PremiumSHANGHAI : Anil Gulani, the vice president and head of China operations at Grupokaybee, a trading company, lives in Shanghai, with his wife and their 12-year-old son. Behind their 240-square metre apartment, is the Suzhou creek that flows through Shanghai all the way east to the Pacific Ocean. Every morning, Gulani walked along the creek.
Gulani and his wife liked to eat out. Chinese food, especially the spicy Sichuan cuisine and the Yunnan dishes, were their favourites. The couple also frequently visited the Italian and French restaurants located in the French Concession and the Bund, areas dotted with many international restaurants. All this was before the covid pandemic interrupted life, and business.
After staying in China for almost 17 years, Gulani is planning to relocate to the company’s headquarters in Singapore this summer. Before the pandemic, they had no plans to leave. However, with the borders being closed for over two years and Shanghai being in lockdown for over two months, they started considering other options.
Gulani hasn’t visited his extended family in Mumbai for more than 18 months, and the travel restrictions also have had a negative impact on his company’s business. “It’s very important for a trading business to interface with your clients," he said. Before covid, he used to travel at least four times a year to South America or Africa to meet clients, which hasn’t been possible in the past two years.
The lockdown in the past two months added to the stress. Gulani said that although it’s good to spend time with the family, it was stressful not being able to go out and meet people. In the first month, it was also not easy to buy the food that they wanted. With limited Chinese reading capability, they had to rely on the translation function on WeChat to communicate with their neighbours. Furthermore, with his son taking online classes at home and not being able to go out for exercises, they turned their dining table into a table for table tennis. He had to adjust his work schedule according to his son’s class schedule, which is not always possible.
All these issues added up.
“It’s very difficult to say goodbye. We have been here for so long and have so many close friends who are like family to us," he said.
Gulani is one of the many foreigners that have left or are planning to leave China. Since China closed its borders in late March 2020, many foreigners have been stranded outside China and among those in China, more have decided to leave as their time away from family becomes longer. In the meanwhile, few have been able to come in to replace those who have left, thus leading to a sharply decreased expatriate population. The latest lockdown in Shanghai may further accelerate the trend.
According to the national census, China had 845,697 foreigners in November 2020. Though the government has not published the official figures for the year before and after, Jörg Wuttke, president of the European Chamber of Commerce in China, reportedly said at a recent forum that the “number of foreigners in China have halved since pandemic began and could halve again this summer."
The official statistics show that Shanghai, the top destination for foreigners in China, had 172,076 long-term foreign residents in 2018, and had a little under 164,000 non-mainland-Chinese residents in November 2020.
According to Mukesh Sharma, a former president of the Indian Association in Shanghai, the Indian population in the city has decreased from 3,800 in 2019 to 2,200. Around 150 Indian banks, IT and manufacturing companies have offices in Shanghai. Among the 2,200 Indians still in the city, around 700 to 800 are senior managers and their families. The rest work in multinational companies, Chinese biotech firms or as independent business owners and traders in textile and commodities like iron ore and steel.
After the current lockdown, Sharma expects another 70% to 80% of Indians to leave by the end of this year. "It's the final blow," he said.
Patience & Anxiety
After the pandemic broke out in early 2020, China brought it under control within three months. When India struggled with its deadly covid waves and had its harshest lockdowns in 2020 and 2021, China was a relatively safe place to stay for many Indian expatriates.
“They thought India was not safe, so let’s stay in China. Why should we go back to India? But now it’s the other way around," Suvam Pal, an Indian journalist who was previously based in Beijing, said.
Shanghai went into a complete lockdown in April and its 25 million residents have been restricted to stay home since then. Shanghai authorities have said they will relax lockdown restrictions from 1 June.
Nevertheless, the tightened border controls of the past two years made it hard for most foreigners to re-enter the country once they leave. All direct flights between mainland China and India remain cancelled (direct flights between India and Hong Kong have restarted).
Pal returned to India in August 2020 because his wife was receiving medical treatment in India for endometriosis (a disorder that affects women) and his father was unwell. He has not been able to enter China ever since.
Because of the stringent visa policies, many foreigners couldn’t risk leaving China. But now they are becoming increasingly anxious, especially after experiencing the stringent measures in Shanghai.
“People have been waiting for the last three years assuming that after the Winter Olympics, flights between India and China would resume," Sharma, who has been living in Shanghai with his wife and two sons since 2011 and hasn’t visited their extended family in New Delhi for three years, said. “Now, after the lockdown in Shanghai, it is very clear that in the next one or even two years, China may not open the borders. People who have been patiently waiting may not be able to wait another two years."
Sharma, who is also a senior manager in an Indian IT firm, initially came to Shanghai for a three-year tenure. He kept extending his stay because he liked the city. But now, he is also considering leaving by the end of this year. If China opens the borders, he might change his mind.
Ramesh Ramaswamy, global chief strategy officer of Bosch Software & Digital Solutions, brought forward his original plan to leave the city in 2023. He relocated to Bengaluru in May this year. “If China had allowed international travel more freely, I could have continued to stay in China," he said. He will continue to manage his team in China from India.
Many other business owners are moving to Singapore, Dubai, Hong Kong, Taiwan, and other and other nearby locations.
“100% hikes"
With more foreigners leaving China and few coming in, many multinational companies are struggling for talent. For companies from non-native English-speaking countries, the foreign talent pool they could choose from is even smaller than those from English-speaking countries.
According to Gian Luca Scarpa, a manager of a joint venture between a state-owned Chinese company and an Italian company, the number of Italian employees at the company’s Shanghai office has decreased from 18 to 14 after covid. The office has not been able to find any replacement for those that left and is now short staffed.
Sharma said that nearly 30 Indians have left his company in the last 15 months.
According to him, it is nearly impossible to find Indian replacements in China because of their limited number and mismatched skills. “It’s very rare for people from one Indian company to join another Indian company in China," he said. Instead, his company has raised salaries of Chinese employees, by as much as 100% for some, to retain them. He declined to disclose the name of his company due to confidentiality reasons.
The reliance on Chinese nationals has caused another issue: instability. The turnover rate of Chinese employees is high. “Whatever policies we bring in, people leave every two to three years," Sharma said. “The turnover rate is very high because of the huge potential and possibilities in China."
The president of a multinational chemical and consumer goods company headquartered in Europe noted that local talent with the right skills set for multinationals are also not easy to find.
“The local talent with skills is in high demand as Chinese companies want to become more active globally, and multinationals continue to expand and have fewer foreigners," he said. According to him, the localization of talent in multinationals has been an ongoing trend for years and has accelerated because of covid. He also declined to disclose his name or that of his company.
The talent localization strategy doesn’t work for every sector. Ramaswamy from Bosch said that companies rely on Chinese returnees more. But in niche areas that require advanced technical talent—such as artificial intelligence (AI) and software development—foreign talent becomes more important than in other industries.
Land of opportunities, still
Some expats who have stayed back in China may have benefited as well.
Gulani said that his company has offered better benefits to its foreign employees “to make it sweeter for them to stay". Pal, the Indian journalist, said that international schools have offered higher salaries to attract foreign teachers to cope with the shortage of staff. He has at least three foreign friends who received multiple job offers from international schools—two to three times their existing salary.
“They got stuck in China and suddenly got jobs from schools," he said. “Most have the feeling that China is becoming more self-reliant since the country has developed a huge talent pool. But international schools need foreign faces."
Frank Tsai, the founder of China Crossroads, a platform for lectures by high-profile academics and business figures in Shanghai, said that in the past two months, he has been interviewed by nearly 15 media houses, including CNN, BBC, Bloomberg and The Wall Street Journal, on a range of topics, from the lockdown to politics in China. This has helped him gain popularity on LinkedIn, the professional networking platform. He has around 7,000 followers and his posts have generated up to 110,000 views.
According to him, this is partly attributed to the fact that there are fewer foreign experts that can share insights about China with the world. “I personally have benefited greatly from being a rare foreigner here," he said.
Emotions vs rationality
Nonetheless, the choice regarding whether to leave or not is largely a battle between emotions and rationality, and a re-prioritization between career and family. People may have different answers depending on the stage of life they are in.
Looking back, Pal thinks he made the right decision to return to India in 2020. His father died in 2021. He felt fortunate to be by his side. He was also able to take care of his wife—she recovered from her illness. Although he has not been able to come back to China, he continues to work for different media organizations in China remotely, and is also involved in cross-cultural activities. He sees himself as a “bridge builder" between the two countries.
Shamim Zakaria, another journalist from India, has made a different choice. He hasn’t visited home for nearly three years. And yet, he has no plans to leave China anytime soon. In his late 20s, he is satisfied with his job and his career is progressing well.
“Every decision in life cannot be solely emotional. It has to be tactical and practical. I do miss my family. At times, you do feel down and might want to explore other opportunities. But I don’t think that can be a reason for me to leave as I established my career here," he said.
Zakaria remains optimistic about the future. “I definitely feel at some point, the pandemic will wane and things will eventually get better. So, I’m just hoping for those good days."
