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Sun, Dec 28, 2008 - Page 12 News List

Chinese financial firms look abroad

As Chinese graduates lack practical market experience, foreigners are of great value

By Jimmy Wang  /  NY TIMES NEWS SERVICE , NEW YORK

Delegates from some of China’s largest financial institutions recruit talent at a job fair in Queens, New York, on Dec. 13.

PHOTO: NY TIMES NEWS SERVICE

Mary Yu pitches hard to the recruiter sitting in front of her.

“I’ve got experience in risk management,” she says, naming the bank where she works and watching anxiously as the recruiter scribbles on her resume.

Yu, 43, breathes a sigh of relief when the recruiter places her resume in the review pile — she might be called back for another round of interviews.

Yu was just one of hundreds of jobseekers who attended a recruiting event in the ballroom of the Sheraton LaGuardia East Hotel in Flushing, Queens, where some of China’s largest financial institutions have traveled to recruit talent from abroad. The recruiters are picking from the ranks of financial sector employees who fear what the future might bring.

“I flew all the way from Charlotte [North Carolina], for this event. I’m trying to create a safety net for myself,” Yu said.

The New York event was the last of three stops made by the visiting Chinese delegation, which was made up of recruiters and representatives from more than 27 Chinese financial firms. The delegation, which held events in London and Chicago as part of its global recruiting tour, hoped to fill 170 positions by the end of its trip.

With jobs quickly disappearing from Wall Street and the boom in global finance over for the near future, China still offers opportunity, even as its own economy slows. Worldwide, thousands of financial service jobs have been erased because of the credit crisis, with London and New York suffering large losses.

Now, in a reverse miniature brain drain, Chinese financial institutions are taking advantage of the downturn and focusing on the newly unemployed to diversify and upgrade their own staffs.

“We’re looking very hard right now for experienced, senior-level talent who have knowledge of China. For our junior-level positions, we continue to recruit from our local Chinese talent pool,” said Chen Hong (陳宏), the chief executive of the Hina Group (漢能集團), a boutique global investment bank. The company specializes in cross-border mergers and acquisition advisory and has offices in Beijing and San Francisco.

In another reversal of fortune, China, because of its closed financial sector — which Washington and the West have been insisting China open — has been largely shielded from the toxic mortgage-backed securities that brought down many of the world’s banks. Capital flows in and out of China are tightly controlled and China’s capital markets are closed to foreign companies.

But China’s insular financial system has also kept it underdeveloped. Although employees of large Chinese financial institutions usually graduate from top Chinese universities, they lack practical market experience.

That lack of experience has sometimes led to poor decisions, and in some cases outright blunders. For example, the Citic Pacific Group of China (中信泰富) recently said its realized and potential losses from an attempt to hedge currency risk associated with a large purchase of Australian dollars (needed to buy iron for its steel mills in China) topped US$2.4 billion. The China Investment Corp (中國投資集團), the country’s sovereign wealth fund, which controls US$200 billion in assets, has lost money on almost all of its investments, including a loss of US$2.46 billion, or 82 percent, of the US$3 billion it invested in the Blackstone Group.

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