EDMOND Min is the human face of Shanghai's ambitions to become a financial center on par with Wall Street and the City of London by 2020.

Min went to Hong Kong to earn an advance business degree after gaining a bachelor degree in microelectronics in Shanghai. He returned to his hometown recently to look for work in a city where major investment banks may offer salaries up to 500,000 yuan (US$74,000) a year to new graduates, nearly 10 times the average salary for other master's degrees.

"I got a business degree because I thought there would be unlimited prospects for a successful career in finance," he said. "There are jobs available, but not so many that require specialized financial skills."

His caution was stirred by the experience of friends with similar education backgrounds. Though some landed dream jobs, others didn't.

One friend decided to go back to school and get a doctorate after the only jobs on offer required little more than secretarial and marketing skills. Another, after a string of rejections, managed to get into the financial services industry by pulling strings through connected acquaintances.

"Most recruitment ads are too vague to tell you what they really want," said Min. "I have to talk to the employers personally to find a job here."

Potential

A report released by Goldman Sachs in late June states that workers in the financial sector in Shanghai comprise 3.3 percent of the city's work force. That compares with 8.5 percent in New York, 7.4 percent in Tokyo, 6.5 percent in London, 5.5 percent in Hong Kong and 3.1 percent in Beijing.

The report said that the relatively low proportion of financial professionals in China's biggest cities suggests that the job market in that sector has a lot of room for growth. In a city with a labor force of about 8 million, the gap would total about 200,000 people.

According to recruiters and school officials, the number of jobs available has recovered substantially since the global financial crisis but not yet to its previous peak.

"Three or four years ago, fund management firms and brokerages used to recruit as many as 10 fresh graduates in a single sector," said Fan Ying, director of career development of Shanghai Advanced Financial Institute of Jiao Tong University. "After a halt in recruitment last year, they are now posting one or two vacancies at a time."

Some recruitment agencies specializing in the financial services industry said vacancies posted on their websites have increased up to 20 percent a month this year. That followed a big slump immediately after the global financial crisis.

However, as many dismayed graduate students like Min are discovering, entry level jobs in the industry are often decidedly less glamorous and lower paid than they had hoped during their years of study.

According to a survey done by eFinancialCareers, a UK-based specialty recruitment website that launched its China version late last year, managers specializing in personnel, credit risk control and compliance services are among the hottest job vacancies.

"The world is demanding more trade with China as the influx of foreign direct investments here grows," said Gary Lai, an associate director with Robert Walters Shanghai, a branch of the UK-based recruiter. "There will be an increasing need for product offerings at banks, which will lead to higher demand for personnel managers, which will lead to bigger back-office staff."

Zhang Li, human resources manager at the Bank of Communications, agrees.

"Service is an essential part of finance," she said, "Banks like us need more people who can sense customers' needs, and explain the products without using technical jargon."

Search results from the three largest recruitment websites in China, 51job.com, Chinahr.com and zhaopin.com, showed that almost half of the positions posted under the finance sector involve sales and client management.

"Demand for such jobs may be large in terms of numbers," said professor Haiyan Wang, adjunct professor of strategy at the INSEAD business school. "For the development of Shanghai's financial services industry, the most important jobs will be those that make this industry more efficient for investors, such as jobs in accounting, financial analysis, and IT."

Gradual deregulation

The promise of a jobs bonanza for financial professionals is caught at the moment in a bit of a catch-22. On the one hand, Shanghai needs to open its markets if it wants to become a global financial center. On the other hand, government authorities harbor many fears about the repercussions of unleashing the forces of Wall Street on the now restricted and heavily regulated Shanghai markets. The slower the process of deregulation, the fewer the jobs.

Progress is under way if slow. Multinational financial institutions are increasing their presence as more complex financial products, especially in futures trading, are gradually allowed in Shanghai markets.

"We can see an across-the-board increase in recruitment, both in financial service institutions and also organizations in other industries," according to SHL, a consulting firm that recently opened an office in Shanghai.

"Domestic and international companies across all financial functions are enjoying the benefits from the high pace of China's economic growth and the recovery of the global economy," SHL said.

In a recent assessment co-written by Xinhua and the Chicago Mercantile Exchange, Shanghai ranked eighth among the world's top 10 largest financial centers, far down the list from London, New York and Tokyo. At the same time, Shanghai topped the list in potential for growth.

"As more and more companies get listed on the stock exchanges and as China's policy makers enact robust accounting and disclosure rules, companies will have to learn how to develop and use good accounting practices," said INSEAD's professor Wang. "Over the last 10 years in China, demand for accountants has grown faster than supply."

According to Gary Lai, an associate director with Robert Walters Shanghai, a branch of the UK-based recruiter, "the number of participants in the futures market is expected to grow exponentially, especially if and when there is a consolidation of the regulatory framework for China's financial industries. More demand will come with the relaxation of rules on joint ventures between foreign banks and domestic futures firms."

But caution still abounds. Many global financial companies have been taking a wary stance toward expansion in China. For them, there are still too many rules restricting investments instruments and market activities.

"It may take more than 10 years for Shanghai to become first rank financial center," said Rio Goh, senior consultant with Michael Page Finance, a Singaporean Dutchman who's been based in Shanghai for five years.

"But the future is certainly bright. In our opinion, opening up of the markets will provide more space for securities firms to get brokerage licenses, enabling trading of commodities futures, commodities, and the like."

Fearing instability and rampant speculation if the doors are flung open too wide, too quickly, Chinese academics are insisting that proper risk-management mechanisms need to be in place in tandem with market development.

"The current financial business in China can be compared with worn-out cars running on damaged highways," said professor Zhang Chun, director of Shanghai Advanced Institute of Finance. "If the speed of the car is to be raised, we must improve road conditions as well as enhance regulations to prevent accidents."

In that sense, there is still a lot of room for progress, he said.

Despite all uncertainties, Edmond Min still believes that strong government resolve to build Shanghai into a global financial center promises great opportunities for people like him to pursue financial careers.

"Ideally I want to find something where I can use my financial knowledge and analytical skills," said Min. "I'm also applying for jobs in Hong Kong through websites, though as an outsider, it's less likely to be fruitful."

MBA programs thrive on future growth prospect

Expectation for growth in the finance sector is driving business education in Shanghai, creating competition among financial students.

The Shanghai government invested 320 million yuan (US$47 million) to open the Shanghai Financial Advanced Institution in conjunction with Jiao Tong University early last year. Its enrollment has been rapidly expanding.

"We raised the limit of enrollment for MBA students from 120 to 150 this year because of the large numbers of applications," said the institution's Fan. "But enrollment of master's degree students in finance will be kept stable at around 35 until further notice from the government. We see a growing trend of students wanting to go into business and finance careers."

MBA enrollment at Fudan University is also reported to have expanded 30 percent this year.

Then, too, thousands of Chinese students go abroad every year to take MBA programs. Many of them may find job opportunities in the US and Europe restricted until economies there pick up a faster pace of growth. Those returning to China to look for work pose tough competition for domestic degree holders seeking the same jobs, especially on senior management or analytical positions.

"At the senior levels of a global financial institution, the ideal background for a person is to be dually embedded," said professor Wang. "Which is to be very much a part of China as well as to be very deeply knowledgeable about other major players in the global economy."

An almost perfect example would be Zhang Hongli who, until his move to the Industrial and Commercial Bank of China this year, was the China chairman for Deutsche Bank. Zhang gained solid experience at Goldman Sachs and Deutsche Bank. At the same time, he was also a member of the National Committee of the Chinese People's Political Consultative Conference as well as a financial advisor to Beijing and the governor of Heilongjiang Province.

Recruiters said that almost all of their job postings are seeking local talent.

"When international financial institutions seek to develop in China, they need local talent who can establish and maintain a good client network and who can help them comply with local regulations," said George McFerran, head of Asia Pacific for eFinancialCareers.

Still, "returnees from abroad are still highly preferred by foreign firms for their language proficiency," said Michael Page Finance's Goh.

(Simon Mortlock contributed to the story.)