HONG KONG: In the last two years, more than 30 global asset managers have been awarded licences to set up wholly-owned units in China as they sought a share of the country’s $1.5 trillion (£1.12 trillion) private fund management market. Yet only about half a dozen of those asset managers – a group that includes the likes of Aberdeen Standard Investments, Invesco and Vanguard – have so far managed to come closer to getting their first funds off the ground. One of the biggest problems holding the others back is an acute shortage of qualified and experienced financial sector professionals in the world’s second-largest economy, said people familiar with the matter. Although China is gradually opening up its financial sector – from investment banking to insurance – to greater foreign participation, its rules make it hard to import many foreigners to run businesses onshore. In the newly opened-up private fund management business for instance, China requires senior executives to undertake written tests conducted only in Mandarin, said lawyers advising foreign fund managers. The issue is set to worsen in the years ahead because salaries in China cannot match what a Mandarin-speaking finance professional can get in New York, Singapore or Hong Kong, headhunters and industry insiders told Reuters. “We expect to see a new wave of hiring…by international firms due to the country easing restrictions on foreign ownership in these areas,” said Simon Lance, managing director for Greater China at headhunting firm Hays. “(But) with less than attractive salary packages on offer, many firms are, and will find it, challenging to recruit senior candidates given their high expectations on the skills and capabilities these candidates must possess.” So far, global firms have often based their top China roles in regional centres such as Hong Kong and Singapore – in part, because restrictions on ownership mean they have not had control of onshore operations. But any move to boost onshore operations will involve moving those jobs to China and hiring more workers there – putting more pressure on an already limited pool of trained professionals. “There is indeed keen competition in senior leadership levels recruitment in China,” Aberdeen Standard said in a statement, adding that it was gradually building a team on the ground. Vanguard, which launched a wholly foreign-owned enterprise in Shanghai in May this year, said it was hiring more local talent and was confident of giving Chinese investors the “best chance for investment success with a highly experienced team”. Invesco declined to comment. Several global firms including JPMorgan, Morgan Stanley, Prudential, and UBS have said they would be keen to invest more in China to bolster their presence in the country. But in spite of China’s 800 million-strong workforce, the gap between demand and supply of experienced executives in China has been growing as financial regulators have steadily lifted standards for professionals in the industry. Published in Daily Times, December 7th 2017.