China's smog driving top foreign talent away: US business survey

China's smog driving top foreign talent away: US business survey
Visitors wearing masks in Temple of Heaven in haze-covered Beijing.

BEIJING - China's smog is making it harder for foreign firms to convince top executives to work in the country, the American Chamber of Commerce in Beijing said on Wednesday, offering some of the strongest evidence yet on how pollution is hurting recruitment.

Some 48 per cent of the 365 foreign companies that replied to the chamber's annual survey, which covers businesses in China's northern cities, said concerns over air quality were turning senior executives away.

Pollution is "a difficulty in recruiting and retaining senior executive talent", said the report. The 2014 figure is a jump from the 19 per cent of foreign firms that said smog was a problem for recruitment in 2010.

China's slowing economy, however, remained the top risk for companies, the report added.

Foreign executives increasingly complain about pollution in China and the perceived impact it is having on the health of themselves and their families. Several high-profile executives have left China in recent years, citing pollution as the main reason for their decision to go.

Almost all Chinese cities monitored for pollution last year failed to meet state standards, but northern China suffers the most. It is home to much of China's coal, steel and cement production. It is also much colder, relying on industrial coal boilers to provide heating during the long winter.

The capital Beijing, for example, is surrounded by the big and heavily polluted industrial province of Hebei. It is also choked by traffic.

By contrast, China's commercial capital Shanghai, in the south, suffers less air pollution. Indeed, a similar survey conducted by the American Chamber of Commerce's Shanghai branch did not ask if pollution was affecting recruitment.

Premier Li Keqiang "declared war" on pollution at the opening of the annual session of parliament this month, part of a push to wean the world's second biggest economy from credit-fuelled growth to more sustainable development.

China also pledged on Sunday to make 60 per cent of its cities meet national pollution standards by 2020.

Lulu Zhou, associate director of the Beijing Office of international recruitment agency Robert Walters China, said some foreign executives were using pollution to negotiate higher salary packages. "We have seen some senior level professionals ... who are concerned about relocating to Beijing because of the pollution,"she said.

In a sign of the growing corporate concern over pollution, Japanese electronics firm Panasonic Corp has told its unions it will review the hardship allowance paid to expatriates in China because of the air quality, a spokeswoman said on Wednesday.

And a state-owned Chinese insurer said this week it would offer Beijing residents insurance cover against health risks caused by air pollution, promising to pay out 1,500 yuan ($240)to policy holders hospitalised by smog.

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