It's neither cultural conflict or regional disparities; nor regulatory hurdles or lack of potential.

It's people, specifically, talent. And how to find and hold on to them.

In a survey of 150 companies conducted in the fall of 2005 by Hewitt Associates, 95 per cent indicated that acquiring, retaining and managing leadership talent in China was necessary for success. More than half said it was a "critical" aspect of business and currently restricting growth.

Another survey of about 100 companies in China, mainly multinationals, by HR consultancy Mercer, shows 54 per cent say the turnover rate of their operation unit rose in 2005 and 42 per cent of the companies acknowledge there is a similar trend in supporting units such as finance and human resources.

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