21 October 2016
Pollution in Beijing is a major factor driving expats away.
Photo: Xinhua
Pollution in Beijing is a major factor driving expats away. Photo: Xinhua

Why Beijing is losing many of its expats

It could almost have been planned that way.

As representatives gathered in Paris at the 2015 United Nations Climate Change Conference this month, a smoggy haze floated over the Chinese capital, 22 times higher than the World Health Organization’s limit, and forcing China to issue its first red alert, closing schools and construction sites and restricting traffic.

This year, Beijing’s population is estimated to have exceeded 22 million, and the city’s pollution levels are rising accordingly.

Much of the unsightly smog is made up of PM 2.5 — particulate matter that, when inhaled, can lead to an array of health problems that are more prevalent in China than ever before.

As a result, international firms doing business in Beijing are finding it harder than ever to attract and keep foreign talent in the city, which was once a sought-after expat destination.

China is one of the world’s biggest emitters of greenhouse gases but has recently been forced to take a stand against pollution.

Its national climate plan, submitted to the UN in July, promises a commitment to spend 41 trillion yuan (US$6.6 trillion) on climate change solutions, making China the first developing country to commit to a carbon peak.

President Xi Jinping pledged change at the Paris summit, and government measures have been put in place to curb the smog, most of which is due to the country’s dependence on coal-burning power plants, massive industrial factories, chemical industries and rapidly increasing car ownership.

At the end of October each year, coal-burning public heating systems add to the particulate load.

Companies that violate environmental laws are facing the biggest fines ever, and a Clean Air Action Plan is working to reduce car usage, but these changes are too little, too late.

The foreign residents of Beijing are unimpressed by these developments.

A German expatriate who works for a leading car manufacturer confides that he intends to take his wife and two children back to Frankfurt after four-and-a-half years of living in Beijing.

He recalls that the pollution was even worse before the 2008 Olympic Games and the government’s subsequent crackdown on industrial emissions around the capital.

Nevertheless, the air is still too bad for his family – what would be an extreme level of smog in Germany is common in Beijing, keeping the children home from school more than their parents consider acceptable.

At this year’s Green Companies Summit, more than a thousand global business leaders converged to discuss sustainability as part of China’s economic growth.

Venture capitalist firms and startups floated ideas for change, including industrial and household-scale air treatment units, new water treatment technologies and renewable energy sources providing alternatives to coal.

While the United States is experiencing a drop in investment in clean technology firms, the opposite seems to be true in China, where burgeoning companies tend to require less capital than their US counterparts.

Foreign manufacturers are concerned about environmentally friendly operations, while the worst offenders – small industrial plants and traditional manufacturers – should soon be phased out as a result of Chinese economic policy.

Engineering and architecture enthusiasts have proposed their own smaller-scale solutions for the inhabitants and administration of Beijing.

Over the last two years, different media have reported projects that seem straight from a sci-fi series.

One involves an “air bubble-type structure” which would enclose a botanical garden, apartments, offices, shops, sports and medical facilities, playgrounds and schoolyards in a filtered and controlled facility.

Another is an outdoor air purifier, which would create a safe canopy for almost 20 people and could be installed at bus stations, in front of residential complexes or in any other high-traffic areas.

One initiative seems outright incredible – a Canadian company launched a line of bottled mountain air, and its first batch of 500 units sold out!

Although change may be on the horizon in Beijing, it is difficult to convince foreign managers and executives to uproot and move to a city with such notorious pollution issues.

Companies with operations in China are attempting to prevent an expat exodus by providing generous hardship packages, including hazard pay for higher management.

Other companies provide home air filtration systems and extra vacation time to visit families in less-polluted countries, although mountain air and sea breezes can be found only two hours’ drive from Beijing.

Believe it or not, the air quality in Beijing is still better than in many smaller cities in northern China, although industrial pollution in Tier 2 and Tier 3 cities attracts very little media attention.

Fighting pollution remains of major importance to Beijing’s future if it is to remain the economic centre of the world’s second-largest economy.

Despite efforts to retain international expats in Beijing, they are showing a tendency to leave rather than stay, although Beijing is still preferred over several locations with better air quality – including India, Russia and Africa.

One push factor is that the city has become one of the world’s most expensive cities for expats, which can be attributed partly to inflation in China and partly to the increasing strength of the Chinese currency, a fact partially borne out by its recent inclusion in the International Monetary Fund’s reserve currency basket.

Ultimately, the expat exodus could be due less to pollution and more to the increasing costs of maintaining an expat family in Beijing — and to the growing talent pool of Chinese executives who are ready, willing and able to replace them.

Beryl Chu, client partner at Pedersen & Partners, is the co-writer of this article.

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