Salary for Foreign Engineers

I received an email from an Italian Engineer who received an offer from a Shanghai company of 10,000 RMB (about 1,400 USD) per month salary in Shanghai. He asked whether it is high or low for a foreign engineer. I believe this is a very common question to ask for people considering a Shanghai job, so I want to spend today’s blog talking about this issue again.

Before you continue reading, I believe my previous articles on the same topic may help:

  1. Foreign Job Seekers Move to Shanghai Oct 31, 2007
  2. Is 10,000RMB/Month a Ridiculous Offer? Apr 6, 2005
  3. Salary in Shanghai – Part II May 19, 2004
  4. Salary in Shanghai Jan 6, 2004
  5. Find a Job in Shanghai Aug 20, 2003

The Line Between “Foreign Candidate” and “Local Candidate” for a Job

Things change dramatically in the last 5 years since I started my blog. Just I talked in the

article: Foreign Job Seekers Move to Shanghai, more and more foreign people are moving to Shanghai to seek for job. I cannot imagine it when I was a college student 10 years ago, but it is turning into reality.

20-10 years ago, only senior people come to Shanghai, like the General Manager for a business, or those senior managers for a plant. They came as part of the move in of international companies. They receive really high salary, not only by the standard of local salary level, but also by the standard of their peers working in their home country – the hardship bonus is a very big part of their pay. At that time, the gap of salary level between foreigners and local employees are very high, easily 5 – 10 times difference. However, to be fair, the gap is not only because of their foreign status, but also because of their roles in the company. There are not many people who can take those roles when China just started its journey of internationalization, and/or market economy.

Recent years, more and more senior positions are filled by local people since the younger generation have grown up in China, while more and more junior positions are open to foreign job seekers. This changed the landscape of the comparison of local and foreign people’s salary a lot.

Foreign, or Local is not the Key for a Job

Although for some positions, it is still an important factor, but generally, less and less jobs are tied to nationality. Like software engineer position, talented young college graduate from China is apply (as always in the last 20 years), and more and more foreign college graduates are joining the race, as the number of resumes I received and my friends received from abroad indicates… For higher level jobs, like a marketing manager or GM, local MBAs are competing with international MBAs.

In this situation, foreign job seekers have to face one thing that they may not like, that is, they have to face the competition from the local talent. This is not a very good thing since in the competition for jobs, especially for relatively lower end jobs, foreign candidates do not have obvious advantage, especially for the expected salary.

10,000 RMB is a very decent salary package for local engineers (with few years of experience), while it is an Ridiculous Offer for an engineer in London. On the other hand, the quality of local engineers are more and more competitive with the recent educational system.

Accept it or Something…

Now let’s get back to the original question. If 10,000 RMB/month is the market standard for the position, I don’t think a foreign candidate has too much negotiation power to change it, unless it is a position that only foreigners can fill. My friend shared the story with me. She interviewed a candidate for his position, and he is qualified for it. She said, “I am happy to accept you, but I can only offer 1/10 of the salary you are earning now.” That is the cold reality. (For people who are curious, the candidate I talked about finally accepted the offer).

If that is the case, you can only take it or leave it. If you feel that is not acceptable, maybe find another place to apply for a job. I know it is no longer paradise as the early days in Shanghai – backpacker foreigners who can speak English earns much more than local professor or manager by teaching English lessons on their part-time. The good old time just past.

10,000 RMB

What does 10,000 RMB/month means?

It is a decent salary, if not a “impossible” salary for most of people. It is good enough. You can leave decent local life and you can be much better than many people.

This brings in another interesting question: I heard Shanghai is one of the most expensive city to live, isn’t it?

My insight for this is, if you want to live western developed country life here, it is even more expensive than western cities. For example, cars are much more expensive than any city in US, and golf can cost your 10,000 RMB in one week easily….

However, if you go to local good restaurants (not those for expats, which charges more than a whole dinner for a beer), or take public transportation, or even taxi, it is very good for you.

Good Luck

So finally, good luck to you and other foreign job seekers to Shanghai. The good thing is, finally, the job market in Shanghai and China opens to foreigners, but the problem is, as you can imagine, the competition started.

20 thoughts on “Salary for Foreign Engineers

  1. Grace Zhang

    Dear Jianshuo, seriously, have you gone shopping recently in Shanghai? RMB10K per month is no longer a decent salary now.

    10K for a young man=4K rent for 1 bedroom flat close to office

    +0.5K utility fee(ADSL, Electricity, laundry and etc)

    +1.5K transportation

    +2K meal expense

    +0.6 income tax

    +1.4K others(like drinks with friends in the bar, grocery in supermarket, dating, entertain friends from hometown)

    He even won’t have enough savings to budget some trips.

  2. Shen

    we think as normal office working that salary is acceptable, but if you do sales and so on, that should be increased as per your sales and totally depend on yr ability, we are doing so in our company

  3. Jian Shuo Wang

    @Grace, very true. I will do another blog article to talk about the increase of living cost, but unfortunately the salary level didn’t change too much for engineers in the last two years…

    @Shen, you are absolutely right. Salary is a very complicated thing, and there is no way to cover all possible aspects of it. Maybe the only correct but useless answer is, the salary range is from 1 RMB per year to billions of RMB…

  4. Mek

    @Grace

    If the guy was going to spend 4K on the apartment, I suppose the 1.5K transportation cost will be high :)

    But yeah inflation in China is getting rediculous…

  5. DC

    1.5K for transportation? Taxi to every ride? I guess that is not necessary. He can try out the subway which is very convenient. It is another new experience and learning more about China. Nothing spectacular sitting in a taxi and caught in the jam.

    Even myself, I start learning to take local bus to certain destination but of course not the peak hours :P

  6. Ginger

    Jian Shuo, are you assuming that the foreigners who come to Shanghai are fluent in Mandarin? These are not foreigners who only speak English, are they?

  7. DB

    Good point, Ginger! I think it makes sense to divide foreign job-seekers into different categories:

    1. Fresh graduates without work experience and no Mandarin skills

    2. Fresh graduates with Mandarin skills (it makes less of a difference if the language skills are good or excellent for they will improve considerably anyway)

    3. People with work experience, but no Mandarin skills

    4. People with work experience and Mandarin skills

    While being unaware of any HR policies of MNCs in China addressing foreign job-seekers, I would argue that due to the influx of voluntary foreigners to the Chinese labour market, salaries for foreigners (especially if inexperienced and w/o Mandarin skills) will drop further. I have never understood why a company in China gives in to a foreign international business graduate’s (Cat. 1) excessive demand of RMB 15,000 gross per month + accommodation. In my view, he first has to learn Chinese to be of equal value compared to a local.

    As an aside, I have fellow students who have just graduated in Germany (Cat.1) and demand EUR 4,000 gross per month for a job as a local in China, while the company only offered RMB 7,000-8,000 gross per month w/o accommodation. Needless to say, they didn’t reach an agreement. In fact, those people wouldn’t even earn EUR 4,000 per month in Germany unless they were part of the elite and could nail a job in one of the DAX30 companies or in the field of consulting or IB. And even RMB 7,000-8,000 is unjustified imo if local graduates who do understand the local language, culture, people, and market, earn approx. 50% of that.

    Getting back to the original question: I think we first need to clarify to which category the Italian Engineer belongs to and secondly, in case he belongs to Cat. 3 or 4, if the company really needs an experienced foreigner for this job. If not, then the company has more the upper hand for they can choose a cheaper candidate instead and thus exert pressure on the Italian to accept a lower salary or look for a job elsewhere.

  8. Jian Shuo Wang

    @DB and @Ginger, you mentioned a very good point. Foreign job-seeker do have some advantage for certain jobs, but the opportunity is not as big as before. If a foreign job seeker wants to compete for a local job, to be honest with you, I don’t think there is a match between the company and the job seeker. The gap between salary expectation can easily reach 5x, or higher. But for jobs that needs international experience, or solid business experience, maybe the foreign job seeker can still get a pretty high salary for it.

  9. Agitprop

    Dear All,

    I know this topic has been beaten to a pulp, but there are so many unpredictable factors invloved here liek timing and luck. I work in the creative field, and I have to say from an international sense, the china market has less home grown talent in this area.

    I’ve been in SH for 4 years now, and I’ve taken a lot of lumps to understand the market, culture, language, etc. Was actually very naive when I first got here. My Salary when I first arrived was 24k RMB gross, and finally with hard work and persevereance I am currently making 40k RMB net. I’m by no means fluent in mandarin, but I can communicate with and manage a team of 12 designers.

    Now in the first 3 years I had many interviews for similiar positions like the one I have now – but those companies were ‘only’ offering 20-25k RMB gross. I was a bit frustrated and was actually planning on going back to the USA – until i got real lucky finding my current job. And the best thing about it was it came through by a casual email to a headhunter about an actually lower position that was advertised (at this point I had given up on headhunters).

  10. jqianmd

    My Gosh! How can people expect good salary in a country that bases its most competative advantage on cheap labor? Even engineering profession is considered a sort of cheap labor because most Chinese enterprises are not short of engineers. You rather find a sales or marketing job in China than an IT or engineering job.

  11. Bianca

    Dear DB and Jian shou,

    could I ask—as per yr insight, how much employers would offer if the foreigner job seeker belongs to Cat.3? I have a friend who wanna come to SHA and he asks to check some background info. for him. Thank u!

  12. DB

    Work experience per se has no value. It depends on what you have learned and accomplished in your career so far because that is what your market value is derived from. For instance, 8 years’ work experience as an accountant won’t help you to add considerable value to a Chinese company that hires you as an accountant. Hence, in such a case, the foreign accountant can’t expect a salary far above the local standard. In contrast, an engineer who is specialized and experienced in an area that a) is growing rapidly and b) suffers from a severe talent shortage in China can reasonably demand more.

    The crux is: Is a job candidate replaceable or not? Two examples:

    1) If I need an IT admin for lower-skill labour, I probably don’t need someone who used to work as a CIO abroad. In any case, I will only offer a salary that is appropriate for a local IT admin. Either the former CEO accepts the huge paycut (happens sometimes) or he refuses and I will find someone else who will accept the lower salary.

    2) If I need an expert in, say, environmental engineering or magnetic resonance tomography with international experience and proficient English skills, and I believe I will be unlikely to find this candidate in the Chinese labour market, I would have to turn to the global labour market to find a suitable candidate. In that case, the salary expectation will definitely be higher. If it is essential to get the right candidate from abroad, I will have to pay a hefty premium. The question whether Chinese skills are required of course depends on if the employer deems them as essential. Oftentimes, the pool of candidates with invaluable expert know-how + international management experience + proficient English and fluent Chinese is so narrow or the candidates are so reluctant to return home that you have to pay even more than they are earning now (in absolute terms, i.e. if they now earn 140k USD gross per year, be ready to offer at least >1,2m RMB) to lure them to China.

    What I’ve been trying to highlight is that having foreign citizenship doesn’t guarantee you a high salary in China anymore. Very skilled foreigners have always been and are still earning a lot in China – irrespective of their contractual status (expat or local). In this regard, I don’t really see a downward trend for salaries. It is only those who are replacable, e.g. fresh graduates or English teachers, that are facing tougher times in the Chinese labour market. At the end of the day, prices are set by – hardly surprising – supply and demand.

  13. DB

    @ Bianca:

    If your friend doesn’t speak any Chinese, he should check for jobs that don’t require Chinese language skills. He would also be well-advised to familiarise himself with the local HR policies of the company he would like to apply with.

    Some companies focus very very strongly on English language skills when hiring locals. In practice, though, 98% of the locals barely have any international exposure in their daily work. So the only really tangible benefits of having locals with proficient English skills is not having to find senior people with Chinese language skills. For experienced with no Chinese skills, the odds of finding a high-pay job are higher in companies to which the aforementioned characteristics apply.

  14. DB

    Hope you don’t mind me asking a stupid question: How do foreigners find these so-called “local expat” positions? Usually, you can find job advertisements for 1) real “expat” positions or 2) for local positions, i.e. Chinese domestic advertisements addressing Chinese locals.

    Do you know of any people who are working in China for a reasonable salary but on a local package, who have not been poached by headhunters? How did they get their job? Through relationships? Taken over after an internship in China? Just tried their luck by sending unsolicited applications to myriad companies? Or by applying to local Chinese job advertisements and negotiating a higher salary in the job interview?

  15. Ser

    Hi

    I would like to hear some advices from you guys.

    Currently i am studying a Singaporean studying in Singapore and would be graduating soon next year with a Diploma in Business IT.

    I had been to Shanghai as part of my internship for 6 months in a Market Research Company. During my attachment period, i had loved Shanghai so much and had developed interests working in Shanghai after i graduate.

    And if after i had graduated with my Diploma, would it be hard for me to apply jobs in Shanghai?

    Is it necessary to have a Degree to work in a foreign country, especially Shanghai?

    Do give me some advice.

    Thanks Alot.

  16. piotr salita

    We are looking for 2 traders in wood sector fro new year.

    We are ERDENTON S.A. Uruguay/Brasil exporter of tropical wood and pinus from South America.

    We looking for 2 person – from wood sector (experience) for our new representation in Shanghai

    Please sent offer to my e box

    office@euro-bras.com

    WE looking to for one OFFICE ROOM TO RENT in BUSSINESS CENTER IN SHANGHAI

  17. Alex

    I have been looking to move to Shanghai in the past month or so. I have a 6 figure salary in Chicago working as a senior business analyst in the futures trading industry. I want to move to Shanghai mainly for family reasons. My grandfather recently passed away and my grandmother is by herself. I am very close to her and would like to move back and be with her. My parents are settled in the US as with me (married, no kids). My question is what type of job are out there in the financial sector and how much do they pay? I know a 6 figure salary in $ is probably not possible, and I am willing to take a pay cut. But I have a house payment here and certainly don’t want to go more a 15-20% cut. Thanks

  18. Jian Shuo Wang

    @Alex, the question is hard to answer for me, to be honest. The salary range in Shanghai is very big – it is mainly by the factor that to find people combining the financial experience and English is hard – high pay, and people with just financial experience is easy – low pay. In the current market (at the time of this comment, we are in the middle of financial crisis), I am further not sure of what to expect. The only way to find out is to send out resume and start to talk.

  19. Andrew

    I’ve just accepted a job as a fresh PhD research student from the UK to work in Shanghai.

    I would earn around £14k in Shanghai compared to £30k+ in London, but after sticking it in a spreadsheet and carrying out some sums, I will end up saving the same amount from both jobs.

    Being British Chinese, I may be better equipped to integrate into local eating etc. but all those ‘OMG’ 120k is nothing sensationalists… good luck finding a job in the West… there aren’t any!

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