However, MNCs insist on their skim-the-cream policy, and more graduates are naturally turning to local firms.

Problems also exist with senior Chinese executives working for MNCs. Over the past five to eight years, many MNCs headquarters tightened the decision-making power of its China executives. More than a few Chinese executives now almost appear as nothing more than spokespeople for their companies.

Jiang: I don't quite agree with claims about the so-called glass-ceiling effect. Today many MNCs appoint Chinese people to serve as their China executives, and some can even enter the top executive team at the headquarters, though those numbers fairly limited. And some local companies can be very hierarchical and have their own glass ceilings.

GT: Does the lack of entrepreneurial culture hurt local companies?

Jiang: I think so. I talk to managerial candidates almost every day, and many Chinese-born managers in other countries would love to return and get better opportunities for their career. But according to my observation, the longer a Chinese employee works for a foreign company, the less he might be accustomed to the local business culture.

Chinese companies may have some advantages in attracting local talent, but they are very weak in competing for global talent due to the differences in corporate culture and the managerial system.

Today more than a few Chinese companies have branches abroad, but their localization in foreign markets is often quite weak.

Chinese companies tend to sacrifice the work-life balance for efficiency. For the past three decades, this has bolstered the economic engine. Now it's probably time to slow down a bit. Some of the younger generation have already begun to value the work-life balance when choosing job positions, even refuse promotion to avoid sacrificing personal life.

Yuan: I don't think you can simply say this is a failure of local companies. It is just the Chinese way of doing things. Chinese businessmen do need to improve their managerial style, but their foreign counterparts who want to cooperate with Chinese companies should gradually get accustomed to the Chinese way of doing things.

Today more than a few US companies have begun to lean toward the Chinese way of doing things when cooperating with Chinese companies. For instance, they book air tickets and accommodation for Chinese executives in advance. This is not a big deal, but a way to show their sincerity.