becoming more similar.

"No one talks about expats in New York or in London," Wang says. "If you work in one of those cities you are just thankful for an opportunity to work abroad. They are not considered expats and China is becoming the same.

"China is still the highest growth market so it does mean that opportunities will still come more quickly here."

(China Daily  December 9, 2008)