Beijing is booming, but talent is leaving due to bad air

The horrifyingly bad air in Beijing is driving something of an expat exodus - as well as one by young Chinese executive types. The past three months have seen the worst air quality on record. 

Focus

Some days it is so thick that you can scarcely see across the street. Other days its acrid smell catches at the back of your throat. More than one day in two in recent months, it has been officially unsafe to go outside without a face mask.

Three months of shockingly bad air pollution, known to foreigners here as the “airpocalypse,” is now prompting growing numbers of expatriates and their families to leave China, and some companies to offer hazard pay to keep them here, according to executive recruiters, doctors, and business leaders.

And for the first time, they add, ambitious young Chinese executives, too, are seeking to build their careers in more hospitable cities, driven to fresher pastures by the capital’s foul air.

Though foreigners leave Beijing for many motives, says Jim Leininger, principal consultant at the Beijing office of Towers Watson, a global human resources firm, “the litany of reasons usually starts with air quality. It’s a very important factor.”

“Just yesterday I got two e-mails from people who said they had been in Beijing for several years, the air quality was nuts, and they wanted to go back to the States,” adds Kitty Vorisek, executive vice president of DHR, a head hunting company with five offices in China. Such requests, she says, have snowballed in recent months.

The past three months have seen the worst air pollution on record in Beijing. For a couple of days in January, the levels of PM 2.5 particulate matter (2.5 micrometers or less in diameter, which reaches deepest into the lungs) were 40 times higher than those categorized as safe by the World Health Organization.

On 35 days during February and March, more than every other day, the US embassy’s air pollution monitor detected levels deemed “very unhealthy,” “hazardous,” or “beyond index.”

“Air quality is one of the most negative things about living in Beijing, especially for families with children,” says Mr. Leininger. “It’s all you hear about every day.”

“I’ve talked to a lot of parents who won’t be renewing their employment contracts when they are up,” says Richard Saint Cyr, a doctor at Beijing United Family Hospital who specializes in air quality issues. “For many of them it is a very reasonable decision.”

Foreign business community taking a hit

The trend is anecdotal for the time being; nobody appears to have compiled any statistics yet, but human resources experts say the movement is clear and a handful of departures have attracted attention in the foreign business community.

A senior lawyer for BMW and a top Volkswagen executive both insisted on being repatriated in January, and when anyone leaves “we inevitably hear, nearly every time, that one of the contributing reasons is the air pollution,” says Adam Dunnett, head of the European Union Chamber of Commerce in China.

The traditional outflow of expatriates in the summer, at the end of the school year, is “almost guaranteed” to be up on last year, predicts Max Price, China partner at Antal, an executive consultancy. But pollution is not the only reason, he points out; many international firms are increasingly replacing foreign executives with locally hired Chinese recruits.

That might become more difficult in the future, observers suggest. Some young Chinese executives, who have long seen Beijing as a high-paying mecca where the rewards are worth the hardships, are beginning to think differently.

Reason to go south

Appealing to them are companies such as Meizu, a manufacturer of mobile phone handsets based in the southern seaside town of Zhuhai.

Two months ago, the firm launched a “Blue Sky Recruitment” campaign in Beijing, placing ads in business tower block elevators around the city to tempt young IT engineers into moving south.

“Do you dare to pursue a life with blue sky and white clouds?” read a Meizu poster at a Beijing jobs fair last week. “Welcome to air you can breathe with a PM 2.5 reading of 27.”

“Young Chinese professionals are looking not just at pay but at quality of life issues too,” says Mr. Price, whose own girlfriend has just moved from Beijing to the coastal city of Qingdao to escape the pollution here. “They are very curious about this stuff, more eyes are open, and I can see this increasing.”

Meanwhile, human resources departments are scrambling to deal with the air quality issue for their companies’ employees, buying air purifiers, restoring hardship allowances, and asking for expert advice.

“Our hospital has been flooded with requests from companies and embassies for health talks,” says Dr. Saint Cyr. “A lot of businessmen are very, very worried about this.”

That has made it harder to attract new talent from abroad, says Ms. Vorisek. In the past six months, she says, health questions have become “much more prevalent” among candidates for jobs in Beijing. Some companies, according to Price, are even paying American recruits "danger money" to attract them.

Long term damage to Beijing?

This could do long term damage to Beijing’s future, worries Huang Xiaoping, head of Risfond, a head-hunting company that specializes in recruiting foreigners to Chinese companies. “It will be a big challenge for Beijing to attract foreign talent if the air quality does not improve,” he warns. “Environmental problems could become a big obstacle to future economic growth.”

The Chinese government says it is aware of the threat. Most of the PM 2.5 pollution comes from power generating plants and cars. The head of Beijing’s Environmental Bureau, Chen Tian, promised in an interview this week with the Beijing News that new automobile emissions standards to be introduced in July will help reduce pollution, and that the construction of new power stations outside Beijing will be sped up so that coal-burning generators can be shut down.

In February, the State Council, China’s cabinet, pledged new fuel standards to make gasoline and diesel less polluting.

Similar promises in the past, however, have not always been kept.

Beijing is losing its pre-eminence in China’s economy, and thus its attractiveness to high-flying foreign executives, as second-tier cities develop specialized industries, says Price. “How fast that happens depends on how quickly they get hold of the pollution issue,” he predicts.

“Beijing will always be the capital of the fastest growing big economy in the world,” he says. “But it is losing its attraction."