As China overtakes Japan as the second largest economy in the world, the country is suffering a talent mismatch, according to David Arkless, executive board member at Manpower and vice president of the China International Council for the Promotion of Multinational Corporations (CICPMC).

China has moved ahead of its Asian neighbour with Japan’s economy growing by just 0.4% in the second quarter of the year.

Arkless told Recruiter that China is experiencing growth in all areas but domestic talent is not keeping pace with demand.

“One of the issues that China has is that it has plenty of skills but not enough people with the right skills at the right time, which is causing a talent shortage in most sectors. The financial sector is growing fast as is infrastructure and the services sector is booming. There is broad demand right across the board.

“The rise to number two and the inevitable rise to number one was always going to happen. It has happened more quickly due to the recession that has hit Japan.

“The US is recognising that China is going to be of equal status in terms of its economy and it is bracing itself to become number 2. It will be interesting when that happens in around 2028.

Richard Goddard, managing director, technology at RP International, which has an office in Hong Kong, adds: “Over the last decade China has gradually seen increasing numbers of multinational corporations migrate their Asia Pacific headquarters into China from the more traditional hubs of Hong Kong and Singapore.

“This trend is set to continue as China aggressively grows its services based industries and continues to attract increased investments as western organisations seek growth outside of their flat domestic markets. With increasing importance placed on translating China investments into profitable returns, organisations continue to fight for talent which can effectively bridge and deliver on the needs of western organisations within a complex China marketplace.”