U.S. tax policy likely a factor in #Americansabroad returning to America

The article referenced in the above tweet is largely about Americans trying to thrive as expats in China (from a personal and business perspective). It appears to be written from a “China centric perspective”. The article and comments reinforce what Roger Conklin has been saying for years:

“U.S. policies and culture hurt the ability of Americans and American companies to compete internationally. We all (with the exception of the U.S. Government: Robert Stack edition and “don’t let the door hit you on the way out” Homelanders) know this. But, it’s interesting to see aspects of this issue discussed.

The comment that Amanda refers to appears with the following article in ChinaLawBlog.com and includes:

As a young professional, who recently finished my master’s of agribusiness degree, I certainly desired to garner some post graduate work experience in the United States, even though I still remain quite dedicated to living in China for at least sometime in the future.

While I am technically a recent graduate, I have been working for 7 years, 3 of those years are post my baccalaureate education in Chinese Studies and Economics. I studied abroad in China, even graduating in Beijing through the University of Houston. I have spent one and a half of the last three years in China on temporary business, or in academia.

Why I am not in China right now? Because I am an American. The importance of having solid business contacts, excellent work experience with two of the world’s largest agribusiness companies, and direct links to my homeland were far more valuable than getting on a plane and trying to find my fortune in China.

On a macro level I believe there is absolutely a decrease in the number of Americans in China.

Part of it is skill based. I am constantly shocked, as someone who is fluent in spoken, and professional in written Mandarin how few people, even in China are able to manipulate the language.

There are two other trends that are likely strong drivers in encouraging returns. One, the requirement that all Americans pay taxes as though they reside in the United States, with only a potential 96,000 deduction, in addition to the loss of the right to vote; these have both greatly impacted all expatriate communities. I know people the world over who have either discarded their citizenship, or who are returning. This is especially true in China, where Americans cannot become citizens. The economics of being an expatriate are no longer favorable for prime middle aged Americans at the peak of their earning potential, hence wait lines to give up citizenship are now two years long in the UK and Canada.

A second driver is something I have noticed as a young American with two Fortune 500 companies under my belt. There is absolutely no path for truly international individuals in the U.S. corporate world. The sheer looks of confusion that my phone conversations in Mandarin with friends, family, and the occasional supplier illicit would be hilarious if they were not so frightening. Americans are some of the least international people on the planet. No one has any idea what to do with a 27 year old, with 7 years of work experience that speaks Chinese. Everyone knows how valuable the skill is, but most also fail to provide opportunities for its application. Most Americans sent overseas are from previous generations and could not tell the linguistic difference between putonghua and shanghainese. Like rapid technological adoption, multiculturalism is a generational shift that HR never prepared for.

When I was working for my first fortune five hundred company they did send me to China on temporary assignment. What I witnessed horrified me. They had just handed the company entirely over to the domestic staff, and has witnessed a dramatic decline in market share in 2 years. They made novice errors like sending staff from Dongbei to Tianjin without understanding the Hukou system, nor that people from Dongbei over the age of 30 do not speak the same dialect as people from Tianjin. I even caught the three Chinese workers invited to the U.S. walking along the freeway to work, as no one realized most Chinese are unfamiliar with driving a car. The list of gaffs was endless and inexcusable.

I completely failed in my attempts to explain to leadership that being a global, international company does not mean you hire only locals. What globalization entails is the promotion of the best local talent back to headquarters, and sending domestic staff overseas to reinforce your unique business culture and drive results. As Americans, we like to believe everyone is the same. This is totally fallacious, and honestly offensive, and largely fails to understand the Chinese consumers motivation for buying American.

When I pointed out how the German company BMW, whose headquarters my American employer shared, had imported 1 in 4 workers from Germany and was having astounding results, the reply I received from a very intelligent and capable colleague, was to accuse the Germans of racism. It is not racism to understand that only by working together can we achieve better results. But it is ignorance to believe that ability with the English language entails knowledge of the United States.

You cannot build a bridge across the Pacific from only the Chinese shore.

I am a firm believer that U.S. corporations are all but giving up the developing world to domestic firms and to the Europeans. The windfall of overseas investment is drastically slowing, as U.S. companies simply maintain there overseas offices for Wall Street. Part of the reason for this is this deeply misguided belief in the democratization of societies. As America is a relatively young international nation, and an enormous market, we are seeing the emergence of a new world, and America hasn’t yet found its place. That is also why many people are returning.

 

 

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