HR seen as key to profit from firms’ investments abroad

Some 87 percent of Chinese companies going global failed to reach their annual profit targets — and Li Xiangyang, 39, a construction engineer, might know why.

Chinese human resources deployed abroad are not utilized well, which has a negative impact on the operational and financial performance of the companies concerned, he said.

Li said if he were given a chance to turn the clock back 10 years, he would probably choose not to work abroad at all.

He has been working overseas for the last decade, and is much the better financially for it. And wiser too. However, there have been heavy trade-offs in terms of family life — and that’s simply not worth the trouble, he said.

In 2003, he was dispatched by his Chinese employer to work on infrastructure projects in Africa and Southeast Asia. As part of his employer’s go-global strategy, Li was involved in the building of highways, bridges, airports and hydropower stations.

Each such project would last from one to four years, he said. Li would get to visit his family just once or twice a year. This meant he had to sacrifice the pleasure of watching his only child grow up, he said.

“At first, I just wanted to improve the economic condition of my family. Later, I wanted to wed my girlfriend and afford a house of our own. I was finally able to do all of that over a period of time, thanks to my stints abroad, but I lost a great deal too.”

For many Chinese workers and professionals, overseas postings could be a surefire way to earn more than what they would at home. Job promotions are not uncommon either.

As Chinese corporates adopted a go-global strategy to exploit growth opportunities presented by the Belt and Road Initiative, they felt an acute need to deploy domestic human resources to execute and oversee overseas projects.

From January to April, Chinese mainland investors made $35.58 billion of nonfinancial outbound direct investment in 2,459 enterprises in 144 countries and regions, up almost 35 percent year-on-year, according to data from the ministry concerned and the State Administration of Foreign Exchange.

However, while about 87 percent of Chinese companies that went global missed profit targets, some of them may take 10 years to break even, according to a recent report jointly released by the Ministry of Commerce, the United Nations Development Programme and the State-owned Assets Supervision and Administration Commission of the State Council.

One of the reasons for the poor corporate performance overseas is the Chinese companies’ inability to attract the right kind of talent for