Chinese language proficiency and income attainment among foreign professionals in China

Previous research in developed countries shows a positive link between host-country language skills and immigrant income. However, little is known about this relationship in developing countries. Analyzing data from 501 foreign professionals in Guangzhou and Shenzhen, China, this study explores the link between Chinese language proficiency and income across different sectors. Unlike in developed countries, findings indicate no positive association; in fact, higher Chinese skills are negatively related to income in state-owned/public and foreign-owned firms. The results suggest that the benefits of local language skills depend on sectoral structures and institutional contexts in developing countries.