Wall Street's frustrated Chinese bankers are heading back home

[NEW YORK] For Shiwei Zhou, it was partly the sense of obligation toward after-work drinks and talk of ice hockey. William Su felt his career was stuck after four years in the same role. QJ Guo wanted to be near his parents as they age.

All three are among the many Chinese who came to the US to study business, find work and make salaries beyond reach at home and are now headed in the opposite direction.

As US firms have cut bonuses and positions, and China's sector explodes in sophistication and pay, some are migrating back. And while this may seem like an odd moment to repatriate, given the mounting financial jitters back home, two forces are driving the move: the fact that many feel they're hitting a bamboo ceiling in the US and the belief that Chinese growth, while slowing, is shifting into areas that will benefit bankers.

"China has a huge demand for good brains as the labour- intensive economy is behind us," said Cao Huining, professor of finance at Cheung Kong Graduate School of Business. "A lot of people see better career paths in China than in the US, where they probably could just make a mediocre living."

The movement is such a widespread phenomenon that the Chinese have a moniker for the returnees, Hai Gui, or "sea turtles." In Mandarin, the phrase means "return across the sea" and sounds like the animal's name.

CULTURAL NUANCES

The turtles first started swimming back in 2008 when Wall Street erupted in crisis.

They were prized for their understanding of the nuances of Chinese culture as well as Western practices that helped overseas expansion. And with the government pushing for reforms, some joined China's financial regulators.

But the latest round of returns is different. With the government encouraging entrepreneurship to drive growth, China's financial markets are now seen as competitive.

Venture capitalists poured a record US$37 billion into China last year. This has led to the creation of some of the world's most-valuable startups, including smartphone manufacturer Xiaomi Corp and peer-to-peer lender Lu.com, officially called Shanghai Lujiazui International Financial Asset Exchange Co.

SOLD HIS HOUSE

The International Monetary Fund recently added the yuan to its basket of reserve currencies, joining the dollar, euro, pound and yen, so Chinese lenders are also scrambling to strengthen their trading desks.

This is a move that Barclays Plc's estimates could increase global demand for the yuan by as much as US$300 billion by 2020 despite its weakening since August.

The government has unleashed stringent measures to defend the currency, depleting reserves by more than US$500 billion last year.

"In China, the sky is the limit," said Mr Su, executive director at First Seafront Fund, which manages about 39 billion yuan (S$8.3 billion), speaking of his career opportunities. "In a mature market like the US, you have to wait for a long time for opportunities. I didn't know when my turn would come."

Mr Su, 35, got an MBA from the University of Rochester in New York State with a goal of becoming a fund manager. But after four years as a Vanguard Group analyst in Pennsylvania he felt he was not rising professionally, sold his two-story house and moved his family to Shenzhen in October.

American Sports Guo, 29, worked at CBRE Group Inc, the world's largest property services company, as an analyst for two years. Like many Chinese, he is an only child and wanted to be near his parents as they age. Now he's with a state-owned Chinese insurance firm in Shanghai.

"It is just very hard to crack that, because you don't grow up in that kind of culture," said Mr Zhou, 40, who joined Ctrip.com International Ltd, China's biggest online travel company, speaking of his attempts to follow ice hockey. "How many Chinese play such sports?"

Mr Zhou worked as an equity analyst at Manning & Napier in New York and Green Street Advisors in California with an MBA from the University of Southern California's Marshall School of Business.

Asian-Americans, some 6 per cent of the US population, make up only 2.6 per cent of the corporate leadership of Fortune 500 companies, according to a study by DiversityInc. The number for Chinese natives is lower.

DRIVERS AND SUBSIDIES

Meanwhile, the offers in newly-wealthy China are increasingly attractive. "If you are a top talent in the market, we'll give you translators, drivers and housing subsidies," Zhu Yiyong, director of human resources at Ping An Securities Co. which will add as many as 30 jobs from overseas recruitment this year, said at a job fair in New York in November.

The picture is not entirely rosy for the returnees, not only because some must take care of aging parents.

They are also going back after a stock market rout last summer wiped out more than US$5 trillion and had the worst start of the year in at least two decades. The government also targeted the finance industry with arrests and investigations.

And those going back are experiencing a minor version of culture shock.

"I'm used to the American style of planning ahead, " Mr Su said. Meetings in China are often impromptu, he said. "And people tend to be late." He also noted that house prices in Shenzhen had risen 50 per cent the past year.

MORE OPPORTUNITIES

Tony Wan, a Chengdu native who worked as a quantitative analyst in New York for four years until very recently, said he didn't really mind.

"The chaos is a good thing because it means more opportunities," said Mr Wan, declining to name the bank where he works. "As long as you play smart, you won't have troubles."

Still, not all sea turtles have swum back for good. About 5 per cent of them will return abroad because they will find it harder to fit into their home country than they realise, according to Michael Page, a recruitment consulting firm. Some will spend their time between their two countries. They have their own Mandarin name - "seagulls" - meaning those who remain uncertain which country is their home.

BLOOMBERG