BEIJING — When the best job Mikala Reasbeck could find after college in Boston was counting pills part-time in a drugstore for $7 an hour, she took the drastic step of jumping on a plane to Beijing in February to look for work.

A week after she started looking, the 23-year-old from Wheeling, West Virginia, had a full-time job teaching English.

“I applied for jobs all over the U.S. There just weren’t any,” said Reasbeck, who speaks no Chinese but had volunteered at the 2008 Beijing Olympics. In China, she said, “the jobs are so easy to find. And there are so many.”

Young foreigners like Reasbeck are coming to China to look for work in its unfamiliar but less bleak economy, driven by the worst job markets in decades in the United States, Europe and some Asian countries.

Many do basic work such as teaching English, a service in demand from Chinese businesspeople and students. But a growing number are arriving with skills and experience in computers, finance and other fields.

“China is really the land of opportunity now, compared to their home countries,” said Chris Watkins, manager for China and Hong Kong of MRI China Group, a headhunting firm. “This includes college graduates as well as maybe more established businesspeople, entrepreneurs and executives from companies around the world.”

Watkins said the number of resumes his company receives from abroad has tripled over the past 18 months.

China’s job market has been propped up by Beijing’s 4 trillion yuan ($586 billion) stimulus, which helped to boost growth to 7.9 percent from a year earlier in the quarter that ended June 30, up from 6.1 percent the previous quarter. The government says millions of jobs will be created this year, though as many as 12 million job-seekers still will be unable to find work.

Andrew Carr, a 23-year-old Cornell University graduate, saw China as a safer alternative after classmates’ offers of Wall Street jobs were withdrawn due to the economic turmoil.

Passing up opportunities in New York, San Francisco and Boston, Carr started work in August at bangyibang.com, a Web site in the southern Chinese city of Shenzhen that lets the public or companies advertise and pay for help in carrying out business research, getting into schools, finding people and other tasks.

“I noticed the turn the economy was taking, and decided it would be best to go directly to China,” said Carr, who studied Chinese for eight years.

Most of his classmates stayed in the United States and have taken some unusual jobs – one as a fishing guide in Alaska.

China can be more accessible to job hunters than economies where getting work permits is harder, such as Russia and some European Union countries.

Employers need government permission to hire foreigners, but authorities promise an answer within 15 working days, compared with a wait of months or longer that might be required in some other countries. An employer has to explain why it needs to hire a foreigner instead of a Chinese national, but the government says it gives special consideration to people with technical or management skills.

Rules were tightened ahead of the 2008 Beijing Olympics, apparently to keep out possible protesters. That forced some foreign workers to leave as their visas expired.

Some 217,000 foreigners held work permits at the end of 2008, up from 210,000 a year earlier, according to the National Bureau of Statistics. Thousands more use temporary business visas and go abroad regularly to renew them.

Reasbeck said it took her two months to find the drugstore job after she graduated from Boston’s Emerson College with a degree in writing, literature and publishing. She said she applied to as many as 50 employers nationwide.

Today, on top of her teaching job, she works part-time recruiting other native English-speaking teachers. She makes 14,000 to 16,000 yuan ($2,000 to $2,300) a month.

“I could have a pretty comfortable life here on not a very high salary. English teachers are in high demand,” she said.

Reasbeck said most of her college classmates are in part-time jobs or unemployed.

“People are sleeping on their mom’s couches, as far as I know,” she said.

While many jobs require at least a smattering of Chinese, some employers that need other skills are hiring people who do not speak the language.

Bangyibang.com’s founder and CEO, Grant Yu, has five foreign employees in his 35-member work force. Yu plans to add more and said he might hire applicants who cannot speak Chinese if they have other skills.

“I don’t believe language is the biggest obstacle in communication, as long as he or she has a strong learning ability,” Yu said.

Feng Li, a partner in a Chinese-Canadian private fund in Beijing that invests in the mining industry, said he needs native speakers of foreign languages to read legal documents and communicate with clients abroad. He plans to recruit up to six foreign employees.

“We don’t need Chinese guys who speak English like me,” Feng said.

Some foreigners see China not just as a refuge but as a source of opportunities they might not get at home.

“Having one or two years on your resume of China experiences is only going to help you back at headquarters in the United States or if you apply for business schools,” said Shaun Rein, managing director of China Market Research Group in Shanghai.

A 28-year-old former London banker took a job a year ago with a Chinese private equity firm after the crisis devastated his industry at home. He said that even though he spoke no Chinese, his experience and contacts made him a sought-after asset in China, a market that he said offers “a much faster route to a top-level position.”

“I actually earn more out here,” said the banker, who asked not to be identified by name at his Chinese employer’s request. “And the hours are much shorter.”

Konstantin Schamber, a 27-year-old German, passed up possible jobs at home to become business manager for a Beijing law firm, where he is the only foreign employee.

“I believe China is the same place as the United States used to be in the 1930s that attracts a lot of people who’d like to have either money or career opportunities,” Schamber said.

Job hunters from other Asian countries also are looking to China.

An Kwang-jin, a 30-year-old South Korean photographer, has worked as a freelancer for a year in the eastern city of Qingdao. He said China offered more opportunities as South Korea struggles with a sluggish economy.

Still, foreigners will face more competition from a rising number of educated, English-speaking young Chinese, some of them returning from the West with work experience, Rein said.

“You have a lot of Chinese from top universities who are making $500-$600 a month,” Rein said. “Making a case that you are much better than they are is very hard.”

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The Daily Reckoning

That we live in an age of miracles has become common knowledge. A man may sit on a beach near Sydney, with nothing but the bucket bottom of the universe over his head, and still carry on a casual conversation with an Eskimo near the North Pole. Using an Internet-based phone service, he may do so at negligible cost. If this were not miracle enough, he may now grow himself a new nose, if he needs one, on his own arm.

In this age of miracles, people seem ready to believe that anything is possible. Recklessly crossing the street at the end of the Late Bubble Epoque, the world economy got hit by a cross-town bus. Now, the feds propose to reverse and run over the poor fellow again. It will be as if they had reversed the film; the economy will be as good as new, they say.

But we are suspicious. And we begin today’s rumination by examining the bus driver’s motives.

In its naked form, government is not evil; it is merely a self- interested parasite, like a bank lobbyist. Its main value comes from its ability to elbow out other parasites. Of course, the typical citizen is no saint either. Instead, he is merely a parasite in the larval stage. If he is lucky enough or cunning enough, he could grow into a parasite himself. The citizen, generally, doesn’t mind being lied to and robbed – just so long it is by someone he elected. Or at least by someone whom tradition or local connivance put in place. He does not usually resent his homegrown government, even though it routinely costs him a substantial part of his output. On the contrary, he grows so fond of it he even dons his helmet from time to time to protect it. Naturally, the feds return the favor.

The basic business model of government is to keep order, protect campaign contributors and lure supporters with the promise of other peoples’ money. The game plan of the typical citizen is even simpler: to be on the receiving end, not the paying end. Over time, more and more of them get into position. And the whole society becomes more costly, and more corrupt.

In the United States, entire industries now operate as wards of the state. They may have too little capital. Or, their operations may be too costly. Or, their products may be simply out-of-date and unattractive. Still, government keeps them going – even at the cost of at the expense of competitors. And the money doesn’t only go to business. Cities stay solvent only by the grace of federal government grants. Whole sections of the population depend on government – including 34 million who draw their rations directly from the federal food stamp program. The spectacle is breathtaking and alarming at the same time – like a Pakistani bus on a mountain road, freighted with passengers clinging to the roof. The old rust bucket could tip over at any time, but what politician would tell a voter to get off?

That preface on the state out of the way, we turn to the state of the economy. The key to understanding the great credit bubble of 1945-2007 is to capture the codependent relationship between China and the United States of America. It seemed to serve both parties well. Each enabled each other’s excess. China added mightily to the world’s supply – far more than was actually needed. America, meanwhile, did heroic work on the demand side. While the growth in the United States was led by consumer spending, the growth in China was led by capital investment; factories expanded, towns were built, and output was revved up. But there was a flaw. Americans ran out of money. After the ’70s, they could only increase their buying by going into debt. This they did with insouciance bordering on insanity. Total debt rose 370% of GDP and then blew up in 2007, with major lenders forced into bankruptcy and mergers, while GDP sank at its fastest pace since the end of WWII.

Now, the old formula no longer works – neither for Americans nor for the Chinese. Despite the urging of their government, Americans cannot be expected to take on more debt in order to consume more stuff from China. As savings rates grow toward 10%, demand from the United States will collapse by an estimated $1 trillion per year. With the China trade now accounting for 83% of America’s non-oil trade deficit, you’d think the Chinese would panic. They already have as much as two times the output capacity needed to meet real demand. They should trim their manufacturing sector, not expand it.

We draw out that relationship only to show how hopeless it would be to draw it out further. Borrowing to consume is merely tricking stuff from the future to enjoy in the present. By 2007, some $30 trillion worth of spending that would have occurred ‘in the future’ had already occurred in the past. Factories that would have produced consumer items for 2009 discovered that they had already produced more than enough of them in 2005 and 2006.

It would be better to invite the future in…let her collect her debts…and then get on with things. Yet government officials on both sides of the Pacific continue their numbskull efforts to revive the bubble economy. On the US side, the feds are trying to stimulate demand for more stuff. On the far side, Chinese stimulation is going into producing more stuff. As if the world didn’t have too much stuff already.

But the role of government is neither prosperity nor plausibility…but protection of the pests and parasites. They will keep paying them off and carrying them along…until the bus runs off the road.

But it’s not prosperity that government really cares about. The big bus keeps trundling along – picking up pests and parasites along the way. It will keep going until it runs off the road.

Until next time,

Bill Bonner
for The Daily Reckoning Australia

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• The United States Matters Less and Less to the Oil Market
• China, the Miracle Economy

More articles from The Daily Reckoning….

Is a bubble bursting in China’s stock markets, or have this month’s events been more about healthy profit taking?

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Zero Hedge

China: Bogus Boom by American Enterprise Institute For Public Research

More articles from Zero Hedge….

The world’s third-largest economy seems to suddenly be making M&A headlines, particularly in the resource sector but, some analysts think it is a natural progression and the latest spate of deals is just the tip of the iceberg.

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The conventional wisdom has it that the massive foreign currency reserve held by China’s government is primarily due to the US trade deficit, and that the US economy will be in big trouble should China ever decide to stop financing the trade deficit.

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I for one did not realise that the EU tariffs on screws was so high. Why?

The FT report (plus this story makes for a good blog title).

Anti-dumping legislation is always interesting (at least to me) and the EU are getting more and more trigger happy when it comes to using anti-dumping as a means of protection. Dumping is always hard to prove.

It will be interesting to see how this plays out.

China in EU trade spat over screw imports [FT]

China has sparked a row with the European Union after complaining to the world’s trade watchdog that EU anti-dumping duties on Chinese screws and bolts are breaking global commerce rules.

The world’s second-largest exporter lodged its first complaint against the EU with the World Trade Organisation on Friday, protesting that EU tariffs of up to 85 per cent were “neither impartial nor transparent” and were damaging business for hundreds of Chinese companies.

The move signals Beijing’s willingness to defend its trade-related interests more aggressively through multilateral institutions, as well as its implicit acceptance of the authority of those western-dominated institutions.

The European Commission said the duties, imposed in January on goods worth some €575m ($812m) a year, complied with WTO rules and served to protect European businesses from unfairly priced Chinese goods.

Under WTO rules, a country imposing anti-dumping duties must prove its domestic industry has been injured by cheap imports from a specific country.

The dispute comes only days after EU trade officials approved pre-emptive penalties on imports of steel pipe from China, viewed by some as a protectionist move intended to mitigate the effects of the economic downturn within the 27-state bloc.

In a statement from its WTO mission in Geneva, China said the commission had failed to comply with the trade watchdog’s rules when it investigated the imports and imposed the measures.

“The determinations made are neither impartial nor transparent, which infringes the legitimate commercial interests of over 1,700 Chinese fastener producers,” it said.

It said the EU had been inconsistent in its application of the rules given that two Chinese subsidiaries of European firms – Italy’s Agrati and Celo of Spain – were exempt from the duties.

However, the European Commission said the measure was fully in line with WTO rules. “Anti-dumping measures are not about protectionism, they are about fighting unfair trade.

“The decision to impose measures was taken on the basis of clear evidence that unfair dumping of Chinese products has taken place with state distortion of raw material prices,” Lutz Guellner, trade spokesman, said.

Between last September and June, other WTO members, particularly the US, India and European countries, brought 77 cases worth a total of $9.8bn against China, more than double the number of cases in the same period a year earlier, Chinese state media reported.

Until recently, China has been reluctant to use the WTO to defend its interests. However, it has now decided to engage more directly to ­protect its businesses, according to reported comments from Zhou Xiaoyan, deputy director of the China Bureau of Fair Trade for Imports and Exports.

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Originally published at China Economics Blog and reproduced here with the author’s permission.

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