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.

I live in Shanghai for 12 years. In the 12 years, many things changes. I am happy to witness one of the most dynamic city in the world in the last 10 years. Among all the changes, the biggest one is there are more and more people from other countries trying to seek jobs in Shanghai. If you ask me, I never thought about it 10 years ago.

20 Years Ago

China has closed its door to the international world for too long. For the whole generation, people know very few from outside. In 1980’s, I saw the propaganda posters in the dining room with my own eyes that says:

It is serious crime to listen to foreign radio stations

Yes. It was posted in the dining room. At that time, if someone was caught for listening to foreign radio stations, he/she will be big trouble, risking for losing live.

20 years ago, world outside China seems as far as the moon. It seems impossible to step out of the country for the whole life, I thought.

Going out is Easier

10 years ago, going out of China is easier. As the communist fever fade out, people realize they are also a human instead of a soldier (ready to scarify his life at any time for a belief). That is dramatic change.

The first generation of students to other countries were sent out in early 1980s. In late 1990s, going abroad is much easier, although it is still far from many people’s imagination.

5 Years Ago, Top Positions are for Foreigners

The next big move is getting into China. With the dramatic economic change, the situation in the job market changes.

At the very beginning, only CEOs, and managers position of foreigner companies were held by foreigners (including people from Hong Kong and Taiwan, since they have completely different social system, background, and skills than local Chinese). They are over-paid in a low living cost market – this is what the market tells us – the rare is the expensive. The impression of any foreigner who has a Shanghai job means he is really, really rich.

Recently, More Broad Job Market

Recently, more broad job market opens to foreigners. People from around the world, especially people from southeast Asia are moving to Shanghai. I personally know some friends who get their good job in Shanghai, and they are original from Philippines or Malaysia or Singapore.

This is a very good thing. With more open market, more talent can come and build the city, and it is more competitive in this global economy.

Changes Ahead

I believe there will be a long and sometimes painful process for the local to realize that Shanghai is more international, and competition in job market will be more than pure local. This is good, but I can predict someone will get frustrated about it. When I go to Seattle, I found many taxi drivers come from India and speak not so well English. At that time, I just couldn’t imagine that 10% of taxi drivers are from India. With all due respect to India, I just mean that current people in Shanghai are not even ready to accept people from outside Shanghai to be their taxi driver, not to mention people from another country. If the role is a CEO, maybe, many people accept that, but if it is a more junior role, who knows. Let’s wait and see…

If you ask me, I’d like to welcome talent from all around the world to China, to Shanghai, as long as he/she is a good person, and really work hard to make the world a better place.

Aims, who lives in London, was surprised to get an offer of 10,000 RMB per month before tax in Shanghai.

Hi!

I’ve been offered a marketing position with a foreign company in shanghai, but was shocked to hear that the salary is only 10,000RMB before tax, plus a 1000RMB monthly accommodation allowance.

To me this seems ridiculous, and something not worth even considering, as it’s less than I earn working part-time, just 10hours per week, here in London.

What are your thoughts? Would I be able to live comfortably on this? Would there be enough money to have a social life outside of work? What kind of accommodation would I find for 1000RMB/month? Would it be nice?

Any comments will be HUGELY appreciated! I only have a limited amount of time before I have to make a decision and sign a contract!

Thank you,

x

Here is my answer.

Aims, to me, it is not a surprise. The average salary for newly graduated student (from not so famous university) drops to 3000 – 4000 RMB per month (before tax) this year. It was much higher before (6000 RMB?), but it is not rare for some university students to get offer of only 2000 RMB. The top students from computer science from top university (Jiaotong or Fudan) can expect higher, but 6000 RMB is already high. Don’t get me wrong. I do know some friends who get 300,000 – 500,000 RMB annual salary immediately after graduating from university, but it is just the exception.

I am not sure about what the level of the position you mentioned. You should expect more than fresh graduate, but that is the range. 10,000 RMB is a reasonable salary in Shanghai. The fact is, labor is cheap in China. Don’t expect to get as much as you get in London.

There are always exceptions though. Many foreign companies relocate senior managers to Shanghai to start the business. This person is so unique that it is impossible for the company to find a replacement in local job market. In this case, his/her salary should be the U.S. or European salary + a percentage of increase to compensate the relation. So the life is nice, really nice. There are many expats here so correct me if I am wrong.

It seems in your case, the marketing position is not that unique and the company can easily find someone more than happy to take the job in local market. You cannot expect big advantage over the local candidate just because you are coming from abroad.

I can understand it seems ridiculous for you to make the move, but it is reality. When people enjoy the cheap China goods, they should have the expectation for lower salary here.

The other side of the coin is, though, the food is cheap and most daily stuff is of 1/4 price of that in Seattle – this is just my guess and there is always exceptions. House is not cheap. You cannot rent any place with only 1000 RMB. I guess 1500 RMB for a place far from downtown Shanghai but with subway is possible.

So consider twice. I believe you may already make the choice not to take the offer. But do think twice. I believe the experience in Shanghai will help you a lot in your career in the long run – if you want to seek for future opportunities in Asia. It is interesting experience. The conclusion is, you can leave pretty well in Shanghai with the salary, if you won’t expect the absolutely same kind of life you have in London.

I had wonderful meetup with my friends whom I had the opportunity to work with: Xiao Wen, Xiang, Zhen Hua, Ming Jie, and Liu Hua… The afternoon in Xian Zhi Xuan was among the most happy hours I had in the week.

One of the biggest achievements I had in Microsoft was to be able to hire some talented interns and worked with them to make sure they learn something from the great company, and helped on their career.

I counted all the interns I hired in my previous work and was positively surprised by the final results.

8 of them finally entered Microsoft

Many others entered Intel, Unilever, Boston Consulting Group, National Instrument, ASUS.

4 continued to work on their doctor degrees in famous university in U.S. or in Shanghai

It prooves that to get an internship in famous companies is the best shortcut to secure a position in the company. The ratio is too high. I am sure 80% of my previous interns got the best they can imagine. If a university student start to think about the future job only in Grade 4, it is just too risky – when their peers already secured the position.

David asked one question about salary in Shanghai.

Hello Wang,

Thanks a lot for creating this homepage, i really love it and i can get most of the information i need.

I was totally blind about Shanghai until i read this website.

But still i would probably need some sort of idea from you and maybe also another readers here to help me with my confusion.

I applied a job in Shanghai without knowing any standard salary there through email and surprisingly the company replied me so fast with one question ‘how much your salary expectation ?’, i got stunned and didn’t have any idea to answer the mail.

My job i am applying is to work as an Technical Manager (IT industry), i speak english, japanese and a little chinese that i think is an advantage for me besided my 7 years experience working in the same industry. It’s a foreign firm.

How much do you think i should expect from the salary ? well, sure it would be nice if i can feel Shanghai as a heaven too ! :-)

Thanks in advance.

Regards,

David.

Well. I have no idea about how a related Technical Manager would expect. “How much do you expect?” is one of the hardest questions to answer during job hunting, especially for the job in a completely unfamiliar city.

The best resource I would suggest is ShanghaiExpat.com forum

Here are some thread to discuss the salary:

Salary expectations Automotive … Manager

According to arnoldchina’s explaination, you should expect 30K-40K as a Automative industry

manager.

the average level of Manager is kinda about 30k-40k RMB annually,

plus the double/triple salary system. medical insurance, pension,etc.

for the hour workers is also can reach almost 10K a year

Before talking about salary, check the Living Cost in Shanghai (and Part II).

Average salary is very hard to tell, since it varies greatly based on lots of factors.

The Enterprise Type You Work For

Nation Owned Enterprises pays very low, something around 1000 – 2000 RMB. For people looking for salary information on Internet, you don’t need to take it into consideration since you don’t like them (for the low salary) and they don’t like people like you (since they don’t has the flexibility to hire you). :-D Of cause, they are changing these days.

Most higher salary jobs exist in foreign owned company and private held companies. According to this report, the average annual salary for white-collar workers in Shanghai is 38,447 RMB (US$ 4,632).

For Fortune 500 companies, like Intel, Microsoft, HP, IBM, people are paid higher. Should be 100K to 200K RMB / year for employees.

Executives are paid very high. I heard a GM position of an IT company is 2 million RMB per year.

A lot of foreigner get U.S. or Europe local pay and dispatched to Shanghai to work. For them, Shanghai will be paradise considering the exchange rate. Foods and drinks are labeled almost the same number (or 50%) higher than that in U.S. The difference is, in U.S, the unit is USD and in Shanghai, it is RMB. The exchange rate is around 8 RMB = 1 USD.

People coming here from U.S should expect lower income since the living cost is much more lower than in U.S. The low living cost has been nominated as top 10 things expats love about Shanghai.

Tax…

According to the last regulation (Chinese site)

Monthly income:

<500 5% 500-2000 10% 2000-5000 15% 5,000-20,000 20%

20,000-40,000 25%

40,000-60,000 30%

60,000-80,000 35%

80,000-100,000 40%

>100,000 45%

The portion below 1000 RMB in Shanghai do not need to pay tax. (It is 1000 RMB for Beijing, 1600 RMB for Shenzhen and 800 RMB for the rest part of China).

Example

For example, if someone get 100K annual salary (already pretty good), that is 8333 RMB/month. (Some companies pay salaries in 13 months with one month double pay.) After tax (20%), he/she gets 6666 RMB. Update: Run corrected me that the tax is not calculated as 20% of salary directly.

The portion of salary you need to pay tax = 8333 – 1000 = 7333 RMB

The tax you need to pay = 500 * 5% + (2000 – 500) * 10% + (5000 – 2000) * 15% + (7333 – 5000) * 20% = 1091.6 RMB

You get 6242 RMB. (Thanks goes to Run, Ginn and JH to help me correct all the errors. I believe this version is the correct one)

How he/she will spend the money?

1. Rent. Typically, he/she will need to pay of rent of 1000 – 1200 RMB – a typical room people from this salary rage will choose.
2. Transportation. 3 RMB for single way Metro –> 6 RMB per day –> 180 RMB per month. Should also consider occasional taxi – additional 50 RMB.
3. Mobile and Internet. Should be 200 RMB in total if the person is not too talkative.
4. Utilities. Utilities is nothing compared to other expense. 100 RMB or so.

So he/she should still have some money (around 4000 RMB) for eating out, shopping, and clothes… That is life of a well-paid white collar in Shanghai.

Jane asked about how to find a job in Shanghai. My friend mvm gave the following suggestions:

To Jane:

most white collars in shanghai are finding jobs in the following websites:

1) http://www.51job.com

2) http://www.zhaopin.com/ (AMAIK, Microsoft’s business unites in the mainland, including GTEC and MS PRC, posts job descriptions in this website)

3) http://www.chinahr.com

i’m afraid headhunters focus more on executives and managers.

if you have friends working in shanghai for big companies, such as ibm, general motor, unilever, blah blah, they will bring you information on open positions from time to time. this is an important channel.

Posted by: mvm on August 20, 2003 03:24 PM

He is definitely right. The most famous job posting websites in Shanghai are

1) http://www.51job.com

2) http://www.zhaopin.com/

3) http://www.chinahr.com

They are designed mainly for local people. The posting and the interface is in Chinese. Even if you search on an English website, the majority of the results are in Chinese.

You will also find the forums on ShanghaiExpat.com helpful. The users of this forum are all expats and there are some good job offers there. Meanwhile, I also opened an job posting forum on my site.

Jobs board on my BBS

Update: New Source – classified September 13, 2009

The best place for common jobs in Shanghai now has become Baixing’s Job board.

Disclaimer: I am the CEO of Baixing.com.