China’s leading economists are in high demand and short supply
Economists in a fast-growing economy are themselves hot commodities
EVERGRANDE, a Chinese property firm, is a big spender. It was until recently the country’s most indebted developer. It also owns a football club with one of the highest payrolls in China. It has extended its largesse to a new field: economics. Having founded an economic-research institute, Evergrande last month poached Ren Zeping, a star analyst with a big brokerage, to serve as its first chief economist. His annual salary of 15m yuan ($2.3m) is, based on available information, the highest ever for an economist in China. Not bad for a country where forecasting the official growth figures accurately has for years required little more research than reading the official growth targets.
Yet Evergrande is not alone in splashing cash in China, whether in property, football or, lately, economics. Competition for the best—or, rather, best-known—economists is fierce. The past half year alone has resembled a frenzied transfer window for their services. Besides Mr Ren, half a dozen other senior economists have jumped ship, mostly between brokerages.
Salaries for economists are rarely disclosed, but, judging from the few that have been reported, it is fair to assume that they are not struggling to make ends meet. Li Xunlei had been earning 9.9m yuan a year at Haitong Securities before moving to a rival late last year. Chief economists at China’s top brokerages tend to have salaries in the 6m-8m yuan range and pay is climbing every year, according to a blog on the website of Caijing, a respected financial magazine.
The most basic of economics explains why. China has a supply of just a hundred or so economists with long records of crunching numbers, interpreting policy, cultivating contacts and speaking to investors. And with brokerages and asset managers investing heavily in their staff as they professionalise, demand for their services is strong.
A supply response will, in time, slow the salary gains. A flood of talented graduates in the dismal science means that wages of junior analysts are much more subdued. But their prospects should still be bright— if they can master the art of the aphorism. One of Mr Ren’s recent quips was about China’s slowing growth as the economy matures: “the new 5% will be better than the old 8%”. For him and his rarefied peers, that is most certainly true.
This article appeared in the Finance & economics section of the print edition under the headline "Profits forecast"
Finance & economics December 14th 2017
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