There's no ready answer to this in either the Art of War by Suntze or the Harvard Business Review. But the clear trend is that more and more executives with mainland backgrounds are being commissioned to lead international companies' China operations.

Contrast this with the situation a decade ago, when the talent crunch hobbled multinationals (MNCs) were just entering the China market. With very little exposure to Western practices, a manager from the mainland could hardly expect to be put in charge of local operations.

From 1985 to 1995, mainland-born executives made up only 3 percent of MNCs' senior management teams in China. But in 2005, they accounted for 35 percent, finds a study by executive search firm Heidrick & Struggles.

According to Bill Gu, managing director of Korn/Ferry International (Shanghai), most MNC clients "are expressing strong desire" to find and hire a local to head their China operation.

Hunting for locals to run MNCs' China ventures already accounts for a "significant" portion of the business of Korn/Ferry, the first international search firm to set up a joint venture in China.

The main perceived advantage of local team leaders is that they understand the China market better and are more capable of breaking down the cultural barriers within the team.

Brian Lu was chief of NEC Telecom China for two years and then general manager of Motorola's mobile phone business in the country before becoming vice-president of Apple Inc to oversee Asian sales last year.

Zhou Xiaoyang had scant knowledge of the Korean language before he was hired in 2002 as the general manager of Samsung's mobile phone unit in China.

Mainland-born David Wei (or Wei Zhe) became the president of Kingfisher Plc's B&Q in China in 2003 when he was only 31, the youngest Chinese to head a fortune 500 company.

Jing Wang climbed the corporate ladder even quicker: he was made the chairman of Qualcomm's Asia-Pacific operations last year after leading the company's China business for three years.

All these corporate bigwigs were born in the mainland and had their early education here.

However, as the supply of talent has grown, so has demand. The competition for home-grown management talent has got increasingly fierce. Gu from Korn/Ferry says in many cases the jobs had to be finally handed to overseas executives because of the shortage of middle- to senior-level managers capable of working in an international environment.

It's a "major problem for domestic and foreign-invested companies", according to a White Paper by headhunter ManPower, which even warns that "not finding and keeping the right people is putting a halt on growing their (MNCs') business".

So far, mainland-born executives have been gaining importance in only the new-economy industries, such as telecoms and the Internet. In traditional industries, such as pharmaceuticals, power and chemicals, most top posts are still held by Westerners and non-mainlanders.

To make things worse for multinationals, from time to time local executives jump ship to domestic firms. Wei from B&Q has recently joined Chinese e-business company Alibaba. Tu Min, former vice-president of Ericsson, greater China, has assumed the post of CEO at FrameMedia, controlled by the local outdoor advertising company Focus Media. Jun Tang, former president of Microsoft China, has chosen to lead local online gaming operator Shanda Interactive Entertainment.

The pay is sometimes higher at local firms. Tang received 2.66 million stock options of NASDAQ-listed Shanda. According to Chinese-language media, between June 14, 2005 and February 22, 2006, he sold 323,000 shares for more than $10 million.

ManPower says the attrition rate in China is 25 percent greater than the global average at the management level. Job-hopping such as these at times force MNCs to send people from outside to the mainland to fill the vacancies. Wei, for instance, was succeeded by a European executive.

According to Cartus, a US-based company focusing on workforce development, China is the third-most common destination for relocation assignments, trailing the US and the UK. But the country could overtake UK this year and US the next for the top spot.

But most MNCs try to avoid sending in expats as it entails much higher allowances. Cartus says the demand for language and inter-cultural services to families of executives assigned to China has doubled in the past three years.

But that, in a way, is luring "returnees", namely mainland-born executives who sought graduate education overseas and have since gained some work experience, especially in North America and Western Europe.

Western MNCs have two broad choices: they can either select a local who may not have the necessary experience and cross-functional expertise, or spend more to bring in somebody from Taiwan, Hong Kong, Singapore or their Western headquarters, says Louise Goss-Custard, a consultant with Russell Reynolds Associates, a US-based executive search firm.

There is a pool of individuals called "early returnees", who returned to the mainland in the 1990s and have gained significant hands-on experience in team leadership in China, "but they are typically very expensive", says Goss-Custard.

Head start

These English-speaking "early returnees" such as Qualcomm's Wang would suit the MNCs perfectly as they know the local language and culture and also have a global business vision.

Wang, 45, graduated from a University in East China's Anhui Province in 1981 and continued his postgraduate study in Beijing before going to the United States to study law. Prior to joining Qualcomm in 2001, he served as Director of Asia Practice Group for years at the law firm of Reed Smith.

"Much of my work was dealing with CEOs and chairmen, including those from Qualcomm, to help them handle legal and regulatory issues in business transactions in the Asia-Pacific region," he says. That helped Wang to learn to think like CEOs, a quality many mainlanders lack.

A Westernized mainlander might be the best choice for MNCs to run local operations, says Wang, who is now also involved in executive recruitment in the Asia-Pacific region for Qualcomm.

But even these executives have their own share of problems. "Many locals, even those proficient in English, still have difficulties communicating with Westerners and the headquarters. The problem is accentuated when they are trying to sell their ideas to Westerners as they have yet to learn to think like them," Wang says.

Apple Inc's CEO Steve Jobs is one of the few MNC chiefs who have never paid a visit to the mainland. Although many blame it on the mainland's small contribution to the company's revenues, some analysts blame the local management team for failing to communicate to the US headquarters the importance of the mainland market.

To bridge such gaps, some companies have started sending talented local junior managers on rotation to headquarters or to third-country operations to accelerate their development and help them acclimatize to international and multi-ethnic work environments. Goss-Custard's research has found that this method can be a highly effective tool but such assignments need to be of "at least two years to have an impact".