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Rapid economic growth in China is fueling demand for talented employees, driving up compensation packages sometimes to global levels. The decrease in the birth rate over the last generation means fewer young people, but they are better educated than the over-40s. The challenge for multinational companies in China is to recruit and retain employees. Ethnic Chinese managers from Taiwan, Hong Kong and Singapore have commanded pay premiums but there is now a transition towards localization. This report enumerates best practices (such as short-term international assignments to improve international management skills) for hiring, developing, and retaining employees in China.