In mid-August U.S. computer maker Dell laid to rest a consumer spat over mispriced products on the company's Taiwanese website. The company finally reached a settlement with the governmental Consumer Protection Commission when the Dell Greater China headquarters agreed that the Taiwanese consumers who had placed orders for the mispriced goods be granted a one-year 80 percent discount.

Wesley Hsu, Dell's general manager for Greater China Small and Medium Business, hints that the glitch could have been handled better had Dell Taiwan been in charge. Hsu, who hails from Taiwan, points out that Dell Taiwan has only a very limited say, while major decisions are made by management in Shanghai, the Asia-Pacific regional headquarters in Singapore and the general headquarters in the U.S. As a result, the company missed the golden moment of crisis management.

Yet Dell is not an exception.

More and more Taiwanese need to get used the new reality that their boss is in China and that decisions are made there too.

Given the huge potential of the Chinese market, more and more foreign companies view Taiwan as part of "Greater China" and therefore manage their Taiwanese business from their Greater China headquarters in Beijing or Shanghai. While foreign companies justify these moves as the "efficient use of resources," managers at the Taiwanese subsidiaries of these companies suffer from nightmares of being sidelined.

Job openings at foreign companies in Taiwan have continuously decreased over the past four years, according to statistics from 104 Job Bank, Taiwan's largest online recruitment service, with an 80-percent market share.

In July 2006, 752 foreign companies posted employee want ads, seeking to fill 8,023 jobs. In July this year, only 505 foreign companies were still looking for employees, and the number of job vacancies had dropped to just 4,528. Compared with the same period last year, job openings at foreign companies decreased by 35 percent in Taiwan – a substantially larger contraction than the 20 percent experienced in the job market as a whole. 

U.S. the Leader, China the Savior

After the financial crisis, the United States still remains the leader, but China is the savior. Manpower will migrate to China at an even faster pace," predicts Chin Li-ming, deputy general manager of 104 Job Bank, in describing the trend in the global labor market. Compared to Taiwanese companies, the employment demand of foreign enterprises has not yet recovered.

And even if there is some recovery, the human resources departments doing the hiring will not be in Taiwan, but in China.

And the problem does not stop at human resources.

"Each time when it comes to allocating advertising and marketing budgets, I really get angry," says Helen Wang, managing director of marketing industry publication Brain Magazine, lamenting that advertisers – that is, Taiwanese subsidiaries of large corporations – have little say anymore in their own marketing campaigns.

Within Asia, Taiwanese subsidiaries still put up a respectable performance, but no matter how valiant their efforts, they must settle for annual growth rates in the single-digit range, or be glad their operations are still in the black. In contrast, companies in China post growth rates of between 20 percent and 50 percent every year.

"In business meetings, the smiles of approval all go the other direction," says Wang.

Finnish handset maker Nokia switched its advertising contract this year to marketing giant Aegis Group. K.F. Lee, the Aegis Group's CEO for Greater China, points out that pitching an international campaign to an advertiser is a complicated process.

Nokia only distinguishes three Asian markets at the regional level – China, India and Indonesia, Lee reveals. "It can't denied that China is the most crucial and influential," she adds.

"Greater China" is having a greater say day by day. Two years ago the consumer products conglomerates Procter & Gamble and Unilever both set up centralized marketing operations in the city of Guangzhou, disbursing unified advertising budgets for the entire Greater China region from there. Since the beginning of this year, several international luxury goods and liquor brands followed suit. One American sports shoe maker even decided to put its general manager for China in charge of the Taiwanese market instead of establishing a general manager position for Taiwan.

Taiwan Just Another Part of China?

 "Once the two sides of the Taiwan Strait integrate even more closely, foreign companies will see Taiwan as no more than a part of China," says one high-tech analyst who used to work for a foreign enterprise.

He cites as an example IDC, a global provider of market intelligence, which once had 25 analysts working in Taiwan, but has retained only 15 now. Starting last year, IDC demanded that analysts in China look at industries jointly with their colleagues in Taiwan.

"Everyone is mentally prepared," the analyst says. "Once the analysts in China have learned the ropes, they might incorporate Taiwan into an Eastern China Region, or a Southern Coastal Region. Who's to say? "

Clearly, China's mid-level managers now in their forties are gradually maturing. As this new generation of managers moves up the career ladder, the Taiwanese, whom multinational companies preferred to hire in the past, will lose their competitive advantage in the Chinese job market. Patrick Huang, managing director for human capital consulting firm Watson Wyatt, frankly admits that in the under-40 bracket, Taiwanese employees are already losing out to their rivals in China.

In the past China faced a shortage of skilled professionals between 40 and 60, due to the Cultural Revolution, when higher education and investment in human capital were severely neglected. As a result, Taiwanese often rose to top management positions for Greater China. However, during China's rapid economic growth over the past decade, younger Chinese under 40 at the level of assistant manager were able to gradually accumulate experience and hone their professional skills. Projects in China involve bigger budgets than in Taiwan and are usually much more complex, which allows younger managers to prove themselves and quickly grow into more responsible positions. "Presently, the only demand (for Taiwanese) is in the top echelons of management," concludes Watson Wyatt's Huang.

Yet the Taiwanese compete not only with their Chinese counterparts, but also with a global workforce that is increasingly drawn to China.

Lee of the Aegis Group explains that in recent years not just Taiwanese but also people from the United States, Australia, Britain and other countries have been flocking to China to boost their careers. So nowadays one's boss in China is not necessarily a Chinese national, but very often a foreigner.

"In the eyes of these foreigners, China is another major international market where they can perform well," she says. In September Lee invited the four winners of an Aegis creativity contest in China to visit Taiwan. It turned out that just one member of the group was a Chinese national, while the others hailed from the United States, Britain and Hong Kong.

An Environment to Grow In

Amid this rush into China, 35-year-old Chen Chih-wei, senior assistant manager for central and southern Taiwan at HP Taiwan, last year decided to buck the trend and return to his home country.

Since joining HP upon graduating from the Department of Business Administration at Chung Yuan Christian University, Chen had changed jobs within the company every two years to gain a broad experience. In 2006 he was dispatched to China to serve China-based high-tech clients from Taiwan. Last year, HP Taiwan planned to reassign Chen to take charge of Taiwan's central and southern markets. At the same time HP China offered him another position at a 1.4 times higher salary, which would have put him in charge of business with all Taiwanese companies in China.

But he still decided to return to Taiwan. The reason was that the position in Taiwan offers a broader scope of responsibilities, because it entails marketing, distribution and strategic partnerships. Moreover, Chen will be able to liaise more with the Asia-Pacific headquarters in Singapore. "All the headhunters unanimously advised me to stay in China, but I felt that I still needed to gain more experience, and that getting my foot in the door on a good position was not as important," Chen explains.

Yet many interviewees who work on both sides of the Taiwan Strait still voice concern that in the long term multinational companies will allocate fewer and fewer resources to their Taiwanese subsidiaries, so that young Taiwanese will not have enough opportunities to get good on-the-job training. They are concerned that the talented and well educated will leave Taiwan and that the resulting brain drain might become the island's next serious concern.

"This is a problem that the government needs to consider as part of its industrial strategy," Lee urges. If Taiwan cannot nurture new industries, the young people won't have an opportunity to be trained and grow into responsible positions.

The boss in China is no longer only a workplace issue; it is a conundrum that in the future Taiwan will also face on the national level.

Translated from the Chinese by Susanne Ganz