More than a year after China’s reopening and its return to normal life, the exodus of foreign talent seems to have been partially stopped, even if many expats had already left the country between 2020 and 2022. In 2020, there were approximately 845,000 foreigners in Mainland China[1], including Chinese citizens holding foreign passports, while in 2023 the recorded number was 711,000.[2] At first glance, this number seems very encouraging, however, what might have changed is its composition. Based on reports from the different European chambers of commerce in China, the number of citizens coming from these countries has drastically reduced. As a matter of fact, according to the report issued by the European Union Chamber of Commerce, 25% of German citizens have left the country permanently, and similar numbers have also been recorded for French and Italian citizens (-20% each).[3] This drop appears to be much more drastic than the -15% recorded in 2023. If we take a closer look, this trend had already started prior the pandemic. Between 2010 and 2020, the number of American (-23%), French (-39%) and German (-22%) citizens on Chinese territory declined sharply, and so did the number of citizens from other countries such as Japan (-44%), South Korea (-51%), Singapore (-32%) and Australia (-4%). On the other hand, inflows from countries such as Myanmar (+783%), Vietnam (+119%), Laos (+590%), Cambodia (+1159%) and North Korea (+88 %) have increased exponentially, as well as for other African and South American countries.[4]

The risk, therefore, for the country is to have lost a significant number of high-skilled labor from more developed countries, and to have partially compensated for this loss with the entry of low-skilled labors from emerging countries. This theory also seems to be supported by the distribution of foreign citizens on the territory; cities such as Beijing and Shanghai recorded a sharp decline in the number of immigrants in the period between 2010-2020 (-41.5% and -21.4% respectively), while Yunnan province recorded a 700% increase.[5]

In conclusion, although precise data regarding the three-year period of 2020-2022 is still lacking, it is easy to assume that the trend that was already in place in the previous decade has been accelerated by the pandemic and the related restrictions put in place.

Moreover, the disruption brought by the pandemic also had, among other effects, a strategic change towards the Chinese market; indeed, many foreign players have decided to adopt a “China for China” approach. China, therefore, is no longer a potential hub for managing the Asia/APAC region, but rather a market with highly localized organizational structures and a scope of responsibility limited only to China Mainland or Greater China borders. This has clearly triggered a greater focus on recruiting local talent, minimizing the number of expats in the country. We, as Consea, have seen first-hand a reduction in the number of executive searches (hyperlink ) of expatriates in the area.

This new structure has led many companies to move their regional HQ, or to relocate some of the foreign decision makers to Singapore or other areas in South East Asia or Far East, depending on the industry and the business model implemented. Furthermore, many companies are evaluating other destinations in Asia for their new FDI (Foreign Direct Investment), such as Singapore (hyperlink ), but also Vietnam, Thailand, Malaysia and India, particularly for the manufacturing sectors. This consideration is the result of several factors, including:

  • the high labor cost: disposable income per capita in 2023 amounted to 39,218 yuan, up 3% on an annual basis in nominal terms[6];
  • the aging of the workforce: the age of the Chinese workforce increased from 37.1 in 2017 to 38.3 in 2022[7];
  • other macro-economic factors such as declining population, risk of deflation or stagnation, domestic consumption and exports still low, downturn of real estate market;
  • and the willingness to diversify the supply chain.

FDI in the ASEAN region grew between 2020 and 2022 up to $227Bn, although 2023 saw a decline of -16%, but despite this, the number of greenfield project announcements in the region still increased by 37%. Also, India had a similar path in terms of incoming FDI and “greenfield projects”.[8] For this reason, we are seeing a growing demand for foreign talent coming from these areas.

Nevertheless, numbers for China seem to be encouraging and improving for 2024. According to official data, unemployment in urban areas fell by 0.4 percentage points in 2023 to 5.2%[9], so did youth unemployment which fell to 14.9% in December 2023, after the peak of 21.3% reached in July of the same year[10]. GDP ‘s growth has returned to levels around +5%[11], and the government is planning various measures and incentives aimed at helping the economy. Among these, of particular importance for companies and foreign citizens, there are certainly the tax exemption on benefits for foreign staff, promulgated until 31 December 2027, and the “visa-free” entry guaranteed to citizens from the main Europeans countries, as well as from Malaysia and Singapore. Although not sufficient to reverse a trend that has been undergoing for several years now, they are certainly important signs of going in the right direction.


Author: Matteo Scipioni Bertoli, Head of Business Development & Delivery APAC


[1] China embraces increasing foreign residents, China Daily, 2021

[2] Foreigners living in China in 2023 return to 85% of 2019 levels; simplified border measures to facilitate more foreign visitors: NIA, Global Times, 2024

[3] European Chamber of Commerce, European Business in China Shanghai Position Paper 2023/2024.

[4] Number of foreigners in China, results of 7th national census, Expat Focus, 2022

[5] Goodbye China: What Do Fewer Foreigners Mean for Multinationals and the Chinese Economy?, Intereconomics, volume 57, 2022, number 5

[6] China’s per capita disposable income grows 6.3 pct in 2023, Xinhua, The State Council The People’s Republic of China January 17, 2024

[7] China’s Changing Labor Market – Trends and Future Outlook, China Briefing, 2023

[8] Global FDI in 2023 was weak, with lower flows to developing countries, United Nations UNCTAD, Issue 46, 2024

[9] China Unemployment Rate, Trading Economics

[10]China Youth Unemployment Rate, Trading Economics

[11] National Economy Witnessed Momentum of Recovery with Solid Progress in High-quality Development in 2023