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Grace Ng

The Straits Times

Publication Date : 31-01-2013

As China's capital remained shrouded in smog yesterday, Christina Lisi Jiang, an Indonesian who has worked in Beijing for five years, is for the first time mulling a move to less polluted cities down south.

"The smog in Beijing is so scary, I feel like I can't breathe," said the manager at a Nasdaq-listed new media group. Jiang, who is in her 30s, is eyeing places like Shanghai, where the air quality index reading (AQI) was 20 per cent lower than Beijing's "hazardous" level of 336 yesterday afternoon.

She is among a growing number of expatriates so spooked by Beijing's toxic air that even Shanghai's 271 reading has been looking good in contrast. An AQI reading of 150 is considered "unhealthy".

Happy Move, a Shanghai-based international moving services company serving expats and foreign firms, said it has noticed a 10 per cent jump in individual and office relocations from Beijing to Shanghai in the past three months, up from a year ago.

"While many of these foreign customers previously based in the northern regions have relocated to cities such as Shanghai or Suzhou for business reasons, the increased pollution could also be a very important factor," said Happy Move manager Jessie Yang.

It is getting harder to persuade top foreign executives to move to China - and especially to the capital, said Beijing-based recruitment firm HR Direct's senior consultant, Matthew Bartoloni. He cited the example of a financial position at the Beijing headquarters of a multinational company that he is recruiting for.

"I've spoken to two candidates, who turned the offer down just because they had a family and didn't want to move to Beijing," he said, adding that one of them is currently based in Shanghai.

This, in turn, has further raised the salary premium for a Beijing position. "Historically, it can cost 10 per cent to 15 per cent more to hire senior-level foreign executives to come to Beijing, compared to Shanghai and Hong Kong," said Bartoloni.

With the recent bout of pollution, this difference has widened "a little bit more", he noted.

Still, the smog alone is unlikely to force foreign firms out of Beijing.

"Currently, the impact of pollution on Beijing's attractiveness is still small, as it is the country's political, cultural, financial and economic capital," said Institute of Public and Environmental Affairs professor Ma Jun. "With China's key position in the world economy, many foreign firms and foreign talent see opportunities in Beijing and are still willing to come," he said.

Beijing hosts over 640 offices and the research and development centres of MNCs, as well as the headquarters of China's state-owned enterprises.

"For some companies, especially those in the oil and gas, commodities, energy and transport, they have to be based here regardless of how bad the pollution gets," said Bartoloni.

So MNCs are staying put - and finding ways to improve their Beijing office environments.

Apple, JPMorgan Chase and carmakers Toyota and Honda are reportedly giving their staff face masks while adding plants and air purifiers to their offices.

Still, Beijing appears to be aware that its draw as an international metropolis is at risk if it does not tackle the pollution problem fast. This week, as the city of over 20 million residents suffered its fourth serious bout of smog in a month, the authorities tightened rules, including shutting down 103 polluting factories.

Yesterday's AQI reading, measured by the United States embassy, improved a little from Tuesday morning, when levels spiked to 517, or "beyond index".

But residents say more can be done - even to the extent of forgoing one of China's favourite activities during the Chinese New Year.

Some 2,000 netizens have pledged to set off fewer firecrackers this year, after Beijing's official data showed a spike in tiny, health-threatening particles in the air last year, largely due to festive explosives.