Recruiting in China

China's Ministry of Human Resources and Social Security announced the country's 2017 monthly minimum salary standard and hourly minimum salary standard among 32 provinces and cities.

According to the data, Shanghai's monthly minimum salary was top in the country last year, with its full-time workers at least earning 2,300 yuan ($364), and Beijing's part-time workers earned the highest hourly minimum salary at 22 yuan.

Monthly minimum salaries in Shanghai, Shenzhen, Zhejiang, Tianjin and Beijing have broken 2,000 yuan, and Beijing, Tianjin and Shanghai's hourly minimum salary has also reached more than 20 yuan.

Last year, 20 provinces and cities increased minimum salary standards, with an average increase of 11 percent from 2016.

This year, many other regions in China, including Jiangxi, Liaoning, Tibet and Guangxi, have all enhanced their minimum salary. Guangxi increased its minimum by 20 percent.

Shanghai announced it will increase its monthly minimum salary standard by 5 percent to 2,420 yuan per month starting April 1.

The average pay for college graduates has gone up by 7.4 percent year-on-year, according to a survey published Wednesday by China International Intellectech Corporation, a State-owned human resources company.

The survey shows the pay for college graduates this year is 4,854 yuan ($741) for graduates, 6,791 yuan for postgraduates and 9,982 yuan for PhD graduates.

The salary in first-tier cities is 5,218 yuan for graduates, 7,612 yuan for postgraduates, and 10,077 yuan for PhD graduates.

It indicates 47 percent of the employers have hired more people this year, while 21 percent cut down on their recruitment numbers.

Sixty two percent of the polled enterprises said hiring desirable employees became more difficult this year, due to excessively high expectations of graduates and low name recognition of employers.

The survey polled more than 2,800 enterprises in sectors including finance, internet and manufacturing.

A record 7.95 million graduates entered the workforce this year.

Real wages in China saw an annual average growth of 10.6% in the last 8 years, the highest among the G20 countries, according to a research report by Korn Ferry Hay Group.

China’s salary growth was followed by Indonesia (9.3%), and Mexico (8.9%). The worst were Turkey (-34.4%), Argentina (-18.6%), Russia (-17.1%), and Brazil (-15.3%). Growth averages for all other developed nations fell in between these figures.

“In the countries that are seeing tremendous salary growth, the issue is supply and demand,” Benjamin Frost, Korn Ferry Hay Group Global Product Manager, said. “With countries like China seeing a whopping 75.9% GDP growth since the beginning of the recession, universities and corporations simply can’t train people fast enough. This leaves an acute talent shortage and points to the reason skilled employees are seeing steep pay increases.”

The firm’s research focused on the G20, nations with the world's leading economies, and compared inflation-adjusted pay and GDP in each. The US fared poorest in pay recovery among Western developed nations. Canada’s recovery was the best, with 7.2% real salary growth on average and a GDP gain of 11.2%. Other developed nations experienced flat to modest real salary growth, with Australia at 5.9%, France at 5.2%, Germany at 5%, Italy at 2.4%, and the UK down 0.1%.

“While global economists point to this recovery overall as one of the worst in history, there are political, economic, and social reasons for the disparate salary fluctuations in different countries,” Frost said. “It examined how salaries have fluctuated globally since Lehman Brothers fell eight years ago, marking for many experts the start of the worst economic crisis and recession in generations.”

The Korn Ferry Hay Group pay data was drawn from the firm’s PayNet database, which contains salary and job data for more than 20 million workers in more than 25,000 organizations across 110 countries.

The departures come as the banking industry struggles against strong financial headwinds.

China’s biggest banks have eliminated thousands of jobs in the past six months to June 2016, as the nation’s banking industry, despite avoiding the huge fines for compliance breaches that weighed on their Western peers, has seen a challenging year amid a sluggish economy, lower interest margins and top-down financial reforms.

Big banks in China have announced almost 1.62 million new job cuts this year, and thousands more are expected, as the wave of lay-offs that began in 2013 shows no sign of abating.

So far, 10 out of the 16 listed mainland banks have reported a headcount drop. The top six listed banks, which reported their weakest profit growth in a decade, have cut a combined total of 34,691 jobs in the first half of the year, the semi-annual reports of the banks showed. This marks the biggest scale of employee departure ever recorded in China’s banking sector, which has expanded uninterrupted over the past 10 years.

Salaries are also going down
According to several media reports, many banks have been easing staff for different reasons, with China Merchants Bank scaling back the most, cutting 10 per cent of its workforce. Bank of China said its headcount at the end of June 2016 had decreased by 6,881 to a total of 303,161 employees. Agricultural Bank, the nation’s biggest bank employer, lost 4,023 staff while Industrial and Commercial Bank of China cut back by 7,635. China Construction Bank also shed 6,721 staff to 362,462.

Besides a reduced number of workers, salaries are also going down as Chinese banks’ profits slid 3.5 per cent on the year, while the four state-owned banks reported profit growth below one per cent. In addition, the first-half data showed that Industrial and Commercial Bank of China, Agricultural Bank of China and China Construction Bank reduced their salary expenses, including salaries, bonuses, allowances and post-employment benefits, by 1.6 percent, 2.9 percent, and 2.18 percent respectively.

Compensation structures are generally different in Chinese banks compared to their Western peers. For example, the average annual income for a mid-level banker can typically range between $100,000 to $125,000 while similar international counterparts offer more than double those salaries. They also offer longer holidays and fewer travel curbs, while Chinese staff can only get five days annual leave and must request approval from authorities before being allowed travel abroad.

SHANGHAI employees saw their salaries increase 6.7 percent on average in the first half of the year, but the raise was the lowest of all China’s first-tier cities, according to a survey.

Pay rises in Shenzhen, Beijing and Guangzhou ranged from 7.1 percent to 8.8 percent, while the average level in second-tier cities was 7 percent, according to the survey by China International Intellectech (Shanghai) Corp.

It said 64 percent of Shanghai companies said they had increased pay for all employees, second only to Guangzhou, and no decreases were reported.

The state-owned human resources agency said the Shanghai increase was no surprise given that city pay levels were already high.

“The cost of employing people in Shanghai is very high after decades of fast growth,” said the CIIC survey center’s Pang Limin.

“The result matches our prediction of from 5 to 7 percent at the beginning of this year.”

Across the country, average pay rises dropped to 7 percent from 8.7 percent in the same period last year.

Pang attributed to the downward trend to China’s slowing economy.

Real estate replaced the Internet industry at the top of the pay rise list with an increase of 8.6 percent following a surge in house prices.

Pang said companies in Shanghai were entering a period of low pay rises as they had more mature human resources management systems with multiple staff incentives and flexible benefits, such as stock shares and allowances.

“Employers in other cities are learning such practices but they depend more on salary adjustment at this moment,” she said.

There were also more foreign ventures in Shanghai while Guangdong had more local private companies, which had the highest increase in the survey, Pang said.

Only 39 percent of companies surveyed in Shanghai said they would expand recruitment with budget increases for recruitment of 22 percent, both lowest of the four first-tier cities.

Shanghai overtook Beijing to be the best paid city for white-collar workers in the first quarter of this year, recruitment portal Zhaopin.com said yesterday.

White-collar workers in Shanghai were the best paid on the Chinese mainland with a monthly average salary of 8,825 yuan ($1,362), followed by Beijing at 8,717 yuan.

Shenzhen was third at 8,141 yuan, Zhaopin.com said in a report based on job positions posted on the website.

The best paid jobs in Shanghai were in professional services such as treasury, legal and human resources drawing an average monthly salary of 13,449 yuan, ahead of 13,049 yuan paid for positions in the energy sector.

Joint ventures and listed companies were the most generous employers, while private companies and government-backed organizations paid the lowest salaries, the report said.

But state-owned companies remained the most popular among job seekers who preferred stability.

A worker at a furniture workshop in Dongguan, Guangdong Province.

Cases of salary cuts or pay defaults involving migrant workers increased by 34 percent in the first three quarters, partly due to the ongoing economic downturn, according to a trade union official.

Zhang Bo, an official at the All-China Federation of Trade Unions, said such cases and other violations of workers' rights are still rampant, especially in Guangdong, Anhui and Heilongjiang provinces and the Inner Mongolia autonomous region.

"They are no longer limited to the construction industry?they have spread to the manufacturing sector as well," he added.

According to the business news website Yicai.com, only 30 percent of manufacturing companies can pay wages on time. Many such companies are facing financial strains and are having to make huge layoffs.

Last year, there were 274 million migrant workers in China, with an average monthly income of 2,864 yuan ($572.8), according to a National Bureau of Statistics report released in April 2014.

The report said 0.8 percent of the migrant workers, or 2.19 million, could not receive their pay on time.

The average salary amount in default was 9,511 yuan. More than 60 percent of the migrant workers did not sign labor contracts with employers.

Zhou Litai, a lawyer specializing in protection of migrant workers' rights and interests, said the situation this year could be even worse because the economic downturn has affected many traditional industries.

"The wage cuts and defaults happened mostly in the construction sector. Most migrant workers cannot get their money until a project is completed," said Zhou, who is based in Chongqing.

"Many projects were illegally outsourced several times before they were officially started.

"What is worse, some project contractors borrowed money from loan sharks. When they receive payment for the project, they have to pay the loan sharks first, and then have no money for the migrant workers," Zhou said.

Zhang said his federation would support the government in establishing a monitoring and warning system on salary-related issues to help migrant workers get paid. "Some local trade unions also explored a new mechanism to ensure migrant workers receive payment. For example, the union in Shanxi province has set up a fund that will pay migrant workers first before getting the money back from their employers."

Yang Yuanqing, CEO of Hong Kong-listed Chinese computer technology company Lenovo Group, topped the 2015 Chinese Hong Kong company CEO salary list released by Forbes China, the daily newspaper Beijing Times reported on Wednesday.

Yang was the richest CEO in 2014 with an annual salary of 119 million yuan ($19 million), putting him in first place for the third consecutive year, according to the report.

This year's list included 334 CEOs of companies from the Chinese mainland that are listed in Hong Kong whose annual salaries exceeded 1 million yuan, up 107 from the previous ranking.

Forbes also released a 2015 Chinese A-share company CEO salary list, on which Ma Mingzhe, chairman of Ping An Insurance Co, was in first place with an annual salary of 109 million yuan.

The average per capita income of Chinese households continued to rise in the first quarter of the year, the National Bureau of Statistics (NBS) said Wednesday.

Average per capita household income rose 9.4 percent year on year to 6,087 yuan (992.30 U.S. dollars), recording 8.1 percent growth after inflation.

The household income growth rate for 2014 was 8 percent.

Per-capita disposable income for urban people hit 8,572 yuan, up 8.3 percent. The growth rate was 7 percent in real terms.

Disposable income for rural residents stood at 3,279 yuan, up 10 percent. In real terms, it climbed 8.9 percent.

The income gap narrowed with urban residents earning on average 2.61 times more than their rural counterparts, down from a calculation of 2.66 in the same period last year, according to the NBS spokesman Sheng Laiyun.

Income growth surpassed gross domestic product (GDP) growth in the first three months, which clocked in at 7 percent, down from the 7.3 percent registered in the fourth quarter of 2014.

This still meets the official annual growth target of around 7 percent for 2015.

China created 3.2 million new jobs in urban areas in the first quarter, said Sheng, adding an NBS survey showed that China's urban unemployment rate was "stable" at around 5.1 percent, unchanged from the rate in 2014.

The consumer price index, the main gauge of inflation, in the first quarter averaged 1.2 percent, the lowest since the fourth quarter of 2009 and lower than the government target of 3 percent, NBS announced Friday.

Under pay reform measures which took effect Thursday, salaries and expense accounts have been slashed for senior executives at 72 centrally administrated State-owned enterprises (SOEs).

For many years, a widening gap between executive salaries and the wages of ordinary workers has been a major source of public discontent. Obviously, the new year's salary reduction measures signify an important step toward social equality.

Nevertheless, some worry that mid-level managers could potentially outearn their bosses. Others believe ordinary staff may soon make more than their supervisors. In reality, those who contribute the most should be compensated more for their work, regardless of their standing within a company.

Of course, pay gaps exist throughout the State sector. Through their connections with Beijing, employees at central government-led SOEs typically enjoy higher pay and better working conditions than their peers in non-central SOEs.

To further promote fairness, relevant authorities should consider reducing salaries not only for senior executives at centrally administrated SOEs, but for rank-and-file workers at such enterprises as well.

The corporate reporting season for China’s largest state-owned enterprises, which concluded last month, featured an unusual theme. Despite earning far less than their international counterparts, the men who steer the country’s largest companies welcomed recently announced plans to cut their pay.

“The biggest difference between China and western countries is that we pursue the goal of getting rich together,” Fu Chengyu, head of the country’s largest refiner, told reporters. “If you want to earn big sums, you should not be an SOE executive.”

As Sinopec chairman, Mr Fu earned Rmb863,000 ($141,000) in 2012, a paltry figure when compared, for example, with the more than $3m earned by Christophe de Margerie at the French oil major Total. The contrast in other sectors is even starker. The president of Bank of China, one of the country’s “big four” lenders, was paid Rmb997,000 ($163,000) last year – or less than 1 per cent of the $20m pocketed by JPMorgan’s Jamie Dimon.

According to local media reports, leaders of the country’s top 50 SOEs will face pay cuts of up to 60 per cent as the government imposes an annual pay cap of Rmb900,000. President Xi Jinping announced plans to rein in executive pay in August, but the new guidelines have not yet been released by the ministries of finance and human resources.

In August Zhang Yun, president of Agricultural Bank of China, said he would “firmly support and strictly implement the decision”. Mr Zhang, who earned just over Rmb1m in 2013, faces a pay cut of at least 10 per cent.

Those who welcome Mr Xi’s initiative, which coincides with China’s most ambitious anti-corruption campaign, argue that it is misleading to compare SOE executives with their international counterparts, especially in industries that are protected from overseas and private sector competition.

“SOEs enjoy a lot of policy support from the government,” says Gao Minghua, a corporate governance expert at Beijing Normal University. “Those factors must be removed before you can compare SOE executives to multinational executives.”

The more important comparison, he adds, is between SOE executives and their own employees: “There is a large income gap in China that is having a negative impact on society. The salary gap between senior executives and average employees must be appropriate. If too small, it will lessen executives’ initiative. If too big, it will lead to social instability.”

According to a recent pay study co-authored by Mr Gao, senior executives at listed Chinese financial companies are paid 50 times as much as the average worker.

“It doesn’t make sense to benchmark Chinese SOE executives against western – and especially American – executives,” agrees Kjeld Erik Brodsgaard, director of Asia research at the Copenhagen Business School. “None of these guys are ever going to become the head of GE or a big American financial institution. They stay in China and move around as civil servants. In a Chinese context they are supermanagers.”

Mr Fu at Sinopec is a classic example of a Chinese supermanager. He had previously run China’s largest offshore oil company, Cnooc, and his transfer to Sinopec was decided neither by the refiner’s board nor by the State-owned Assets Supervision and Administration Commission.

Better known as Sasac, the government commission is nominally charged with administering China’s largest SOEs; in fact, it is overshadowed by the Communist party’s powerful Organisation department, which both transferred Mr Fu to Sinopec and appointed his successor at Cnooc. “Sasac was supposed to manage and control these companies but it never really happened,” says Mr Brodsgaard. “Sasac was not authorised to receive dividends from these companies and doesn’t even appoint their chairman and chief executives.”

Sasac’s authority was further undermined last year by the arrest of its former head, Jiang Jiemin ; the former SOE oil executive was caught up in a larger investigation into his patron, Zhou Yongkang, who once sat on the Communist party’s all-powerful standing committee and ran China’s domestic security services.

Additional reporting by Wan Li

Expected salary of university graduates has fallen to 3,680 yuan per month, a record low in past four years, the Beijing News reported on Wednesday.

According to China Graduates Employment Pressure Report of 2014 released by Beijing Youth Stress Management Service Center, the expected salary was 5,537 yuan in 2011, almost 2,000 yuan more than this year.

It also shows that there are more than seven million university graduates this year, the highest number in history. However, salary and employment pressure are at the lowest in past four years.

Although the expected salary this year was a slight drop compared to 2013, but seen against the 5,537 yuan in 2011, the decline was substantial.

Meanwhile, with the drop in expected salary, the employment pressure also fell from 18.17 percent last year to 16.91 percent in 2014.

The average monthly wage for China's 166 million migrant workers rose 13.9 percent last year, said the Ministry of Human Resources and Social Security on Thursday.

Migrant workers, defined as those who have worked away from home for more than six months, earned an average of 2,609 yuan (429.2 U.S. dollars) per month, said the ministry.

China had a total of 269 million farmers working in non-agricultural sectors by the end of 2013, up 2.4 percent year on year, according to the ministry.

Chinese students possessing a degree from an overseas university do not necessarily receive a similar wage when seeking jobs at home, with a huge gap of up to 100,000 yuan (US$16,400) existing between them, a recent survey shows.

Their salaries are instead determined by their work experience during their time abroad, a survey conducted by the Beijing-based EIC International Education revealed.

The survey found that a Chinese job seeker with less than five years of overseas work experience receives an annual salary of 165,000 yuan (US$27,100), while individuals with at least five years working experience abroad can command a salary of up to 267,100 yuan (US$43,900) a year.

Most of the positions offered by Chinese companies do not specify a requirement for a domestic degree or a foreign degree, the EIC International Education said, while 62% of recruiters placed greater emphasis on a candidate's professional skills when hiring rather than merely whether they hold a foreign diploma. Around 84% of the Chinese firms polled stated that they considered job seekers who had overseas experience, innovative abilities and proficiency in a foreign language.

It is not an easy task for Chinese students to find work overseas, however. A total of 38.9% of the respondents said the major obstacle they faced while looking for jobs in a foreign country was the prevailing local economic situation. Moreover, their possession or lack of cross-cultural social abilities also affected their chances of working abroad, accounting for 33.6% of the total polled respondents.

Meanwhile, the dropout rate of Chinese students at Ivy League schools in the US, including Harvard, Yale, Cornell and Columbia was as high as 25% this year, according to Li Zhu, president of EIC International Education. Li said that some Chinese students are unable to adapt to the educational system and the language requirements in western countries.

The survey was conducted over a nearly six-month period. A total of 9,173 valid responses were collected from industries, such as finance, education, healthcare, real estate, tourism and science in 23 cities across China, including Beijing, Shanghai, Guangzhou and Shenyang.

Newly released official data about pay rises in the 2007-2011 period has stirred online debate over the figures’ accuracy, with many believing the increases are not remarkable enough considering inflation and surging housing prices.

The Chinese Academy of Personnel Science on Thursday published a report on the development of human resources in China, showing that the average annual salary of urban employees increased from 24,721 yuan (US$4,022) in 2007 to 41,799 yuan in 2011, up 69.1 percent.

In 2012, the average yearly salary for urban employees in non-private sectors stood at 46,769 yuan, up 9 percent year on year after deducting price factors, according to the report.

The news triggered heated discussion soon after appearing on popular Chinese websites — most netizens questioned the figures in the context of their own lower salaries and deemed the data useless amid surging expenditure.

“I feel ashamed that my salary is again below the average level” was a common comment on Sina Weibo, one of China’s most popular Twitter-like services.

Microblogger “joys” said: “After carefully rechecking my paychecks, I am sure that I was ‘averaged’ with other rich workers.”

In fact, many indicated the high salaries only belong to civil servants and employees at state-owned enterprises and monopolies.

Meanwhile, the debate turned against the relatively larger growth in prices, especially in the real estate businesses.

According to the National Bureau of Statistics, China’s consumer price index, the main gauge of inflation, increased 2.6 percent year on year in August, a slight decline from 2.7 percent in July.

The CPI rose 2.6 percent year on year by the end of 2012, but it was a rise of 5.4 percent in 2011 from the previous year, well above the government’s full-year inflation control target of 4 percent.

On the other hand, driven by rapid urbanization and speculation, China’s property market has taken off in recent years, especially after the economic stimulus policies the government unveiled in 2009 to help the country weather the global financial crisis.

The China Index Academy, a leading property research institution, said the average new home price among 100 cities stood at 10,554 yuan per square meter in September, up 1.07 percent from August and an increase for a 16th consecutive month.

BEIJING (Caixin Online) — Competition for fresh-faced university graduates is heating up in China’s telecom sector now that electronics equipment giant Huawei Technologies Co. has significantly hiked salaries for certain white collar employees.

The pay decision is also a signal that the world’s largest manufacturer of telecom gear remains committed to an ongoing expansion that encompasses new arenas, such as consumer smartphones.

First-year worker and junior executive paychecks were pushed up by as much as 35% in August following a July 29 announcement by the Shenzhen-based company.

Just a week earlier, Huawei’s biggest domestic rival, ZTE Communications HK:763 -0.13% CN:000063 -2.18% ZTCOY -0.27% , unveiled a new equity incentive plan designed to retain key white collar workers. The company said it would distribute about 103 million company shares as bonus compensation for 1,531 select employees.

Huawei’s pay hikes not only upstaged ZTE’s highly touted incentives program but also brought its salary scale a notch closer to levels offered in the country by foreign competitors including telecom multinationals Ericsson, Nokia NOK +0.25% FI:NOK1V +1.08% , Siemens XE:SIE +0.26% SI +0.12% and Samsung KR:005930 +0.97% SSNLF +2.50%

Probationary salaries for 2014 college graduates hired by Huawei will rise to more than 9,000 yuan ($1,470) per month from 6,500 yuan USDCNY -0.01% . Master’s degree graduates will be offered more than 10,000 yuan a month to start, up from 8,000 yuan, the company said.

Altogether, Huawei said it would boost the companywide payroll by more than 1 billion yuan. Performance-related pay hikes will range from 25% to 30%, depending on the type of work.

Management thus hopes to attract and retain employees in a competitive labor environment where Nokia, Siemens and other foreign companies generally offer new bachelor’s degree graduates at their China divisions between 8,000 and 10,000 yuan per month, said Wei Xiaokang, a headhunter for Beijing-based Offercome, which focuses on matching jobs and job seekers in the Internet industry.

“Huawei’s workplace environment is more intense than that of Ericsson and other multinational companies,” Wei said. “But the pay is lower.”

Huawei has also been fishing for talent in ZTE. Indeed, according to a ZTE source, the Huawei pay increases “drove ZTE (management) crazy” because in the first half of 2013 “a number of people” left ZTE for jobs at Huawei.

ZTE employs an estimated 50,000 to 60,000 people, one-third as many as Huawei.

“Raising junior executive salaries on such a large scale, as Huawei has done, undoubtedly marks a significant change in remuneration policy,” said Wei.

And it’s a surprising change for the company’s labor policy considering the weak business atmosphere in the telecom industry, where of late many companies have been downsizing, trimming costs and reducing product lineups.

Financial strength

Huawei was apparently in a better position to raise wages than its rivals thanks to high revenue growth during the first half of 2013, says Deutsche Telekom International Consulting’s director in China, Fang Honggang.

Privately held Huawei, which releases only sales revenue and net profit margin figures in its financial statements, reported “relatively optimistic… accounts receivable, bad debt treatment and possible risks,” Fang said.

Huawei reported sales of 113.8 billion yuan for the first six months of the year, up 10.8% over the same period of 2012. Moreover, company management forecast a 2013 net profit margin of 7% to 8%.

A Renmin University professor who also serves as a Huawei corporate management adviser, Wu Chunbo, said the company’s first half 2013 net profit was 14.3 billion yuan.

With the company on a sound financial footing, management was well prepared to turn attention to making junior executive salaries more competitive, a Huawei representative said.

A few years after finishing university, Jack Dai thought he had scored the holy trinity of success for a young Chinese man: a government job, an apartment and a wife. But he had not counted on one additional factor, less visible from the surface, that soon drove a wedge between him and his conception of the good life.

To buy his Shanghai house, Mr Dai, 30, took out a hefty mortgage. Monthly repayments now swallow up half his salary. Plus he has the other expenses of Chinese middle-classdom – overseas holidays, shopping excursions, movies and restaurants.

Mr Dai is hemmed in by debt. “Every second month or so, I can’t pay off my credit card bill. I save nothing,” he sighs.

This experience for a young professional, hardly unusual in the west, is a radical departure for China. The older generation, that of Mr Dai’s parents, was famous for its saving prowess. Memories of deprived childhoods in the Maoist era led them to squirrel away most of their earnings even as their fortunes improved alongside China’s fast-growing economy from the 1980s on.

But the young urban Chinese who have entered the workforce over the past decade grew up amid plenty, and their views about saving and spending bear little resemblance to those of their parents. Their willingness to borrow for today and worry about repayment tomorrow is beginning to reshape China’s debt dynamics.

The plan to import 330 labourers for the Mai Po railway tunnel has come under fire by the unions who charge that the move would help bosses suppress the wages of local workers.

The Labour Department recently approved an application by the contractors of the high-speed rail link between West Kowloon and Shenzhen to bring in 330 people who have been working on the mainland section of the line to fill the job vacancies.

The chief executive of the Confederation of Trade Unions Mung Siu-tat said the "so-called" vacancies were created by the contractors suppressing the wages for the jobs.

"The job vacancy was such a lie," said Mung, adding that data from the Census and Statistics Department showed the unemployment rate in the construction industry was 6 per cent in the first quarter of 2013, which was almost double the city's overall unemployment rate of 3.4 per cent.

A department spokesman said the government would consult relevant unions before it decided whether or not to approve the import of non-local workers.

But Mung said his union was not consulted or informed until the authority officially approved the plan earlier this month.

Another unionist said the contractors had failed to recruit local workers for the project because they were offering a salary much lower than the average rate in Hong Kong.

Wong Wai-man, chairman of the Bar-bending Industry Workers Solidarity Union said employers were offering bar benders and steel fixers HK$1,076 a day, which is about 30 per cent less than the average of HK$1,514.

Wong said he was worried that importing the non-local workers would create a vicious cycle in the industry.

"The wages will stay low. Young people will then be reluctant to become a construction worker. In the end there will seem to be more job vacancies, and the employers will have more excuses to import workers."

A dismal job prospect is expected to unfold itself for China’s numerous college graduates, as over three million college students could fail to land a job this year, some official estimated in a press conference yesterday.

The figure was revealed by Wang Yujun, a senior official of the Ministry of Human Resources and Social Security, in the media briefing for the annual report of the reform and development of China’s social security.

Against the backdrop of a record high number of graduates nearing seven million this year, more than three million college students could probably not find a job before graduation, said Wang.

She claimed that the estimation is made by taking into account of the initial employment rate which exceeds 70 percent in previous years.

The initial employment rate refers to the percentage of graduates who have secured a job before leaving the campus, which also encompasses those who have enrolled as post-graduates or by a foreign university.

The employment difficulty is caused not only by the nation’s education mode and students’ career vision, but also the quantity and quality of the job vacancies at present, Wang added. She predicted that the situation can hardly get better in a few years to come.

Summary: Chinese networking giant increases paychecks of lower-level employees by 30 percent, putting it in an even better position--against local rival ZTE--to recruit new talents.

Huawei has increased the pay package of its Level 13 to 14 employees, main entry- low-level staff, by an average 30 percent, with some getting more than a 70 percent salary hike next month.

According to a NetEase report Friday, which cited Chinese newspaper Southern Metropolis Daily, the salary increase would depend on the employees' work experience and individual performance, and will be effective in the company's August payroll.

Starting salaries for newly grads also have been increased significantly. Previously, pre-tax salaries for fresh grads postgraduate students in Huawei were 6,000 yuan (US$979) and 8,000 yuan (US$1,305) per month, respectively. From August, starting salaries, before tax, have been lifted to 8,000 to 9,000 yuan (US$1,305 to US$1,468) per month for newly undergraduate students, and 10,000 yuan (US$1,631) for postgraduate degrees.

Huawei will spend over 1 billion yuan (US$162 million) to support the salary increases, the report added.

A Wall Street Journal report said in 2012 entry-level salaries of 69 percent of Chinese college graduates were lower than 2,200 yuan ($359) a month, while graduates from lower-level universities earned an average of only 1,903 yuan (US$310) a month. Huawei's basic salaries for fresh graduates are substantially higher than the market average.

In the past, employees in Huawei earned about 10 to 15 percent higher salary than their peers holding similar positions in rival ZTE. After the latest round of salary increase, Huawei will have a upper hand recruiting new talents in the future.

The company is also known for its generosity to employees. In 2010, when Huawei's sales revenue reached 182.5 billion yuan (US$29.57 billion) with a record-high net profit of 30.6 billion yuan (US$4.96 billion), the Chinese networking equipment manufacturer implemented a 11.4 percent salary increase for its staff. Stock dividends also hit a historical record of 2.98 yuan (US$0.48) per share at that time.

With the potential to make a lot of money as a developer, especially since it is pretty easy these days to create your own app for mobile devices, we’re sure that there are many kids out there whose dream is to one day become a developer of software and games. However in China it is a different story as developers are typically referred to as “Ma Nong”, or number crunchers if you’d rather, since their job involves very long hours and apparently very little pay. Interestingly it seems that over in China, one developer has had enough of the long hours and bad pay, and when he quit his job, he decided at the urging of his girlfriend to start selling street food known as “shaobing”, a type of flatbread.

While it was a means to an end, it turned out that his endeavor proved to be more profitable than he had imagined and according to a report on Tencent, the developer (or ex-developer) now pulls in about $3,259 a month, which is reportedly double that of what he used to make as a developer! Of course $3,259 might not seem like a lot of money stateside, but over in China it is a pretty big deal. This by no means reflects the type of pay that all developers receive, since some employers can be fair while others can be quite stingy, it is an interesting twist on things.

Beijing college graduates expect a monthly salary of 3,684 yuan ($600) as they hunt for jobs, which is around 1,000 yuan less than graduates in 2012 expected, the Beijing News reported Thursday.

The Beijing Youth Stress Management Service Center said that based on its analysis of its survey of 16,000 graduates and 1,015 valid questionnaires, the average monthly salary expectation has decreased to the lowest level in three years, 2,000 yuan less than expectations in 2011, the report said.

PhD students expect the highest salary, at 6,000 yuan, 1,160 yuan less than 2011's expectation.

Thirty-year-old Ye Lei had worked in a state-owned factory in her hometown Jiangxi Province for seven years. Although she had been promoted to the position of the department head, she quit her job last month to work as a sales representative in a marketing company in Beijing.

"The first thing I want from the job hop is a higher salary. Career opportunities come second," Ye said.

Ye had already received a 13-percent pay raise over the year earlier period before she quit the factory. On April 1, Jiangxi Province increased its minimum wage for the eighth time since 1995. Many workers in Ye's factory have benefited from these wage increases.

Currently, in the most economically developed areas of Jiangxi Province, the minimum wage is 1,230 yuan ($196) per month, or 12.3 yuan ($1.96) per hour. Whereas in some less developed areas in the province, the minimum wage is 900 yuan ($143) per month or 9 yuan ($1.43) per hour.

Even with the raise, Ye still felt her income wasn't keeping up with the increasing cost of living. With profits of the factory dwindling and some of her workers leaving for greener pastures in the service sector, it was time for Ye to jump ship as well.

China's fast-growing service industries are luring workers away from the manufacturing sector. Modest hikes in local minimum wage ordinances do little to staunch the flow of personnel, to which the recruitment postings near the gate of Ye's factory can attest.

A report of The Wall Street Journal presents data showing that in the previous five years, the service industry created 37 million new jobs in China, much more than the 29 million created in manufacturing.

Labor shortage for the manufacture sector in China is not seasonal or short-term, said Kelvin Lau, senior economist of Standard Chartered Bank. Competition for labor is expected to drive up wages.

Stories of wage earners

On May 17, the National Bureau of Statistics of China released last year's average annual wage of the workers in urban non-private sectors, which mainly comprises state- and collectively-owned enterprises and public service institutions. The data show that in 2012, workers in those sectors made an average of 46,769 yuan ($7,459), a nominal 11.9-percent increase over that of the previous year. After deducting inflationary factors, the real annual growth rate was 9 percent.

As often, the release of national salary statistics sparked discussions and prompted people to share their income-related stories.

Lu Mengying, a 31-year-old resident in Beijing, is happy about her current income. She was recently hired as sales representative by a company selling luxury goods.

"My base salary and commission usually add to about 8,000 yuan ($1,276) per month. If things go well, I can make more than 10,000 yuan ($1,595)," she said.

Lu had previously earned rather little at a marketing company in Beijing's Zhongguancun area, China's Silicon Valley, where she had worked for six years after she graduated from university.

Promising earnings prospects drew her to the luxury industry. She enrolled in an expensive training program on luxury industry management. The 15-day training program cost her more than one year's income, but Lu found it worthwhile, as it helped her land her current job.

According to Lu, a "buyer" of a product line under a luxury brand in her company can make at least 500,000-700,000 yuan ($79,700-$111,600) a year. The buyer's duty is to run around the world to collect product information, contact suppliers, place orders and procure products to meet the needs of various consumers.

Currently, buyers are in short supply in China. Lu said that because of her limited ability and her 3-year-old child, she doesn't want to become a buyer, at least not right now. She's more confident about working her way back up to management—of a boutique rather than a factory. Few people in China meet the qualifications for store manager, so such individuals are highly sought after by luxury brands.

Lu's optimism is not unsubstantiated. Last year, a number of international brands exploring markets in second- and third-tier Chinese cities discovered significant demand for sales, human resources, training, business development and leasing professionals, according to a 2013 global salary survey by leading recruitment consulting firm Robert Walters.

Although business executives in many industries get fat paychecks, as indicated by the Robert Walters survey, most first-line workers do not.

Twenty-year-old Li Min, from Huainan City in Anhui Province, is a waiter in Shanghai. His parents also work in Shanghai, and they must support Li's two younger brothers.

As much as he'd like to chip in, Li can barely cover his own expenses, and he doesn't expect his 1,000 yuan ($159) monthly earnings to rise anytime soon. He plans to borrow some money from acquaintances and open a car wash.

Liu Guobao, a 43-year-old welder in Shanghai, also barely makes ends meet. His monthly salary increased to 3,800 yuan ($606) last year from 1,800 yuan ($287) in 2006. Yet having to raise two school-age daughters, he has little money to squirrel away.

The National Bureau of Statistics said that, although average wages in 2012 grew quite fast, income levels differed across regions, industries and positions, and the income gap is yawning wider.

Income disparity in China is quite high. Last year, the country's Gini coefficient, a gauge of income inequality, reached 0.474 after four consecutive years' drop from its peak level in 2008. Nonetheless, it shows an alarmingly wide gap between the rich and the poor in China.

"Since the implementation of the reform and opening-up policy in 1978, China has already established an income distribution system suiting its national conditions and development stage. Yet some salient problems still exist in this area," said Zheng Gongcheng, a professor researching social security at Beijing-based Renmin University of China.

Zheng is also a member of the Standing Committee of the National People's Congress, the country's legislature. He cited such problems as front-line workers' income is still too low, the income gap between various groups is too big, and some people get "grey" and "black" income.

"Increasing ordinary workers' income is a long-term task in the income distribution reform," Zheng said.

Reform suggestions

Public concern over income disparity has prompted government regulatory measures.

Income distribution reform is not as simple as salary reform, said Su Hainan, Deputy Director of the China Association for Labor Studies. Su said that it should involve reform of taxation, social security, social welfare, and other systems.

On February 5, the State Council approved and published opinions on deepening income distribution reform.

The document says that the government will strive to double the average real income of urban and rural residents by 2020 from the 2010 level and let the poor enjoy faster income growth.

Through the reform, the government also aims to expand the middle-income group, sharply reduce poverty, and adjust and regulate excessively high and hidden income.

The government also seeks to raise the share of residents' income in total national income, and increase government expenditure on social security and employment.

The urban-rural disparity is a major contributor to the income gap in China. Some experts say that the urban-rural income gap can explain more than 40 percent of China's income disparity.

Some experts suggest that to shrink the income gap, the government should reform the household registration system, eliminate discrimination against migrant workers, and give farmers greater pricing power when they transfer their contracted farmland.

Monopoly is also another cause of income inequality. Monopoly industries usually pay well, not because their employees work harder, but because of their monopoly of national resources, said officials from the Ministry of Human Resources and Social Security.

Even inside state-owned monopoly industries, income is very unevenly distributed. The Ministry of Human Resources and Social Security and the National Development and Reform Commission once conducted a survey on salaries in dozens of large and medium-sized state-owned enterprises in several monopoly industries, such as petroleum, telecommunications, aviation and electric power generation. The survey showed that in these companies, the highest-paid employee takes home five to nearly 100 times as much as the lowest-paid employee.

Zeng Xiangquan, Dean of the School of Labor and Human Resources at the Renmin University of China, advocates breaking up the monopolies to let markets determine executive salaries as a solution for this particular form of income inequality.

In addition, income distribution reform should not only be an "incremental reform" but also a "stock reform," said Zheng. That is to say, previous unequal income distribution, as reflected in unequal distribution of accrued wealth, should also be adjusted.

To bridge the gap between the rich and poor, both income and property should be regulated, Su said.

The State Council's opinions on deepening income distribution reform indicate the government may soon levy property taxes beyond the scope of the current trials in Shanghai and Chongqing. The possibility of a consumption tax was mentioned, and the government is exploring the feasibility of levying an estate tax in the distant future.

Zheng also suggested that on one hand, the reform should address some pressing issues, and on the other hand, it should set up stable systems to accommodate rational public expectations. He said that confidence in the future can alleviate people's uneasiness and anxiety.

It’s a well known fact that Chinese labor is somewhat cheaper than what is available in the West, however in recent years Chinese salaries have sky rocketed at a rapid pace for the average white collar worker. Entry level jobs for a recent graduate in Shanghai will net around 5000RMB (812USD) per month at the minimum, post grads can look forward to around 8000RMB per month (13,000USD), even more if they have previous work experience and international experience.

So how much does a CEO take in, specifically the CEO of major Chinese automotive companies? Those that are listed on the HK stock exchange have to reveal the director level payment packages so investors can clearly see where their money is going. Of course, some Western CEO’s take a token 1USD salary but have decent stock options instead and we’re sure the situation in China is largely the same in China as well. If they lead the company well their stock returns will be much higher than their salaries and of course have lower tax on them as well.

In 2012 BYD’s billionaire chairman netted a 2.77 million RMB salary (438,525USD), but that was down from his 4 million RMB salary in 2011, of course BYD’s total income was down by around 800 million over the same period so its nice to know that even CEO’s are taking austerity seriously. Wang Chuan Fu nets the highest salary in the Chinese auto business, but the gentlemen is also China’s richest man so his BYD salary is likely chump change to him.

Li Shu Fu, the Chairman of Geely and the brains behind the Volvo saw profit rise 32.2% at the Hangzhou based company, but his salary is just 327,000RMB per year ($53,122USD), probably on par with some of his own mid level white collar staff.

JMC’s GM Chen Yuan Qing hasn’t seen a payrise in three years on his 238,240RMB per year salary (37,500USD), his salary is reportedly paid in USD so he is losing money whilst the RMB appreciates against the USD.

Geely’s CEO Gui Xian Rui brings in just over 2 million RMB with his salary approaching 2.36 million RMB per year, a nice increase over 2011?s salary where he netted 1.96 million, a further 3.41 million RMB was given to him in stocks, bring a total of 5.77 million into Mr. Gui’s bank account. nice.

Great Wall’s Board Chairman Wei Jian Ping’s salary rocketed from 1.74 million RMB to 2.47 million RMB over the course of 2011 to 2012.

Four companies are offering salaries between one million and two million RMB per year: Foton, SAIC, Ningtong and GAC. Ningtong Coach didn’t see any major salary upgrades in 2011, with CEO salary staying at 1.2 million RMB. SAIC’s CEO Chen Hong’s salary jumped from 917,000RMB in 2011 to 1.36 million RMB in 2012.

Foton and GAC saw a salary drop in 2012, probably due to a poor financial show in 2011. Foton’s General Manager Wang Jin Yu saw a salary decrease of 3.1% with a net salary of 1.88 million, Foton’s total income dropped 20.7% in 2012 with profit increasing 17.4%.

With escalating labor and rental costs as well as manpower shortages on the mainland, 'relocation' has become the new buzzword for HK factory owners. Sophie He talks to them about their experiences.

Around 25 years ago, many Hong Kong factory owners, including Willy Lin Sun-mo, managing director of Milo's Knitwear (International) Ltd, moved their manufacturing facilities from Hong Kong to Guangdong province on the mainland to take advantage of cheap labor and low rental costs.

At that time, a worker's wage was as little as 8 yuan per day. Currently, wages at Lin's Dongguan factory have risen beyond 60 yuan per day - almost more than seven times what they used to be.

Today's mainland factories, especially those located in the Pearl River Delta, find it hard to recruit enough workers.The trend started with millions heading home annually for Chinese New Year holidays, only for large numbers to refuse to return to work. The workers preferred to stay at home for lesser-paid jobs and be nearer their loved ones and families, enhancing the jobless situation in many cities - a phenomenon that has become increasingly common these days.

As many factories in Guangdong face the triple challenges of rising labor costs, labor shortages and strong increases in rental, many factory owners, including Lin, turned to relocation or investments in factories on the mainland's hinterland, or even transplanting to neighboring countries as a solution to their problems. By moving factories to where labor was both adequate and cheap, owners expected to offset their challenges and be rewarded with bigger profit margins. And while some have benefited from such moves, others have not.

Lin told China Daily that Milo's Knitwear, whose Dongguan factory was established over 20 years ago, faced labor shortages several years ago, a problem shared by many such plants. As most of his workers in the Dongguan facility are from Jiangxi province, Lin invested more than 30 million yuan to set up a plant in Jiangxi four years ago, while answering the central government's call to companies to invest in the central and western area of the country. But he simultaneously invested in automation at his Dongguan factory, replacing semi-automatic machinery with its fully automatic equivalent.

When the Jiangxi factory went operational, Lin planned to recruit as many as 2,000 workers. But despite four years of production, the factory has only hired 300 workers, Lin says, explaining that few young people who lived in the area also wanted to work near their hometown.

"Most of the young people (who are born in smaller cities) on the mainland wanted to experience life in big cities, and thanks to a well-developed transportation system in the country, they can work in big cities and return to their family overnight," Lin says.

For those who choose to work near their family and loved ones, factory owners found these workers are easily distracted by domestic chores.

"The workers (in the Jiangxi factory) never want to work overtime, as they want to go home, prepare dinner, or take care of their children," Lin points out, adding that such distractions from home means the Jiangxi workers are not as efficient as their Dongguan counterparts.

The Jiangxi factory still hasn't broken even after four years. However, Lin has no intention of giving it up, as Jiangxi labor costs are still lower than those of Dongguan, and the local government is supportive.

So Lin improvised change. "Recently, it crossed my mind that since Jiangxi workers are having such a hard time adapting to our business model, maybe we should change our business model to adapt to them," he says.

Lin says that instead of producing entire garments in the Jiangxi factory, his company decided to produce only part of the garments there, thus making it easier for workers; meanwhile, the company can also lower its requirements to adapt to their production habits.

Relocation outside the mainland

Another company Top Form International, a Hong Kong-listed brassiere manufacturer, has two production plants; one in Foshan, Guangdong province, and the other in Jiangxi province. Both were established 30 years ago to manufacture lingerie for export to the United States and Europe. The two factories have a combined labor force of some 4,300 workers.

Top Form used to have a third factory in Shenzhen, but it closed down last year, as workers' monthly wages doubled from 2,000 yuan five years ago, to more than 4,000 yuan today. Difficulty recruiting sufficient numbers of workers was another reason for the plant's closure.

Four years ago, the company decided to close down the Shenzhen factory as part of a "strategic shift" to reduce capacity in high-cost areas and increase capacity outside the mainland where costs were lower.

According to Top Form chairman Willie Fung Wai-yiu, producing brassieres requires numerous manual procedures, so the company is heavily dependent on workers and is highly sensitive to workers' wage fluctuations.

Top Form then set up a factory in Thailand where it has since doubled the number of workers to 4,000 as of 2011. The company also established a factory in Cambodia in early 2012 and hopes to staff it with 2,000 workers. Average production costs in Thailand and Cambodia are 15 percent lower than on the mainland. The company expects to have two thirds of its total production capacity outside the mainland eventually, up from the current 47 percent.

But the relocation of Top Form's factory to Cambodia brought trouble from the outset.

Fung says that by September 2012, the factory had up to 700 workers, but then out of the blue, they downed tools and went on strike.

Illegal strike

"The strike was illegal.We had to take the workers to court, and the final ruling was in the company's favor, but by that time we had already paid dearly for the incident," Fung explains, adding that the strike action saw the company close its factory for weeks and release the majority of the workers.

Top Form's Cambodia factory is already back into full swing and currently has around 300 workers. But the incident forced Fung to do some serious thinking. As a result, he wants to share what he has learned from the relocation initiative with factory owners who may also want to expand their manufacture into Southeast Asian countries.

In retrospect, Fung says it is far better to train a local management team in the country the factory is relocated to, than to introduce a new management team from Hong Kong or the mainland to the country. "As it is hard to keep a non-local manager away from his family for many years, it is better to train a local manager who will ensure smoother operations," he says.

Recent statistics from the National Bureau of Statistics show that the average pre-tax salary for workers in the Chinese automobile industry is now at 13.58 yuan ($2.178) per hour, according to a report appearing on auto.163.com today. The salary level is considered average in the overall Chinese manufacturing industry. Furthermore, statistics from the US Bureau of Labor Statistics further reveal that wages in the Chinese manufacturing industry have doubled from 2002 to 2008, while those in the US have only increased by 20 percent. Despite these advances, average wages for workers in the industry in China are just four percent of the average level in the US.

As far as the country's automobile industry is concerned, it is also important to differentiate between domestic own brand manufacturers and Sino-foreign joint venture enterprises. Statistics from Aon Hewitt Consulting show that wages in that monthly wages for first-class workers at Chinese automobile manufacturers can vary between 1,800 yuan and 4,000 yuan ($288.81-$641.79). This difference is most noticeable in yearly bonuses. Last year, FAW-VW awarded its workers with a yearly bonus of between 50,000 yuan and 80,000 yuan ($8,022-$12,836), nearly ten times greater the bonuses granted by domestic manufacturers Chery and Jianghuai.

The large discrepancy in pay between the Chinese and American automobile industries is also evident among company executives. The combined annual salaries of 15 top level executives from nine of China's largest domestic manufacturers–BYD, Great Wall, Geely, JMC, Foton, GAC, SAIC, Yutong and Sinotruck–in 2012 was calculated to be 24.78 million yuan ($3.97m), only around one-fifth of Ford CEO Alan Mulally's annual salary of $20.99 million.

The Hong Kong Monetary Authority will give its staff a pay rise of 4.5 per cent this year - slightly more than the market average but less than that at the Securities and Futures Commission.

The city's de facto central bank announced all its staff would get a general increase of 4.5 per cent of their fixed salary, while 0.8 per cent was being set aside to reward good performers, with the increases for individual staff depending on performance.

The annual pay rise is effective from the HKMA's new financial year, which started on April 1.

Variable pay, equivalent to a bonus at private firms, averaging about 2.7 months' salary will be paid to staff according to their performance last year.

The HKMA's pay rise is in line with the 4.5 per cent inflation forecast by the government for Hong Kong this year.

It is, however, below the average pay rise of 5.5 per cent budgeted at the Securities and Futures Commission.

The HKMA's pay rise is higher than the 4.1 per cent given this year at 93 companies in nine industries surveyed by the Employers' Federation of Hong Kong in January.

Banks and financial services companies, which are regulated by the HKMA, awarded an average pay increase of 2.5 per cent.

Employees in property and construction got 5 per cent, the survey showed.

The HKMA's pay rise was determined by Financial Secretary John Tsang Chun-wah, who took into account a review by the governance subcommittee of the Exchange Fund Advisory Committee, market surveys of pay, as well as input from human resources consultants.

It appears that salaries in China will be getting a boost in 2013 due to a steady growth in gross domestic product, according to London-based recruitment consultancy Robert Walters Plc.

In general, workers who chose to switch jobs will see their salaries increase by 15 to 25%, according to a survey conducted by the company. Those who are riding it out in jobs they already have will only see salary increases of approximately 8%.

In a report published in January by Global Times, business owners expressed concern about raising salaries. According to Feng Lijuan, chief consultant at 51job.com, a NASDAQ-listed human resources service provider, "Business owners are more concerned about a salary hike in 2013, as most of them have seen a worsening business performance, and feel uncertainty about whether the Chinese economy will get better this year.” In the fourth quarter of 2012, approximately 65% of small to medium size businesses didn’t increase salaries of their employees. This was an attempt to survive slow economic times by limiting labor costs.

The banking and financial services industries have felt the greatest impact from the global economic recession. This sector faced the challenge of trying to increase profitability and hire sales professionals, while simultaneously minimizing expenditures.

However, as China’s economy stabilizes, multinational banks are becoming increasingly interested in exploring areas of China beyond the traditional financial centers of Shanghai and Beijing. Such corporations are looking for employees with knowledge of the broader Chinese market.

According to Arthur Wang, managing director of Robert Walters China, "Candidates who could develop strong relationships with local clientele and possessed both overseas and local experience were particularly sought after and generally received average salary increases of 10 to 20 percent when moving jobs. Meanwhile, as Chinese financial institutions continue to increase their presence within the local market, we expect to see continued demand for local candidates with Mandarin skills.”

Salary levels in China are likely to increase in 2013 as the nation expects stable growth in gross domestic product, recruitment consultancy Robert Walters Plc said.

Generally speaking, candidates moving jobs usually will get a 15 to 25 percent pay increase in the nation this year, said a survey released by the London-headquartered company.

Those who stay in their jobs are getting approximately 8 percent salary increases, which corresponds with the forecast for GDP. The World Bank estimated in January China's 2013 GDP growth could hit 8.4 percent.

With the economic environment challenging, salary increments for professionals who moved jobs were generally lower than previous years, said the survey.

Candidates typically received increases of 15 to 20 percent when changing roles in 2012, while the amount was between 15 to 30 percent in 2011. Strong performers could receive as much as a 40 percent increase in some cases, it added.

Financial sector

The banking and financial services industry was the most affected by the global economic recession. As these employers were keen to increase profitability and hire sales professionals, they were also required to minimize costs and, in some cases, were subject to headcount freezes, according to the survey.

"In the second half of last year, international financial institutions bolstered their control functions in response to several overseas banking scandals. Senior professionals with risk, compliance, credit risk approval and anti-money laundering expertise were highly sought after,” said Robert Walters.

A number of overseas financial firms delayed their expansion plans last year because of economic uncertainty. The demand for talent is set to bounce back this year as China's economy stabilizes, said Arthur Wang, managing director of Robert Walters China.

Multinational companies will be eager to recruit candidates with better knowledge of the Chinese market as banks start to explore markets beyond major financial centers such as Shanghai and Beijing.

"Candidates who could develop strong relationships with local clientele and possessed both overseas and local experience were particularly sought after and generally received average salary increases of 10 to 20 percent when moving jobs,” Wang said.

"Meanwhile, as Chinese financial institutions continue to increase their presence within the local market, we expect to see continued demand for local candidates with Mandarin skills.”

Speaking fluent Chinese will also help the candidates to seek jobs in other industries such as information technology.

The survey found that candidates were not only required to master IT systems made by industry giants such as SAP or Oracle: Bilingual proficiency in English and Mandarin will also be expected.

Retail and luxury

In cities such as Hong Kong where IT infrastructure and construction projects were implemented, demand for IT talent also jumped, said Robert Walters.

The industry with strongest talent demand was retail and luxury, boosted by the increasing purchasing power of Chinese citizens. It may grow by up to 20 percent year-on-year until 2015. Salaries in these sectors may jump 15 to 25 percent on a yearly basis, said Wang.

According to the Beijing-based World Luxury Association, Chinese people spent $830 million on luxury goods from Jan 20 to Feb 20 this year during the traditional festival shopping spree.

Although the growth of the Chinese luxury market slowed last year, the association expects that by the end of 2015 China will dominate the global luxury market with 60 percent of market share.

"The expansion of international luxury brands into second- and third-tier cities will boost demand in sales, human resources, training and in business development departments,” said Wang.

Luxury brands such as Gucci and Louis Vuitton have entered most capital cities at a provincial level.

Manufacturing

Companies in the manufacturing sector are also likely to recruit more staff in China to cement their presence in the world's second largest economy, the report showed.

"As the economy showed signs of recovery at the end of 2012 with improving manufacturing activity, multinational conglomerates are likely to continue to invest in China moving into 2013.”

Robert Walters expects this new trend will lead to new jobs becoming available, although organizations will remain cost-conscious and, as a result, will seek local candidates to fill positions vacated by expatriates.

Despite an uncertain economy and a challenging business climate, companies specializing in foreign-made consumer goods, auto parts, machinery and pharmaceuticals performed well throughout the year, Walters said.

Most recruitment activities throughout 2012 were largely replacement-focused as employers concentrated on reducing costs. Although most job seekers were primarily motivated by a better salary, career development is playing an increasingly important role among Chinese candidates, according to the survey.

Shanghai Leads Office Worker Salary Rankings
Shanghai has topped a white-collar worker salary list of China's 24 largest cities, according to a report released by Zhaopin.com, a leading Chinese online job advertising site. The city's ¥7,112 monthly salary for white-collar workers is followed by Shenzhen's ¥6,787/month and Beijing's ¥5,453/month. The three highest paid industries in Shanghai are energy/mining (¥9,711), automobile (¥9,644) and petrochemicals (¥9,218). The three highest paid industries in Shenzhen are telecom (¥8,488), finance (¥8,240) and energy/mining (¥8,220). The three highest paid industries in Beijing are telecom (¥7,633), real estate (¥7,095) and finance (¥6,950).

PBOC's Zhou Says 20% of Local Govt Debts Are Risky
About 20% of China's local government financing vehicles are not profitable and are vulnerable to risks, Xinhua reported, citing central bank governor Zhou Xiaochuan. Different from those funding major infrastructure and mortgages, 20% of local government financing vehicles are funding projects which are largely not profitable and the debts have to be paid with other incomes of local governments, according to Zhou. He called for further reforms to introduce new financing tools to ensure financial support for the country's urbanization.

Money Rate Rises Amid Inflation Concern
China's money-market rate rose to a one-week high after central bank governor Zhou Xiaochuan said the nation should be on high alert over inflation, Bloomberg reported. The CPI climbed to a 10-month high of 3.2% in February. The People's Bank of China will sell ¥18 billion of 28-day repurchase contracts Thursday, which will reduce the amount of cash in the system and stem the rapid monetary growth. The seven-day repurchase rate, which measures interbank funding availability, rose 0.06 percentage points to 3.08% as of 10:45am in Shanghai Thursday.

Power Usage Up 5.5% January-February
China's electricity consumption fell 12.5% year on year to 337.4 billion kW hours in February 2013 due to the Chinese New Year holiday, the National Energy Administration said. Between January and February, electricity consumption was up 5.5% to 789.2 billion kW hours, including 12.8 billion kW hours by the primary sector (up 4.3%), 552.8 billion kW hours by the secondary sector (up 4.2%), 106.8 billion kW hours by the tertiary sector (up 13.8%) and 116.9 billion kW hours by civilians (up 4.7%). A total of 6.48 million kW of new power generation capacity were installed during the two months, including 3.4 million kW of coal-fired capacity and 1.56 million kW of hydropower capacity.

Railroad Investment Jumps 26% January-February
Fixed-asset investment in China's railways totaled ¥37.63 billion in the first two months of 2013, including ¥25.14 billion in rail infrastructure, up 25.7% and 20.9% respectively from the same period of last year, said the Ministry of Railways, which is soon to break up and merge with the Ministry of Transport. The strong growth came after the investment in the sector remained sluggish throughout 2012 following a deadly high speed train crash in 2011. Chinese railways are expected to receive ¥650 billion in total fixed-asset investment this year, including ¥520 billion in rail infrastructure.

Deal-of-the-Day Turnover Exceeds ¥2.3b in January
Turnover at Chinese deal-of-the-day websites added up to ¥2.32 billion in January 2013, up 7.5% from a month earlier and up 72% from a year earlier, according to Tuan800.com, a site that collects information about such deals. 46.6 million people purchased deal-of-the-day coupons in January, up 4.4% from a month earlier and up 33.9% from a year earlier.

Big mainland cities like Shanghai are ratcheting up the pressure on Hong Kong on a new front - enticing professionals and specialists with higher pay and perks as the salary gap between the two narrows.

According to British recruitment agency Hays, 47 per cent of mainland-based businesses increased salaries by more than 10 per cent last year, compared with only 4 per cent in Hong Kong.

A Hays survey of 1,200 employers in Asia, including those in Hong Kong, the mainland, Japan and Singapore, showed that a chief financial officer on the mainland could earn up to 2.5 million yuan (HK$3.1 million) a year, beating a Hong Kong counterpart whose annual income tops out at HK$3 million.

"China led Asian countries in terms of salary growth despite uncertain economic conditions in other parts of the world," said Simon Lance, regional director for Hays in China. "Competition in the job market is fierce and it is a salary-driven market."

The British company said talented executives worldwide, including expats and overseas Chinese, were increasingly looking to relocate to the mainland.

Skill shortages remain a stumbling block to foreign companies' aggressive expansions in the mammoth market, with 30 per cent of employers saying they planned to further raise salaries by more than 10 per cent this year.

The Hays survey showed that 93 per cent of employers were worried about a shortage of skilled workers, which would hamper their business growth.

But Lance said the trend of more professionals being drawn to China by increasing pay packages could be reversed. China's higher personal income tax, difficult business environment and poor food-safety record could emerge as primary concerns, he said.

The performance of foreign businesses in China has declined as they fall victim to rising labour costs. A survey by the American Chamber of Commerce in Shanghai revealed recently that US companies reported profit drops for a second consecutive year last year due to rising costs, tougher competition and a slowing economy.

According to the results of a recent survey on Chinese working women, about 40 percent of interviewed women were unsatisfied with their latest salary adjustment and 50.7 percent said that they usually switch jobs because of job benefits.

The survey interviewed more than 1,700 employed people nationwide in February 2013, including more than 770 working women. Statistics show that 44 percent of the women interviewed had hoped for a salary increase of more than 20 percent, but only 7.1 percent achieved that goal.

In the wake of salary adjustment disappointments, 44.9 percent of women said they would look for new job opportunities, 22.8 percent would work harder and 18.9 percent would have a discussion with their bosses.

In addition, 7.1 percent would choose to keep silent about it, a higher percentage than men. This may be because women tend to be more careful about interpersonal workplace relationships than men.

Women of different ages also differed in their attitudes towards the salary adjustment gap, with more women born in the 1970s saying they would keep silent about it. Women born in the 1980s were more likely to work harder, but those born after 1985 were also more likely to change jobs immediately.

When it came to job-hopping, 59.9 percent of interviewed women said they planned to change jobs in the next three months, six months or one year.

For many women, having to balance work and family means that job benefits become increasingly important as they get older. For example, they are more likely to accept a lower salary in exchange for more vacation days.

Statistics also show that 69.6 percent of interviewed women would look at foreign companies first for job opportunities, 20.9 percent would prefer state-owned enterprises and less than 10 percent would choose private enterprises. In general, people believe that foreign companies offer better job benefits.

Experts have suggested that women also pay attention to industry prospects, developmental trends, company management and other factors that may affect their career development within a company.

Although statistics are sketchy, the chasm between rich and poor seems to have widened in China.

Shanghai, China - This country's economic boom has lifted millions of its citizens out of poverty and led to predictions it will become the world's largest economic power by 2030. However, while China's GDP has increased, so has the gap between its wealthiest and poorest citizens, placing the country among the most unequal nations in the world, according to a study by a Chinese institute.

China's Gini coefficient, a widely accepted measure of income distribution, reached 0.61 in 2010, according to findings by the Survey and Research Centre for China Household Finance. A score of zero represents perfect equality while a score of one represents total inequality, with one individual possessing 100 percent of a country's income.

Inequality is starkly visible in large cities such as Shanghai, where Lamborghinis and Porsches are a regular sight outside expensive restaurants, while beggars sit on the pavement with plastic cups looking for change. In the shadow of looming skyscrapers lie cramped dormitories for migrant labourers who work on some of the world’s most expensive properties.

"There is a huge gap between rich people and ordinary people in China," said Yang Zhang Yi, a retired worker, as he was waiting for a subway train in Shanghai. "Maybe the government should pay more attention on ... how to tax the rich people and reduce the taxes for the poor people."

The Chinese government has not released official Gini coefficient figures since 2000, when they put the figure at 0.412. In 2012, the National Bureau of Statistics said it was "slightly higher than 0.412" in 2010, but didn't give an exact figure, reported Xinhua, the Chinese state news agency. In March, Bo Xilai, the now ousted former Communist Party secretary of Chongqing, said that the figure had exceeded 0.46.

The World Bank, in a report published in February, cited income inequality as one of the main challenges facing China. The report stated that "the sustained increase in income inequality places China at the high end of income inequality among Asian countries". The World Bank hasn't issued Gini coefficient figures for China since 2005, when it estimated it to be 0.425.

Chinese estimates of the country's Gini coefficient have varied considerably. For example, in September, the International Institute for Urban Development in Beijing calculated China's Gini coefficient to be 0.438 in 2010, much lower than the Survey and Research Centre's result. Professor Gan Li, the centre's director, said he could not explain the differing figures but added that their study, which surveyed 8,400 households, was the first to publicly release all its data.

In an interview with the Communist Party-owned Global Times newspaper, Zheng Xinye, a professor at Renmin University, said the real figure may be even higher than 0.61 - as it is difficult to survey the super-rich in China. He blamed the widening income gap on "restrictions that kept small and medium-sized companies from entering high-profit sectors, as well as by employment discrimination".

However, Professor Martin Whyte, a sociologist at Harvard University who has carried out research on attitudes towards inequality in China, said he found the figure of 0.61 hard to believe. "The best survey research on income gaps leads to the same conclusion that the figure [Gini coefficient] is rising but is nowhere near these sort of figures," he said.

Regional differences

Inequality may also have increased between the country's wealthy east coast, where the major cities of Shanghai and Beijing are located, and the rural interior. Earlier this year, the gap between urban and rural areas was highlighted with the news that students in an area of Hubei Province had to provide their own desks for school, in stark contrast with the air-conditioned schools in the country's largest cities. The gap between urban and rural incomes is about 26 percent higher than in 1997 and 68 percent higher than in 1985, according to a report by the Chinese Academy of Social Sciences.

More than half of China's workers now live in urban areas, as rural migrants move to cities for better employment options. According to official figures, there are now 252 million migrant workers, many of whom now live in the country's cities. They usually are not entitled to healthcare, a pension or free education for their children under China's household registration system or hukou, which divides citizens into urban and rural residents and allocates public services accordingly.

Whyte said one of the reasons for inequality in China is the divide between rural and urban Chinese. "Other countries don't have a system like the hukou and the caste-like system it produces," he said.

The Chinese authorities have made pledges to reduce the gap between rich and poor and to address corruption. In his opening address during the Communist Party Congress in November, President Hu Jintao made an ambitious target for 2020 to double per capita income from 2010 levels for both urban and rural dwellers. And in October, the State Council said it would draft a plan to reform the current income distribution system.

The level of income inequality is "largely because China has very little income transfer. The government used resources to build investment infrastructure," Gan said. "It is time for the Chinese government to change its spending priority from infrastructure to income transfer and social welfare programmes."

In an article for the Economic Observer, Sun Liping, a professor at Tsinghua University, reffered to research estimating that there were 180,000 protests, riots and other mass incidents in China in 2010. However, it is not known if any were directly related to income inequality, and Gan said he had found no evidence that the figure of 0.4 was a warning line for social unrest. But he added: "There is lots of research saying that it is not income inequality per se that affects social instability, it is unequal opportunities. If there [are] vastly unequal opportunities, people will feel unsatisfied."

He believes that while there is room to improve, there "is a lot of social infrastructure in China that still works ... It is getting worse but the situation is not at the tipping point".

Income inequality will be one of the main challenges facing the country's new leaders, who will formally take power in March. The wealth of China's elite is controversial, and has recently been the subject of several foreign media investigations.

In December, Bloomberg exposed the vast fortunes of the offspring of China’s founding fathers, while earlier last year it also published an investigation on the business interests of the extended family of Xi Jinping, the soon-to-be president of China. The New York Times also published an investigation into the wealth of the family of prime minister Wen Jiabao.

While income inequality is a major issue for Chinese citizens, commuters in Shanghai had confidence in the Chinese government's ability to solve the problem. "There is now a limitation of the top salary," said Sun Xue Hong "For the poor, the government is trying to increase their salary at the same time. So this way the gap can become smaller and smaller."

And one young professional who gave her name as Alice said that, while the chasm between rich and poor has grown, she believed "the new government will take measures to narrow this gap".

"I am not sure about all Chinese people," she said. "But I am more confident now and I get more confident that these problems can be sorted out."

We all know there is plenty of information in the international and local press about how the economy and therefore the jobs market is slowing down. 2012 saw the lowest rate of GDP for some time and of course this will concern people. What we need to remember that a GDP of well over seven per cent is huge, and that over Q4 GDP rose again, so all of the signs are positive that growth will continue. Foreign direct investment in China is also expected to remain steady. As recruiters we are in a unique position to be in regular contact with the hiring departments within multinational and local business as well as being in contact with the local talent pool and this piece is based around the feedback from both sides.

China is a completely candidate driven market still and this will continue in 2013. What seems to be different is the company and candidate will value each other differently based on the previous few years in China, and this is where problems can occur. Candidates at the moment have lots of questions that need to be addressed before we get to the employers side of 2013. The Chinese workforce is still active in the employment market and is still one of the most active candidate markets in the world. By active I mean that the majority of employees out there will be interested in speaking to companies about their opportunities and are approaching companies and recruitment consultancies directly to see what is available for someone with their skillset and experience. The average recruiter in China will receive well over 100 applications a day from candidates directly or through mediums such as Zhaopin.com. Candidates are looking for exciting new challenges at all times and this will have a huge affect on the 2013 job market, as it has done towards the end of 2012.

Over the last six months there have been two main candidate observations during their interviews with companies. First of all, companies are taking longer in hiring decisions and secondly, companies are not offering the salary increases that are expected. There are other observations but these two are most prevalent and a lot of candidates say the same. Both of the above mentioned points are true, companies are taking longer to make decisions and companies aren’t offering the same salary increases as before as will be address later in the article. The fact that a lot of candidates are experiencing this adds to the impression that there is some looming financial crisis in China and that everyone should be panicking about their job security. Job seekers talk to each other regularly, candidates that are being headhunted let their friends know that they have been approached for a great new job, it is human nature. As these interview processes talk longer or the packages aren’t what candidates expect this information doesn’t just stay with them, it spreads around their circles, and then their friend’s circles like a virus. A virus spreading the self fulfilling prophecy of a crash in the jobs market in China which simply isn’t true. There will be changes in 2013 but change is good providing companies and candidates are well educated about the change.

Our job is to speak with hiring managers and HR professionals every day and the good news is that the vast majority of companies that actively engage with recruitment companies are expecting headcount growth in 2013. These companies range from multiple industry sectors, from Automotive to Luxury goods, from technical IT to Banking, from Retail to Construction. Certainly some of these industries are expecting lower growth than others, the construction industry is going to be relatively slow whereas the retail market, especially middle to high end luxury retail, is going to boom, but the common theme here is that all will be hiring, increasing headcount, and they all expect to have significant replacement recruitment to do as their employees move on to pastures new. As you can see it’s so far so positive for the job market, however there are snags. The points that candidates raised are valid, decisions take longer and the same increased salaries aren’t being offered and it is going to take some time with the two groups to come to agreement with that. Over the past few years the market has boomed in China, jobs outnumbered skilled employees and as candidates were originally underpaid their new companies were happy to give 30-50 per cent salary increases in order for a talented individual to move to them. The problem with that was that this war for talented individuals meant that professionals were moving again 9-12 months later for another 30-50 per cent increase and the cycle repeated itself again and again. It is not uncommon to see a CV with six different companies in an eight year career, the problem for candidates is that this is no longer acceptable to a rising number of companies.

When the boom in China took place, MNCs didn’t seem to care so much about backgrounds, providing someone could do the job required they would be hired and companies paid what was needed. Now that salaries are at an all time high in the Tier 1 cities and there is a very slight pinch in growth in China, MNCs and local companies alike are looking for their growth to come from increased performance from their people, in order for companies to get this increase they need to have time to train and develop them and this is where the two candidate points come into play. As we all know the standard job cycle globally runs in three stages, Year One – Learn your job, Year Two – Get good at your job and Year Three – Get bored.

The problem in China is that employees have been completing year one, then moving on to start the cycle again. As an employer you don’t really get much return on the investment of hiring until after year 1 has passed and it’s something that can no longer be tolerated. The reason why interview processes and hiring decisions are taking longer is because employers want to be sure that this candidate is right for their business, the candidate will stay and develop, and eventually add value to the organisation. Companies will intentionally delay interview procedures because they want to see that a candidate is truly interested in the role and the company, not the paycheck. This reasoning is true for the lower salary increases. Increases are still good compared on a global scale, an average of 17 per cent salary increase when moving job is fantastic, but nowhere near the same amount it was one year ago.

Companies will pay for the right people, and some large increases are still being offered, but not to candidates that have moved three times in the last four years as there is a huge risk in hiring someone that is likely to leave in nine months. The disruption to the team and the monetary cost of a bad hire is potentially devastating. Another point to mention here, though slightly off topic is Year Two. This is the stage that most job seekers in China have not been completing over the last few years, this means that a staggering number of candidates have the title of manager, or director, or senior partner etc without actually completing the required tasks to be proficient at the job. Extra rounds of interviews are being brought into a standard process in order to check this ability on a hands on level rather than theoretical and things like assessment centres are now becoming common place.

Moving to a linked topic to this, if, as an employer, you are offering less than the job market expects and are taking longer than normal to make your hires how do you attract people? The answer is in training and development. 51 per cent of candidates are more interested in in-house development than salary because of the experience over the last few years where this hasn’t been evident. Over the last six months the increase in demand for training and development specialist from HR departments has been huge across China and large amounts of vacancies at Manager or Director level insist on having someone who has experience in training and developing subordinates, some companies will actively get references from previous subordinates before extending an offer to a candidate.

In summary, 2013 will still be a great year for the job market, but job seekers and employers need to understand the market is changing and it wont be going back to the way it was which is not a bad thing.

Release date- 03012013 - Aon Hewitt, the global human resource solutions business of Aon plc (NYSE:AON), recently released the research findings of its 2012 China Human Capital Intelligence Report that comprises indicators of remuneration trends by industry sectors and the latest developments in human resources.

The research involves more than 10 key industries, including real estate, financial, pharmaceutical and medical equipment, high technology, automobile, consumer products, retail, chemical products, logistics and manufacturing, covering over 4,000 foreign-invested and leading local enterprises in Beijing, Shanghai, Guangzhou and Shenzhen, as well as major second and third-tier cities.

Both the national average salary increase and turnover rate show increase trends

Aon Hewitt's research showed increased trends in both the national average salary increase and turnover rate in China for 2012. The 2012 national average salary increase was 9.1 percent, which was closely mirrored by a high turnover of 18.9 percent. In the four first-tier cities, the average salary increase in the manufacturing sector was 10.1 percent in Guangzhou, 9.8 percent in Shanghai, 9.8 percent in Beijing and 8.9 percent in Shenzhen. Average salary increases for the non-manufacturing sector were 9.5 percent in Beijing, 9.3 percent in Shanghai, 9.1 percent in Guangzhou and 8.9 percent in Shenzhen. Both the average annual salary increase and turnover rate in second and third-tier cities were higher than the national average. Aon Hewitt's research showed the gap between the inland and the coastal areas, where most investments are concentrated, is gradually narrowing. Salaries for front-line workers, for example, who are the object of an intense war for talent, saw less than a 5 percent differential between the second and third-tier cities inland and the second-tier cities in coastal regions.

Aon Hewitt's China 2012 Human Capital Intelligence Report showed an overall salary increase of 7.9 percent for the real estate industry, slightly lower than in 2009 and 2010 when the new regulation was not yet in effect, Salary increases in this industry are expected to slow down in 2013. In 2012, the job category witnessing the greatest expansion was 'Sales and Business Development,' which has increased by up to 42 percent only in Shanghai. According to Aon Hewitt, this is mostly due to new strict regulations that push residential real estate companies to transform into commercial real estate businesses. It can be expected that the demand for this job title will remain high in 2013.

Talent availability in the second and third-tier cities tightened and human resources risk index rose sharply

Aon Hewitt's research shows that the conventional talent pool in second and third-tier cities has been rapidly diluted by the high level of salary increases and turnover rates, resulting in continuously increasing risk affecting human resources. In Chongqing and Nanjing, for example, the voluntary turnover rate in 2012 was 22.3 percent and 19.4 percent respectively (up from 9.6 percent and 7.3 percent respectively in 2006). Another key industrial city, Wuhan, is highly coveted by investors due to the availability of abundant educational resources. However, with the war for talent intensifying, the turnover rate has climbed from 9.4 percent in 2004 to 14.2 percent in 2012. According to Aon Hewitt, such a high turnover rate leads to high recruitment and training costs for employers and stagnation of the talent supply chain, bringing new labor and business issues to enterprises invested in Wuhan.

According to Peter Zhang, Global Partner and Vice President of Aon Hewitt Greater China, 'High salary levels pushed up by high cost of living in coastal cities result in the relocation of a large number of manufacturing Research & Development units to the inland, causing shortage of talent supply. On the basis of a constant pool of talents, the intense war for talents has directly led to a remuneration escalation and high turnover of employees. However, with the eventual saving in personnel costs and operations, it will be an irresistible trend to move to the inland for closer connection to various partners and integration with the supply chain. Likewise, in the process of moving to the inland, new considerations related to the local hiring of mid-level management positions (versus importing them from coastal cities) must be taken into account to keep the costs of salary and benefits under control.'

The high turnover rate impacts the sectors of domestic consumption
Aon Hewitt's research shows that industries of domestic consumption, such as the retail and fast-moving consumer goods sectors are impacted by the high turnover rate in China. Turnover rates in 2012 were 31 percent in retail, 26.6 percent in high-tech/manufacturing, 19.5 percent in fast moving consumer goods and 19.2 percent in the health care industry. High salary increases keep in direct proportion to high turnover rates, at 9.1 percent, 9.6 percent, 9.65 percent and 9.5 percent respectively.

Peter Zhang said, 'Remuneration is always the barometer of a sector. Our figures clearly demonstrate that these four industries are bearing the brunt of the evolution in the human resources market caused by the industrial expansion. According to Zhang:

In the retail sector, the change in sales channel and consumption habits forces major traditional retail businesses to try to expand online with an imminent demand for talent transformation.

The high-tech/manufacturing sector is also experiencing the pain of industrial upgrading. The development from low value-added OEM (Original Equipment Manufacturer) processing to the manufacturing of products with independent design patents has generated a battle for high-quality talent extending from the research and development of products to packaging design, to skilled front-line workers.

Fast moving consumer goods are particularly sensitive to the right pricing. With the soaring cost of raw materials, a greater importance needs to be place on employee productivity and on a strong understanding of the demand for talents in the market.

The health care sector is known as one of the hottest sectors in China. However, according to Aon Hewitt's 2012 survey results, this trend is stabilizing. After years of rapid growth, the health care industry is looking at re-evaluating its structure and sales strategy. With the injection of more domestic and foreign funds in this industry, and the dependence of sales channels in the second and third-tier cities, the upgrading of sales means and localization of product development are bound to bring a new round of competition for talents.'

The generation born in 1980s (Gen Y) constitutes the main force of the talent market, while the demand for employees remains diversified

Aon Hewitt's 2012 China Human Capital Intelligence Report found that the generation born in 1980s (or Generation Y), which has been known as the new force of the workplace for many years, has become the main age component in the current talent market. Compared with 2007, the proportion of employees born in the 1980s is growing at a rate of almost 40 percent. Currently, the average proportion in various sectors has exceeded 65 percent. In some industries and functions, such as production of the high-tech manufacturing sector, the proportion has reached up to 80 percent. The new generation born in 1990s also has grown to be another large group in the workplace. At management level, the diversified age structure of employees has also created new demands. Aon Hewitt believes selecting the correct means of communications and incentives to improve these groups' engagement and optimize their performance has become an important area of concern for management.

Peter Zhang concluded, 'As China's economy has entered the stage of medium-speed development, the impact on the industry is also reflected in the slowdown in sales. For example, the health care sector which has always maintained a high growth in sales has seen its sales rate decrease by 5 percentage points in 2012 compared to 2009. However, enterprises will never stop seeking maximal profits. In the short-term with continuous increase in personnel costs, the improvement in productivity has become the only way to realize sustainable development in enterprises.'

About Aon Hewitt

Aon Hewitt is the global leader in human resources solutions. The company partners with organizations to solve their most complex benefits, talent and related financial challenges, and improve business performance. Aon Hewitt designs, implements, communicates and administers a wide range of human capital, retirement, investment management, health care, compensation and talent management strategies. With more than 29,000 professionals in 90 countries, Aon Hewitt makes the world a better place to work for clients and their employees. For more information on Aon Hewitt, please visit www.aonhewitt.com/apac.

About Aon

Aon plc (NYSE:AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 62,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world's best broker, best insurance intermediary, reinsurance intermediary, captives manager and best employee benefits consulting firm by multiple industry sources. Visit http://www.aon.com for more information on Aon and http://www.aon.com/manchesterunited to learn about Aon's global partnership and shirt sponsorship with Manchester United.

A US employee is said to have outsourced his job to China.

A security check on a company revealed that a member of staff had been paying a fifth of his six-figure salary to a firm in Shenyang to do his job for him, reports BBC News.

The software developer spent his work day surfing the web, YouTube and eBay.

Andrew Valentine of operator Verizon said that the scam came to light when the US company asked Verizon for an audit after a suspected security breach and asked the risk team to investigate some irregular activity on its VPN logs.

An active VPN connection was found from Shenyang to the employee's computer and Verizon was called to look into what was thought to be malware used to share confidential information with China.

The employee's computer contained hundreds of invoices from the Shenyang contractor, it has been reported.

Valentine said: "Authentication was no problem. He physically FedExed his RSA token to China so that the third-party contractor could log-in under his credentials during the workday.

"Evidence even suggested he had the same scam going across multiple companies in the area.

"It looked like he earned several hundred thousand dollars a year, and only had to pay the Chinese consulting firm about $50,000 annually."

China tops any other Asia-Pacific market in its number of companies that plan to hire more employees, a report says.

Nearly 56 percent of organizations interviewed for a report by the global human resources company Hudson, said they plan to increase the number of permanent staff in the first quarter of 2013.

The enthusiasm to hire comes amid the recovery in the growth of the Chinese economy and an increasing number of multinationals moving their regional headquarters to China, said Lily Bi, general manager of Hudson Shanghai.

The salaries offered to talented workers will also increase, Bi said.

"International giants and local companies are attaching more importance to research and development work. Therefore, talented professionals have plenty of opportunities, especially in the pharmaceutical and automotive industries," said Bi, stressing that higher salaries offered to sought-after workers is another trend taking shape in the Chinese job market.

Multinational companies moving their headquarters to China, Shanghai especially, have also helped to create more jobs.

According to statistics provided by the Shanghai Municipal Commission of Commerce, as of September 2012, around 60 multinational companies had Asia-Pacific or Asian headquarters in Shanghai.

The pharmaceutical and biologics company AstraZeneca moved its Asia-Pacific headquarters from Singapore to Shanghai in June. McDonald's and Ikea have also moved their Asia-Pacific headquarters to Shanghai.

Although its economic growth slowed in 2012, China is still the second-largest economy in the world. The central government forecast that the country's GDP will grow by 7.5 percent in 2013 and its unemployment rate will remain stable at around 4 percent.

China is now the world's fastest-growing automobile market and skilled professionals are needed to sustain expansion, particularly in smaller cities. Salary packages are becoming more streamlined and bonuses are down, but candidates are ambitious and looking for increments of up to 25 to 30 percent to switch roles, the report said.

Guo Yating, 32, with three years of experience as an automotive research and development engineer, moved to AVL, an Austrian-based automotive consulting firm, in December with a 50 percent salary increase and a 10-day extension of annual leave to 15 days.

"Frankly speaking, the chances were far scarcer in 2011 and 2012 when the economy, especially the manufacturing industry, was pretty lousy. It was quite difficult for fresh graduates to get a job. But on the contrary, R&D engineers with experience have been receiving more enquires from headhunters in the previous two years," Guo said.

Bi from Hudson said salary increases will also be offered to people working in newly opened positions, even though they are in older sectors such as the advertising industry.

"Employees with expertise in digital and new media, e-commerce and social media may receive increments of up to 20 percent," she said.

Li Daifei, 28, a project manager at a Shanghai-based advertisement agency, was offered her current job at the end of 2012, which saw her salary rise by 40 percent. Her experience with digital media helped her make the switch.

China is gearing up to lure more foreign talent, especially those with experience in engineering, bioscience and information science.

In order to facilitate the recruitment of experts, the country would adopt more market-oriented measures, including cooperation with high-level expert associations and headhunting firms, Xinhua news agency quoted Zhang Jianguo, a general director of the State Administration of Foreign Experts Affairs as saying.

Zhang said the Chinese government has established a 10-year programme in August 2011, which aims to employ 500 to 1,000 overseas high-caliber experts to help increasing China's economic and social development.

He said every employed expert would be offered one million yuan (US$160,000) as living expense subsidies.

"For scientific researcher, they would be given another three to five million yuan research subsidy," he said.

Currently, 94 foreign experts have been recruited under the programme, he added.

Salaries will grow 9.1% while turnover will remain high at 18.9% this year in China, according to a report released by Aon Corp, a London-based provider of risk management services and human capital consulting.

In the top four cities, Guangzhou will lead the way in manufacturing salary growth with 10.1%, followed by 9.8% in both Shanghai and Beijing and 8.9% in Shenzhen. Beijing's 9.5% will be the fastest when it comes to non-manufacturing salary growth, followed by 9.3% in Shanghai, 9.1% in Guangzhou and 8.9% in Shenzhen, the report says.

Salaries of manufacturing workers in second and third-tier cities are catching up with those in the top four cities, with the average difference narrowing to less than 5%. The report warns that employment risks are surging in smaller cities as local turnover keep running high. Turnover in Chongqing and Nanjing, two leading second-tier cities, is expected to be 22.3% and 19.4% respectively, well above 9.6% and 7.3% in 2006.

Spiraling living costs in coastal China have prompted plenty of manufacturers to move to the inland, causing regional labor shortages and higher salaries, according to Aon China vice president Zhang Hong.

In terms of industries, the highest turnovers are seen in retail (31%), hi-tech manufacturing (26.6%), fast moving consumer goods (19.5%) and healthcare (19.2%), which can expect faster salary growths of 9.1%, 9.6%, 9.7% and 9.5% respectively. The four industries are undergoing structural changes in the labor market, Zhang argues.

The Aon report is based on a survey of more than 4,000 firms across China engaged in the real estate, finance, healthcare, hi-tech, retail, chemical, logistics and manufacturing industries.

Foxconn, one of China's biggest electronics manufacturers and the maker of most Apple products, has been at the center of a number of labor scandals in recent years. However, employees at factories are hoping to work even more hours than they already do as they seek to make a decent wage.

According to the Wall Street Journal, last year the Fair Labor Association went to Foxconn factories to take an audit of the manufacturing giant's work shifts and found that employees there were working 12-hour shifts, and sometimes even longer. According to the Atlantic, the regular work days of employees exceeded the legal limit in China of 40 hours per week and a maximum of 36 hours of overtime per month. As a result, Foxconn pledged to reduce available hours for workers to a maximum of 49 hours per week, including overtime.

Now, Foxconn employees are asking to be allowed to work more overtime hours because they claim they are not making enough money, even when working the new maximum number of hours. More than 15 Foxconn workers were interviewed, and they all claimed they already work between 10 and 15 overtime hours a week, exceeding the legal limit, and would work even more if given the opportunity.

Many of the employees at Foxconn are originally from rural areas and have come to the factory located in southern China, near Hong Kong, to earn and save money quickly to send back home. However, limiting the amount of hours they can work also limits the amount of money they can bring home.

The best solution to prevent overworking employees, and thus hopefully avoid another spate of employee suicides, would to be raise hourly wages. Foxconn has reportedly increased hourly pay three times this year. Now, the base pay of an employee is around 2,200-2,500 yuan a month ($350-$400), up from the previous 2,000 yuan ($321). At that rate, working regular hours does not satisfy employees who end up still working brutal 15-hour shifts. The pay increases do not equal the potential earnings that employees used to have.

One worker identified only as Ma was quoted by the Wall Street Journal as saying that by working overtime, he was able to double his monthly wage to about 5,000 yuan ($800), exceeding the legally prescribed limit.

Now, the problem may become Foxconn's. The electronics manufacturing company may have a tough time retaining its 1.5 million employees once the new hour restrictions are rolled out next year.

Ma is one of those people who does not think his increased regular pay will make up for the cut hours.

"We don't know how much our salary will go up. But after being here three years, I don't have much incentive to stay, since my wage probably won't rise much," Ma said in the report.

And Ma is not the only one who may leave. After all, the goal for many is to make as much money in a day they physically can, not necessarily having job security. Foxconn did not comment on what it planned to do to retain its employees, but Bernstein Research estimated that the base salary of employees would have to be increased by 50 percent to compensate for cut overtime hours.

For now, Foxconn has improved the facilities' working and living conditions. With dormitories that room friends together, recreational facilities and mental-health professionals on-site to counsel employees, and even high school and college education courses on-site as well, the company hopes that these other benefits will be appealing enough to retain employees.

In a clear sign of a slowing economy, many employers in China, including foreign-owned factories and state-owned enterprises, have been unable or unwilling to pay their employees for months. Strikes and protests by workers have erupted to demand unpaid wages.

On December 10-11, more than 1,000 subcontracting workers at Eastern Heavy Industries in Jiangsu province’s Jingjiang city struck over the company’s failure to pay them for 5 to 6 months. Workers rallied at the Shanghai-Beijing expressway, causing massive traffic jams and forcing municipal officials to negotiate. The next day, the shipyard, under pressure from the local government, was forced to pay some of its wages and bills

Singapore-based JES International, which owns the shipyard, justified the non-payment by blaming the subcontractors, who often hire migrant workers and delay payments to prevent them from leaving without notice. The company also stated that it needed working capital, as the number of ships under construction was high and some clients were asking for delayed delivery dates.

In reality, recent data from China’s National Shipbuilding Industry shows that the number of new orders in the first 10 months this year was down nearly 50 percent, compared to the same period last year. In the first nine months of this year, profits for large shipbuilders were down 40 percent. Several leading shipbuilders, including the largest private-owned shipbuilder in Chongqing, Jinglong Shipbuilding, collapsed in the first half of 2012.

The Hong Kong-based China Labour Bulletin reported that several thousand Eastern Heavy Industries employees had also been unpaid for five months. One worker said the management had warned them not to join the subcontractors in striking, or they would be fired. Some of the workers, however, indicated that they would take action if they were not paid by the end of the year.

The Chinese Communist Party (CCP) regime is once again resorting to police-state measures against workers. In the aftermath of the subcontracting workers’ strike, contingents of police vehicles have been at the shipyard each day in an attempt to intimidate the workforce and prevent further stoppages.

A 12-day strike by 600 workers at a shoe factory in Foshan in Guangdong province ended on December 22, after they were forced to accept half the payout they had been demanding. The stoppage at the Shyang Ho Footwear began on 10 December after its private owner prepared to sell the factory and move to the inland city of Chengdu, where labour is cheaper. The workers demanded the compensation required by law, namely one month’s salary for every year of employment.

Workers occupied the plant in order to prevent the removal of equipment. But the government sent in hundreds of armed police to stand guard as the management shipped out the factory’s assets. The collapse of the company, which was a leading shoe maker in Foshan during the 2000s, symbolises the crisis of China’s export-led growth. Following the 2008 global financial crisis, many export enterprises went bankrupt. Those that survived, like Shyang Ho, slashed costs.

On December 20-21, over 1,000 workers at the South Korean-owned Dongguan Samkwang Science & Technology, which makes mobile phone parts, went on strike over low wages and poor conditions. Large numbers of armed police and security guards were sent to suppress the stoppage, leading to injuries and arrests of workers.

On Monday, 4,000 workers at the Hong Kong-owned Wong’s Electronics Co in Shenzhen downed tools over the lack of compensation for the “restructuring” of the company, which changed its name and legal representative. Large numbers of police were deployed at the factory. On Wednesday, workers marched to the local Shajing township government with banners demanding justice, but the authorities responded with more armed police.

Demonstrations have also taken place at state-owned enterprises. On December 25, more than 1,000 workers at a subsidiary of China’s largest paper mill, Chengming Papers, blocked the junction of two major bridges in Wuhan city to protest against the factory’s closure and unpaid wages. (See photo). Elite “Special Police” contingents were deployed to suppress the strike, resulting in injuries to 30 people, according to the dissident web site, the China Jasmine Revolution .

The web site explained that the protests were part of a month-long struggle by employees, who had been unpaid for half a year. The loss-making company had sold its land but did not want to compensate the workforce. Instead it pressured workers to transfer to distant subsidiaries, with very low pay of just 1,000 yuan ($US160) a month. Workers said the purpose was to force them to resign.

On December 25, hundreds of doctors and nurses from a hospital belonging to a major state-owned enterprise, the Tongling Nonferrous Metals Group, blocked one of Tongling city’s main junctions to protest against the non-payment of six months’ wages.

Social unrest is set to grow in the aftermath of the CCP’s 18th Congress in November. The congress adopted a pro-market economic agenda that includes the privatisation of some of the 100,000 remaining state-owned enterprises. Newly-installed CCP general secretary Xi Jinping recently completed a “Southern Tour” that mimicked that of former leader Deng Xiaoping two decades ago, during which Deng accelerated the process of capitalist restoration in China. Xi’s tour was designed to reassure the business elite and foreign investors that his administration will press ahead with pro-business policies.

Just after Xi completed his tour, workers in Deng’s home town of Guang’an city, in Sichuan province, held a protest over two and half months’ of unpaid wages. Around 200 workers from a Korean-owned knitting factory, Hanmei, struck on December 21. After the factory manager fled to avoid a confrontation, workers rallied at the City Hall, appealing for authorities to step in. Instead, the local government mobilised hundreds of riot police to violently disperse the protests. Six workers were injured and two reporters were detained.

The violent suppression of workers in Deng’s home town was designed to send a strong message that the new CCP leadership will not hesitate to use police-state repression to enforce its socially-regressive pro-market reforms

'Will I get a pay rise?" This question is foremost on almost every wage earner's mind as the year nears its end.

The question, however, got a positive response from the two-day Central Economic Work Conference, which concluded on Dec 16, as the new Chinese leadership made economic restructuring by boosting domestic consumption and improving people's livelihood two of its six key tasks for next year. Increasing people's income, no doubt, will play an important role in achieving the two goals.

Accomplishing the goals will not be an easy task, though.

The income distribution reform plan, scheduled for later this month, has been deferred again until at least next March. The repeated delays in the implementation of the plan show how difficult and complex economic reform in China is. The Chinese leadership, however, should be more determined now than ever to implement the reform because the wealth gap has widened alarmingly.

The yawning income gap has further pushed up China's Gini coefficient - a widely recognized measure of wealth inequality, with anything above 0.4 being worrying. In a report published at the end of 2011, the National Bureau of Statistics said China's Gini coefficient in 2010 was slightly higher than that in 2000, which it put at 0.412. A recent Southwestern University of Finance and Economics survey on China's household financial conditions, however, put the country's household Gini coefficient at 0.61 in 2010, compared with the world's average of 0.44.

Though one or two surveys cannot reflect China's true picture, the trend of widening income gap should be a warning to Chinese decision-makers.

Of course, the wealth gap cannot be narrowed by simply "robbing the rich to help the poor", for it will not only create obstacles for the reform, but also lead to outsourcing of capital and even curbing economic growth. Nor can it be narrowed by forcing enterprises to raise the salaries of all their employees.

Maintaining growth is also a key task of the leadership next year. That means too heavy a burden should not be placed on enterprises. The impractical move of forcing enterprises to raise all their employees' salaries will increase their human resources costs and deal a deadly blow to the smaller ones. Thus the government has to navigate through the difficult waters of income distribution reform to achieve the different and sometimes, more or less, paradoxical goals.

A recent report by Towers Watson, a global advisory services company, shows that Chinese enterprises remain cautious about pay rise in 2013, and the average increase is expected to be 9.3 percent, slightly lower than 9.6 percent in 2012. Such an increase is not disheartening. But more importance should be paid to narrowing the income gap between companies' senior managers and ordinary workers.

Today, the income of China's highest 10 percent earners is 23 times that of the lowest 10 percent, compared with 7.3 times in 1988. According to a report published by the Ministry of Human Resources and Social Security in October, the incomes of management personnel have increased much faster than that of ordinary workers over the past five years, with the yearly salary of senior management personnel of listed companies rising from 291,000 yuan ($46,648.6) in 2005 to 668,000 yuan in 2010, an average increase of 18.1 percent.

The manufacturing industry's demand for new employees shrunk by more than 20 percent year-on-year in the first three quarters of this year, according to a recent survey released by the Seebon Human Resources Research Institute.

Among industries, shipping showed the greatest hiring demand, as the need for more employees in transportation, warehousing and postal services increased steadily in the first nine months of 2012, the report said.

Contributing to that result has been the success of e-commerce and the ever-tenser competition among online shopping malls. Industrial restructuring has also led to the disparities in hiring demand, said analysts at the Seebon Human Resources Research Institute.

The survey also said the reduction in job opportunities has resulted in part from the international market's declining interest in products manufactured in China, and the greater number of robots now performing jobs formerly done by people.

It predicted that rising labor costs, the incessant appreciation of the yuan and shrinking overseas demand will force small and medium-sized manufacturers, which once were the source of many job opportunities, to exit the market.

The survey also found that the number of people hired in the first three quarters of the year was up by 5 percent year-on-year. The demand for employees was the strongest in Beijing, Changsha, Kunming, Shenyang and Tianjin during that period.

Most workers saw their incomes rise by 15.1 percent year-on-year in the first three quarters of this year, the report said.

"The average monthly salary for a worker at our factory has increased by at least 15 percent to more than 3,000 yuan ($481) from the beginning of the year," said Gu Zhongwei, general manager of the Wuxi-based Handa Enterprise Fabric Department.

"In the entire textile industry, nobody is talking about profits now. We are only thinking of making it through our current difficulties.

"There is literally no order. Our former partners are now turning to manufacturers in Vietnam and Cambodia, where they offer salaries of only $60 a month."

Shen Xiangjun, manager of Ningbo Jinfan Toy Co Ltd, agreed that labor costs are much higher in China than in other countries.

"I have investigated the Indian market recently," he said. "It turns out that labor costs there are 70 percent cheaper than in China."

He said the average monthly salary at his company exceeds 3,000 yuan.

"Soaring labor cost and rapidly increasing salaries are partly the results of government policies," said Pu Yonghao, Hong Kong-based regional chief investment officer for Asia Pacific at UBS Wealth Management.

"On the other hand, the profit margins of companies have been greatly impaired, especially in labor-intensive industries such as manufacturing. It is very likely that Chinese companies of this kind will lose their edge."

Chinese enterprises expect an average salary increase of 9.3 percent next year, consulting firm Towers Watson said in a report.

The growth rate is a bit lower than the 9.6 percent for 2012, the report said.

"As retaining talented staff is becoming increasingly difficult these days, most enterprises have been striving to offer staff a competitive salary, but the inflationary pressure should not be under estimated," said Xu Wenzong, general manager of Towers Watson China.

Geographically, in high-tech areas such as Shenzhen and Dongguan, salary expectations hit 10 percent, higher than the national average.

Non-private sector workers in Guangzhou enjoy the highest salaries among 26 provincial capitals and municipalities across China, according to data released by the local statistics bureau.

Guangzhou leads the list with a 57,473 yuan ($9,052) annual salary, while Beijing ranked second with an annual salary of 56,061 yuan. Nanjing ranked third with an annual salary of 54,713 yuan.

In 2011, the national average salary for non-private sector workers was 42,452 yuan.

Consumption growth is expected to slow as salaries rise less than before. This could affect Beijing's efforts to be less dependent on exports

Mainland wage gains have moderated on weaker corporate profits, capping consumer demand as the government seeks to sustain a rebound after a seven-quarter economic slowdown.

Average urban salaries rose 12 per cent in the first nine months from a year earlier without adjusting for inflation, slowing from 14.4 per cent for all of last year and 13.3 per cent in 2010, government data shows. Restaurant operator Yum Brands reports smaller pay increases, and labour ministry data shows the same for minimum wages.

Deeper declines in wage growth would undermine efforts by the new leadership under Xi Jinping to boost consumer spending and shift the world's second-biggest economy away from dependence on investment and exports.

Overcapacity in manufacturing is weighing on profits, with the latest reading due today when the statistics bureau releases industrial companies' net income for the year to October.

"Given the poor profit picture, wage growth is bound to slow down in the coming quarters and this is set to reduce the robustness of consumption," said Louis Kuijs, chief China economist at Royal Bank of Scotland in Hong Kong, who formerly worked at the World Bank in Beijing.

"The expected slowdown will impact the rebalancing in the sense that it will reduce the relative role of consumption in the short term."

Li Keqiang, the second-highest ranked official in the new Communist Party leadership and set to take over from Wen Jiabao as premier in March, said last week that household spending is key to boosting local demand. Minimum wages rose an average 19.4 per cent in 18 provinces this year up to September 30, government data shows.

That follows nine-month gains of 21.7 per cent in 21 provinces last year and 24 per cent in 30 provinces in 2010. China has targeted an annual average increase of 13 per cent for 2011-15.

Consumption, which includes government and household spending, fell to 49.1 per cent of gross domestic product in 2011 from 59.6 per cent in 2002, when Hu Jintao began his decade as Communist Party chief.

Last year's figure was close to the lowest contribution since China's reform and opening up policy started in 1978, government data shows.

"Changing this model has become of paramount importance if China is to avoid a disruptive bust in investment in the next one to two years and lapse into a middle-income trap in the medium term," George Magnus, senior economic adviser at UBS wrote last week, referring to growth slowdowns in developing nations after incomes rise.

In his last major speech as Communist Party chief this month, Hu vowed to double per capita income by 2020 from 2010, a target that HSBC estimates would signal real growth of about 7 per cent a year.

China's economy expanded 7.4 per cent in the third quarter from a year earlier, the slowest pace in three years. Analysts forecast a rebound in the October-December period to 7.7 per cent, based on the median estimate in a survey this month.

Growth in investment growth has outpaced consumption for years, posing dangers including higher bad debts, overcapacity, lower profitability, environmental degradation, social instability and external imbalances, according to the World Bank and International Monetary Fund.

The global financial crisis exposed the risks to China's economy from its dependence on exports as shipments fell for 13 months and about 20 million migrant workers lost their jobs.

Yum Brands, the US-based operator of KFC and Pizza Hut restaurants which has about 5,000 outlets in China, had a smaller increase in labour cost of 8 per cent in the last quarter for the third quarter running.

"Food inflation is falling, so there is less need to help minimum-wage workers," said Alaistair Chan, a Sydney-based economist for Moody's Analytics. "Median wage growth will naturally slow as it gets higher, because productivity gains slow" and diminishing returns to capital and labour set in, Chan said.

Consumer prices increased 1.7 per cent in October from a year earlier, down from a three-year high of 6.5 per cent in July 2011. Food costs rose 1.8 per cent last month, down from an 11.9 per cent gain a year earlier.

The Ministry of Education has launched a recruitment campaign as it seeks high-end talent to fill the top positions of three domestic universities.

From Dec 4 to 23, interested candidates can check the official website of the ministry at www.moe.edu.cn and apply for the positions of president at one of three universities - the University of Science and Technology Beijing, Beijing University of Chinese Medicine, and China Pharmaceutical University, in Nanjing, Jiangsu province.

This is the second time the Ministry of Education has publicly recruited top leaders for its affiliated universities.

The previous round, which began in December 2011, included openings for two university presidents and six university chief accountants, and had multiple layers of screening that ended in March.

In this round of recruitment, the ministry adapted requirements for candidates that focused on two things: the candidates must have rich experience in management of high-level universities and possess administrative skills, and they have to guarantee their complete immersion in university management once they are selected.

Currently, China has 76 universities affiliated with the Ministry of Education. Presidents and deans in these universities have administrative rankings corresponding to official levels in the ministry. And almost all university presidents were designated by the ministry or by the Organization Department of the Communist Party of China Central Committee.

"The new requirement means that once they are selected as university presidents, they have to quit their own scientific research, and dedicate themselves to university affairs full time," said Xiong Bingqi, deputy director of the 21st Century Education Research Institute.

"The new requirements reflect the ministry's purpose in recruiting the university presidents publicly - the ministry officials want our universities to have professional presidents who are impervious to the influence of administrative power," he said.

The power of bureaucrats in China's universities has been widely criticized since 2007, when Zhang Ming, a professor of Renmin University of China, showed on the Internet how deans abuse their administrative power to influence academic research.

In the following years, many universities in China have tried various attempts to break administrative power. One of the most famous cases is that of Zhu Qingshi, principal of the South University of Science and Technology, who tried to start a university from scratch so that the university could stand independently, apart from bureaucracy.

Zhang Zongyi, who was selected president of the Southwestern University of Finance and Economics, said the ministry's public selection was tough.

"When I applied for the president position, I did not expect it to be so difficult. I actually thought it would just be some interviews," Zhang said in an interview with the Beijing News on Tuesday.

When Zhang gave his campaign speech, he found that students, professors and staff and even retired university staff and alumni of the Southwestern University of Finance and Economics were sitting in the hall listening to his speech.

"To ensure fair competition, all the candidates handed out our cell phones in the interviews," he was quoted in a report by the newspaper.

However, Xiong Bingqi, the education expert, said the effect of the public selection is "rather limited".

"First, although any candidates who meet the requirement can participate in the public selection, the expert committee who decide the result are from the ministry rather than any independent college councils," he said.

"Second, the selection included public opinion evaluation on the candidates, but the ministry did not disclose the results to the public.

"To make some real progress on reducing the administrative power in universities, the ministry will still have to improve the public selection."

SHANGHAI - With the growth of the national economy and the continuous development of Chinese enterprises, more middle- and high-level professionals in China now prefer to work for domestic companies rather than foreign-owned enterprises, human resources experts said.

"Multinational companies have long been in a favorable position in the recruiting market due to their liberal reward and advanced management culture," said Chen Jiewei, senior consulting manager with China International Intellectech Corporation (CIIC), a Shanghai-based HR services company.

"But over the past five years, Chinese companies have been doing excellently and many of them have been listed abroad. They have demonstrated their competitive strength," Chen told China Daily, "Now they can offer salaries and bonus plans that are competitive with foreign companies, which makes them increasingly attractive for high-level management professionals."

A report from CIIC said that the annual salary for management positions in Chinese enterprises is basically equal to that in Japanese enterprises, about 200,000 yuan ($30,880) a year (before tax), while for European and US enterprises it is about 250,000 yuan a year. For director positions, European and US enterprises generally provide an annual salary of more than 400,000 yuan, while Chinese enterprises offer more than 300,000 yuan and Japanese enterprises about 300,000 yuan .

For senior management positions, the annual salary in a European or US enterprise is about 800,000 yuan, while large Chinese enterprises offer about 600,000 yuan and Japanese enterprises about 500,000 yuan.

But Chen said that it is not only the salaries that are driving high-level talent toward Chinese companies. It is also a better personal career path.

"Multinational companies have developed for a long time in China, and practiced a localization strategy, but even so, a lot of senior management positions are still dominated by foreigners. High-level Chinese staff often find it's hard to break through the bottleneck and advance," Chen explained. "They have no scope for their particular talents."

"Some large Chinese companies, on the other hand, can provide sufficient room for people's career development," Chen added.

"Chinese enterprises have developed very fast and improved effectively over the past years in terms of the management level, working environment, compensation packages, as well as the promotion system. They have competitive advantages over their foreign counterparts in recruiting staff," said a 33- year-old man, surnamed Wang, who declined to give his full name.

Wang currently works as a department manager in a US technology company but he hopes he can move to a Chinese company, especially a State-owned company.

"State-owned enterprises have improved their market performance and have comprehensive competitiveness. That means there may be more opportunities for self-development," Wang said.

State-owned enterprises overtook foreign and private enterprises as the top destination for job-seeking graduates in 2010, according to a survey of 200,000 students conducted by ChinaHR.com. Eight of the top 10 companies named in the survey are State-owned.

Chinese companies are more popular among students born between 1980 and 1990, majoring in science and engineering, according to a survey by Aon Hewitt, a global human capital consulting company.

Aon Hewitt polled graduates over the past two years and found that China Mobile, Alibaba and Haier have overtaken Google and P&G to become the most popular employers among graduates.

Mar. 16 ? While 10 years ago, China?s low-cost labor force was one of the major drivers pushing foreign manufacturers to choose the emerging nation as their production base, nowadays China?s human resource (HR) market is witnessing significant changes alongside its developing industrial landscape. But while it is widely recognized that hiring is becoming more expensive across the country ? especially in some industries and in major coastal cities like Shanghai - it should also be noted that the overall HR market is becoming more mature for employers.

More expensive hiring

According to the latest statistics released by Robert Walters in its 2011 China Salary Survey, recruitment activity increased in the first half of 2010 and peaked between April and June as the Chinese economy quickly recovered from the Global Financial Crisis amid strong market conditions. The survey predicts that in 2011, salary rises are likely to be around 10 percent across various industries, while top-tier candidates may command approximate 15 percent to 30 percent increases in their compensation.

The size of a company?s hiring budget is closely related to China?s policy alterations and economic development focus. Furthermore, a strong demand for information technology (IT) advancement, encouragement in merger and acquisition (M&A) activities, prosperity in consumer markets, and China?s attempts to further open up its financial sector mean that businesses in the fields of financial services, accounting, IT, sales and marketing may need to prepare bigger paychecks for their employees.

Shanghai: an increasingly mature HR market

Zhang Sheng, the Commerce Finance Division manager of Robert Walters, describes Shanghai as the third most mature hiring market in Asia among commerce-centered cities, following Hong Kong and Singapore. As Shanghai gains growing global presence and is ready to accommodate headquarters of international businesses, employers will be impressed to find out there is a significant number of candidates available with both local and international experience that make them completely qualified as being ?decision makers? instead of ?command followers.?

Professionals with local experience in the Shanghai market are of much value for employers who look to set up their business in Shanghai, since many of them have grown and learned with China?s rapid development and reforms in the past decade. The distinct development stages China has gone through in such a short period has enabled them to master a much wider span of business knowledge than those working in a country with relatively stable development.

The Shanghai HR market?s maturity also resides in its mounting diversity and comprehensiveness.

?You can find professionals at all levels to meet your demands in the city,? Zhang emphasized.

The overall national infrastructure development has not only made it easier for companies that want to take advantage of the lower cost in China?s inland cities to relocate their manufacturing bases and build up a national supply chain, but it also makes it more possible for those employers to hire people who are willing to relocate. The changing attitude to relocation means a senior manager can stay with a company longer, have a better understanding of the company?s periodical strategies, and thus become more qualified for participating in long-term decision-making.

The staff loyalty mystery

While loyalty is supposed to be highly valued in the Chinese culture, staff loyalty is becoming more and more of a mystery for many employers. On one hand, with a massive HR supply, the competition in China?s job market is fierce; on the other hand, companies still often find it difficult to maintain a comparatively stable staff since many employees hop from one job to another frequently for better opportunities or pay.

Zhang believes that low staff loyalty has something to do with China?s growth pattern. The country?s fast shifts in development focus has led to professional shortages in some fields. For example, While China?s M&A market just started booming two years ago, the supply of professional accountants that can help complete compliance processes failed to meet the surging demand, because it definitely takes longer than two years for an accountant to grow mature and competent enough for those positions. The imbalanced supply-demand relationship resulted in companies bidding for the limited amount of professionals, and finally facilitated the phenomenon of ?job changers.?

In order to maintain valuable employees, companies may need to take a closer look at China?s policy trends to receive a better understanding of when is the best time to offer employees more incentives. A universal 30 percent post-financial crisis salary increase in many companies that cut redundancy during the crisis is a good example showing how those employers perceive the ever-changing HR market conditions during different periods.

HONG KONG (MarketWatch) ? Headhunters recruiting in China say they?ve rarely seen busier times.

Domestic and multinational companies seeking to bolster staff as part of bold expansion plans in the Chinese market have sparked frenzied bidding to attract qualified personnel across a broad ranges of industries, recruitment experts say.

Candidates with the right level of education and skills are typically seeing inducement offers that include salary increases of 40% to 50%, in addition to enhanced responsibility.

?I think China is the hardest place right now to secure talent and to retain talent,? said Christine Greybe, president of recruitment firm DHR International in Hong Kong.

She estimates that about 30% of candidates who plan on leaving their companies receive counteroffers which match or even exceed the rival offer, as companies grow wary of the loss of personnel through poaching.

?A lot of attention is going towards finding ways to keep talent, which is very unusual to anything we saw before,? Greybe said.

The hiring drive reflects ambitious plans among multinationals to secure opportunities in China. In some cases, companies are seeking to double or even triple managerial staff within a few years, cramming growth that would normally happen in a 10-year window, experts say.

?There?s been a redoubling of growth imperative of by multinationals trying to head into Asia, because companies are finding it hard to grow in the U.S. and Europe,? said Mike Game, the Hong Kong-based Asia chief executive officer for multinational recruitment company Hudson.
China growing its state media

China's state media are expanding aggressively to compete with private Internet companies.

Mainland Chinese companies are also offering more competitive wages for their senior executives, shrinking what?s been traditionally a gap with compensation packages offered by multinationals.

In some cases, Chinese companies are now paying salaries and packages that meet or beat those offered by Western companies, says Greybe, adding executives in technology companies ? such as Chinese Internet giant Tencent Holdings Ltd. /quotes/comstock/22h!e:700 (HK:700 218.20, -6.00, -2.68%) /quotes/comstock/11i!tctzf (TCTZF 28.94, +0.09, +0.31%) ? look more to stock options and other forms of compensation outside of salaries.
The place to be

?China is the place people want to be. They are not interested in a job in the U.S. in the way they may have been two or three years ago,? Greybe said, referring to China-born professionals.

Chinese companies accounted for 54 of those in the Fortune 500 list in 2010, up from 35 in 2008.

Greybe said that some clients take the view that careers spent at home could pay bigger dividends, given China?s rising status in the global economy.

In fact, leading Chinese firms are now more sought after than multinationals among mainland engineering graduates born between 1980 and 1990, according data compiled by recruitment company AonHewitt.

The jobs squeeze is also spilling over to service-center hubs outside mainland China, including Hong Kong and Singapore.

Lawyers with the right educational profile and job experience can expect to receive a half dozen offers within a few weeks, said Denvy Lo, a senior consultant with legal recruitment specialists Laurence Simons.

It?s fairly standard to expect pay rises of 30% to 40% when jumping firms, she said, adding that the frenzied recruiting conditions are reminiscent of the boom times of 2007.

?They will look around to see who can offer them the most and the best package,? Lo said.

Among those most in demand are China-born candidates who completed law degrees in the U.S. and have a few years? experience with multinational companies in Asia, Lo said.

About three quarters of companies operating in China expect to increase wages by over 5% in 2011, a survey by British recruitment firm showed on Wednesday.

The finding comes amid a boom in China's middle class, a result of the country's economic success, and highlights the high inflationary pressures in the pipeline as well as rising costs faced by many companies.

Most companies in China to hike wages in '11: Survey

Chinese employees "are now in a stronger position than they were previously. They have a much better understanding of their worth in the market place and are aware of their bargaining power," said Nigel Heap, managing director of Hays Asia Pacific.

The annual salary survey of more than 5,000 employers based in Shanghai and Beijing showed more than half expect to increase salaries between 6-10% over the next 12 months while a third intend to hike them by more than 10%.

Wage inflation is being propelled by fast economic growth in smaller or so-called tier-two cities, which has given hundreds of millions of migrant workers the option to return home where the cost of living is cheaper, Heap said.

Labour demand has risen significantly in tier-two cities following massive investments by the government in the past two years to develop inland areas, he said.

Rising wages put pressure on inflation although that is being compensated for by even faster gains in productivity for now. Data showed on Tuesday core inflation, stripped of volatile food prices, jumped to its highest in at least a decade in January.

Still, the Chinese government is encouraging wage hikes as it wants to boost consumer spending and reduce the economy's reliance on exports.

In January, the city of Beijing raised the minimum wage by 21% while Shanghai's mayor has said he plans to raise it by more than 10% this year given the fast pace of development and soaring food prices.

Guangdong province, the mainland's manufacturing hub, will reportedly raise its minimum wage by an average 18.6% from March.

Multinationals operating in China such as Yum Brands Inc have already seen commodity-induced cost inflation eat into their profit margins.

The owner of the KFC, Pizza Hut and Taco Bell fast-food chains forecast this month rising 2011 labour and food costs in China and said that modestly raising prices in its top growth market would help mitigate that pressure.

HONG KONG (MarketWatch) -- Chinese companies plan to pay out larger discretionary 2010 year-end bonuses, as a percentage of base salary, than companies in Hong Kong or Singapore, according a quarterly survey released Thursday by recruitment firm Hudson. About 20% of China companies surveyed will pay bonuses equivalent to 20% or more of base salary, while only 16% of firms surveyed in Hong Kong, and 15% of Singaporean companies will be as generous. China companies also outpace their counterparts in terms of the percentage planning any sort of bonus packets, with 92% of companies to offer the payouts, compared to 87% in Singapore and 82% in Hong Kong, the report said.

China has raised the compensation to be paid through work-related injury insurance during a regular meeting of the State Council chaired by Premier Wen Jiabao on Wednesday.

Regulation on Work-related Injury Insurance and the measures for the control of invoices were revised at the Wednesday meeting.

According to the revision, the compensation to families of those who die from work-related injuries has been raised to 20 times the per capita disposable annual income in urban areas. For work-related disability, the compensation rose by one to three months of salaries of the insured employee.

The revision has also widened applications of the regulation. Previously, only enterprises and small business employers were obliged to pay the premium, but now public institutions, social groups, non-profit grass-root organizations, foundations, law firms and accounting firms will also provide their employees with work-related injury insurance.

The revised measures on management of invoices calls for strict punishments to those engaged in producing, selling and using fake invoices.

Job prospects for executives at multinationals in Greater China and Singapore have improved sharply in the past three months amid growing optimism that Asia's recovery from the global recession will be sustainable, a quarterly survey showed on Thursday.

'Asia is the first region to emerge from the global recession, causing employers to revise their hiring expectations sharply upwards,' said Mike Game, chief executive of executive recruiters Hudson Asia.

In China, hiring prospects picked up for the first time in more than a year. The proportion of employers in China, Hong Kong and Singapore who plan to cut headcounts within three months is less than half that in a similar survey taken in May. The latest survey was taken in August.

Hiring expectations have increased most in Hong Kong, where 35 percent of companies say they expect to recruit staff within three months, up from 22 percent in May. In media, public relations and advertising, 69 percent of companies said they would be hiring, compared with 28 percent in the previous survey.

In China, 39 percent of employers said they planned to add staff, up from 27 percent in the May survey, with companies in banking and finance most bullish about hiring.

Hong Kong and Singapore pulled out of recession in the second quarter while China on Thursday announced an 8.9 percent surge in third-quarter GDP, putting it easily within reach of its 8 percent growth target for this year, economists say.

WAGE GROWTH

Salaries are set to accelerate across Asia next year as business conditions improve: a survey by U.S. HR consultants Hewitt Consultants forecasts salaries in China will jump 6.7 percent next year after rising only 4.5 percent this year. Pay rises in Hong Kong and Singapore will be more modest at just under 3 percent.

In Singapore, 34 percent of companies in the Hudson survey said they would be hiring soon, up from 26 percent in the May survey, and only 5 percent said they would cut staff, compared with 14 percent in May. The healthcare and life sciences sector continues to offer the best hiring opportunities in Singapore with 44 percent of companies preparing to add headcount, while the consumer sector has seen a slight fall in hiring expectations since May.

Singapore employers were most willing to hire candidates who had been unemployed for more than a year, or an extended period of time, while employers in China were least willing to do so, according to Hudson.

Previous experience and specialist skills were cited as the main reasons to hire the long-term unemployed across the region but, in China, stopping work to obtain a higher qualification was also seen as a valid reason.

The quarterly survey covered responses from nearly 2,000 managers at multinational companies across industries in the three markets.

(Reuters) - The frustrations of companies in coastal China trying to hire enough workers may become a permanent headache, foreshadowing higher wages, according to a top labor economist.

CHINA

Labor shortages, especially in export hubs in China's coastal provinces, have intensified since last month's Lunar New Year holiday, when tens of millions of migrant workers headed back from coastal factories to their home villages.

Beijing regards the bottlenecks as a temporary, regional phenomenon. But Cai Fang, head of the Institute of Population and Labour Economics with the Chinese Academy of Social Sciences, disagreed.

"It's certain that the migrant worker shortage is here to stay in China," Cai told Reuters.

Factories are finding it tough to recruit even though China's working-age population, in the 15-64 age bracket, will not peak until 2015.

Cai said wages for China's 150 million or so migrant workers increased 19 percent in 2008 and 16 percent in 2009, even though exporters were hit hard by the global financial crisis and more than 20 million migrants lost their jobs.

The manager of a shoe factory in the eastern city of Wenzhou said he had been unable to hire 300 workers despite adding 200-300 yuan per month to last year's average salary of 1,500 yuan ($220).

"This year we have a lot of orders, but the problem is we don't have enough workers," he said. Raising prices was not an option because of competition from newly opened factories, so profits were being squeezed, the businessman added.

SHIFT INLAND

"There is little doubt about the long-term trend of rising wages in China," said Cai, a standing member of the National People's Congress, China's largely ceremonial parliament.

Economists at China International Capital Corp agreed that the end of China's demographic dividend would help increase labor's share of national income, driving up consumption.

"Judging from the experiences of Japan and Korea, we are particularly positive about urban consumption of such goods as vehicles, travel services, healthcare, culture and entertainment, as well as the fast growth of rural appliance sales in China over the next few years," they said in a report.

Labor typically accounts for less than 10 percent of manufacturing costs in China, but businesses, many working on thin margins, also face the risk of a rise in the yuan.

Businesses have been able to absorb higher costs by increasing productivity. More and more companies have also been shifting production inland, where labor costs are lower -- a trend that Cai expects to gather momentum.

"A monthly salary of 1,500 yuan in Guangdong may be too low to attract workers; but if that pay is on offer in an inland city, people are willing to take the job," he said.

Cost pressures will also force companies to climb the value ladder -- a key objective of the government's economic policies.

"Sweatshops in coastal areas with low wages, poor working conditions and narrow profit margins are set to go bust," Cai said. "The process of industrial upgrading will speed up."

And as workers become harder to attract, local governments will have to shift from being "pro-capital" to "pro-labor," for instance by raising minimum wages and making it easier for migrants to settle in cities with their families, Cai said.

In Guangdong, which accounts for about 30 percent of the country's exports, the local government plans to raise its minimum wage by more than 20 percent.

China's proactive employment policies and measures in the wake of the financial crisis have generated positive results, Yin Weimin, Minister of Human Resources and Social Security, said on Saturday.

China is expected to create over 11 million jobs in 2009, well above the target set in March this year, Yin said.

In a most important measure taken since the beginning of this year, millions of enterprises nationwide had been allowed to delay the payment of enterprise-contributed social security funds for up to six months, said Yin.

China's social security system is made up of five parts -- pension insurance, medical insurance, work injury insurance, unemployment insurance and maternity insurance.

The measure also temporarily lowered the insurance rates for medical, work injury, unemployment and maternity. In the meantime, the government offered subsidies over the payment of social security funds for enterprises which were in financial difficulties.

Yin told Xinhua that this measure alone had eased corporate burden by nearly 33.9 billion yuan ($5 billion) in the first 10 months this year and more than 1.6 million enterprises had benefited from this measure.

According to Yin, China had generated 10.13 million new jobs in urban areas in the first eleven months, exceeding the government's target of 9 million new jobs for the entire year.

The urban unemployment rate would likely stand at 4.3 percent by the end of this year, which also met the target of below 4.6 percent set in March, he said.

In 2008, China's urban unemployment rate was 4.2 percent.

Private equity (PE) backed companies were more profitable and successful in creating jobs than their publicly listed peers in China over the past seven years, according to a survey conducted by Bain & Company and the European Union Chamber of Commerce.

The survey compared the performance of 100 companies that received at least $20 million PE funding, excluding real estate and bank investments, with 2,424 publicly listed Chinese companies between 2002 and 2008.

PE firms recorded nearly 100 percent growth in jobs and 56 percent in profits over their bigger peers during the period.

More importantly PE firms have fostered inland province development, boosted domestic consumption, transferred management know-how to businesses under their portfolios and greatly improved corporate governance, the survey said.

"Although private equity is a relatively new phenomenon in China, it is fast gaining ground and scoring over others," said Michael Thorneman, managing partner, Bain & Company Greater China.

The biggest contribution of private equity has been the creation of better-run companies. Companies with PE shareholders posted annual revenue growth of 25 percent and an average earnings growth of 39 percent, up 3 percentage points and 12 percentage points over the benchmark companies.

The survey also shows that PE investors are showing keen interest in China's consumer goods and retail industry. While PE investment in China as a whole increased by 58 percent since 2002, investment in the consumer goods and retail industries grew by 77 percent.

PE investments in consumer and retail businesses now rival those in traditionally strong sectors like IT and media.

Retailers backed by PE investors reported sales growth of 47 percent compared with 16 percent for publicly listed retail companies. Consumer goods companies backed by PE investors showed sales growth of 30 percent against 18 percent for listed peers.

"Over 50 percent of the PE firms that participated in the survey felt that consumer products and retail sectors are the most promising sectors, but also felt that the sector would become more competitive in the future," said Thorneman.

Total employment at private equity-financed firms increased by 16 percent over the survey period compared with 8 percent at publicly listed companies. PE-backed firms also pay significantly higher wages. The gross salary growth rates at PE-backed companies outperformed those of the listed companies by 7 percentage points.

Private equity has also been a strong contributor to the government's "Go West" policies. The survey found that 42 percent of the investment was directed to companies headquartered in inland provinces.

"China has emerged as one of the leading destinations for PE capital, and PE capital has a more positive image in China than in other western countries," said Andre Loesekrug-Pietri, chairman of the European Chamber's PE working group.

With Christmas spending just around the corner and memories of frozen annual bonuses lingering from last year, many companies in Beijing are calming employee concerns with news they will come through with cash regardless of economic woes.

"Though some companies said they won't pay out a bonus in 2009, the majority said they would pay no matter what the impact on the business was," said Tommy Li, a senior consultant at Mercer, one of the largest international HR consulting firms operating in China.

Li, who was the product manager for the China Monitor Report, a quarterly survey containing the most updated HR trends in China, said most companies froze or postponed yearly bonuses in 2008 due to the dire global financial situation.

The China Monitor Report, which surveyed over 290 companies, found that more than 69 percent confirmed they would pay yearly bonuses this year despite the global financial crisis. Only 4 percent of companies said they would not.

In addition to the return of year-end bonuses, the China Monitor index found that jobs are on the rise. In the fourth quarter of 2009, over 78 percent of business said they had plans to hire new employees and less than 10 percent said they would downsize.

One sales director of a Beijing-based metals business said that he fears his company will lose employees in the reviving employment market. With the exception of last year, he said he has noticed a trend of employees leaving his company after receiving their yearly bonuses.

"There's a joke in my office about it. Every year, out of the 15 people that report to me, I lose anywhere from three to five," he told METRO, requesting that he not be named.

He said employees feel less incentive to stick around after receiving the year-end payout.

Though the company gave out bonuses last year, much to his surprise, he said his salary had been frozen. "This year, with companies starting to hire again, I expect to see a lot of movement. Most people stayed at their jobs last year, grateful just to have a paycheck, but with confidence restored and hiring resuming, I think this year will be different," he said.

The Accor hotel group on the other hand is taking a different approach to distributing end of the year bonuses.

"The bonuses of our salaried employees engaged in the corporate office are assessed against several criteria - including the performance of the company," said Robert Murray, Senior Vice President of Greater China for the ACCOR Hotel group.

Murray, who has been working with Accor, a foreign public company listed in France, for more than five years has seen shifts in the market. He said Accor's system allows employees to share in both the good times and the more "challenging times", such as the 2009 economic crisis.

"Although it is yet to be determined, it is fair to say that bonuses for this year will be examined in line with results," Murray said.

He added that employees at the hotels, outside of the corporate office, are usually given bonuses based on individual successes of their hotel.

"There will be mixed outcomes of bonus payments to these employees," he said.

Employees in China’s richest city, Shanghai, saw salaries stagnate this year – at least compared with what they have grown used to.

They can’t expect much of a pick-up in 2010 either. Perhaps worse for many Shanghai workers used to ever-upward mobility is that its people will do merely as well as the rest of China.

Human-resources firm Hewitt Associates LLC on Thursday predicted average annual salary increases will be 7% in 2010, about equal to what is expected nationwide.

That won’t necessarily make things comfortable for employers. Hewitt’s Shanghai Compensation and Benefits Study concludes that for employers, it will be back to the challenge of hiring enough good workers: “In order to hire more talent, enterprises have put salary increases on the agenda.”

The study, which included 911 enterprise participants, shows the average annual salary increase in 2009 in Shanghai was 5.2% in the non-manufacturing sector and 5.4% in the manufacturing sector, about half the 11.2% and 10.1% increases seen in those sectors in 2008. The average lagged the national level of a 5.8% increase in salaries in 2009.

“As an international financial metropolis, Shanghai is inevitably influenced by financial crisis,” the firm said.

Rather than layoffs, it found salary freezes in Shanghai this year. The voluntary rate of turnover – job-hopping – slid 3.4 percentage points in 2009 to 13.9%, the firm found.

The employees still commanding good increases this year: pharmaceutical and medical-device firms, up 8.9% and 9.1% respectively.

The market for new job seekers was tougher than ever. The average starting salary for a fresh university graduate was 45,153 yuan ($6,615) this year, while post-graduates could earn 63,732 yuan.

Separately, Standard Chartered Bank economist Stephen Green, in a report Thursday, takes issue with the conclusions reached in China’s effort to track urban private sector wages. He said the National Bureau of Statistics study probably captures only about 42% of the nation’s 450 million workers. Since the ones missed are likely lower-paid migrant workers, the official statistics probably overstate actual wages, said his report.

Mr. Green puts the urban wage at 1,476 yuan a month, compared with the government’s estimate of 2,077 yuan.

Many workers in Guangzhou are facing salary cuts or job losses, as both the private and the public sectors struggle in the midst of the economic crisis.

As many as 40 percent of the State-owned enterprises (SOEs), or government-controlled shareholding companies, have reduced or plan to reduce staff salaries in the prosperous southern metropolis, according to a recent survey conducted by Guangzhou Urban Survey and Research Center.

More than 50 percent of the city's privately-operated companies have cut jobs in the past months, according to the survey.

But less than 10 percent of the Party and government departments and bureaus have cut staff or reduced salaries.

"Many SOEs have run into difficulties this year because of the worldwide financial crisis," said a manager from a local SOE yesterday.

Requiring staffs to increase their days off, limiting overtime working hours, reducing salaries and cutting staff have become common measures to fight the financial crisis, said the manager who declined to be named.

"I hoped all the staff can join hands with us to conquer the difficulties," he added.

More than 83 percent of Cantonese people said their lives have been affected by the financial crisis in the past months, the survey showed.

Only 16 percent of the interviewees said their lives have remained unchanged under the economic slump.

And more than 78 percent of the interviewees are cautiously optimistic about salary increases in 2010.

The survey interviewed 1,016 residents in the city's downtown districts of Yuexiu, Liwan, Haizhu, Tianhe, Baiyun and Huangpu in September.

Chen Zhaomin, a staffer from a logistics company, said his monthly salary has not been reduced, but all his allowances for travel, telecommunication and entertainment have either been cancelled or sharply reduced.

"And I have not worked any overtime this year, because my boss cannot pay me overtime," Chen told China Daily yesterday.

Chen estimated his annual income would decrease by about 20 percent this year.

And Wang Cuihong, an accountant from a private firm, said that since the beginning of the year her company has forced staff to take an additional 20 days off every six months.

Also, the staff are usually given only 20 percent of their wages when they are on holidays, Wang said.

Affected by the income reduction, Wang and her family have cut daily living expenses by at least 10 percent this year, she said.

Jiang Jianqing is head of Industrial and Commercial Bank of China, the world's largest bank by market capitalization. His 2008 earned compensation totaled $234,700.

On the other hand, there's the pay of CEOs in the US that needed billions in bailout funds from the US government to stay afloat after taking reckless and over-leveraged bets. The largest US bank CEOs earned in 2008: JP Morgan - $19.6 million, Bank of America - $9.9 million, Wells Fargo - $13.7 million and Citigroup - $10.8 million.

This is the ultimate in heads I win, tails you lose. Long have we justified higher CEO in America pay because of their outperformance compared with banking institutions around the world. Yet, to operate in a capitalist system, executives cannot be able to realize such compensation when their bets go sour.

HONG KONG: Listed companies may lose their talented senior executives amid the economic recovery if the shareholders apply too much pressure on companies to rein in management salaries during the recession, a global human resource expert warned.

Rows over executive salaries and bonuses have intensified, as the global financial crisis wiped out significant share value on the Hong Kong stock exchange.

Minority shareholders in Hong Kong have urged senior management teams to give up their multi-million-dollar salaries and bonuses, as a token of regret for their failure to make their companies profitable.

Don Linder, practice leadership manager of global human resources organization WorldatWork, told China Daily in an exclusive interview that it is not desirable to try to cut executives' salaries and bonuses in order to comfort the minority shareholders who have seen their investment capital shrink amid the global financial turmoil.

He said that the annual bonuses for senior executives usually consist of stock options and restricted shares. The executive bonuses, therefore, align with the share performance and the success of the listed companies.

As for the salaries being undeserved, he suggested that they are automatically adjusted down as well as up, as the company's performance and fortunes change. "When the company isn't doing well or the economy isn't doing well, the executives get paid much less, just like the shareholders," Linder said, "The executives will automatically get a pay cut, if the share price falls."

Even though the senior management may have been paid less in bonuses amid the financial crisis, some chief executive officers in the US have taken bold steps forward to make their shareholders feel better.

Earlier in February, chief executive officer of Citigroup Vikram Pandit announced he would take a salary of only $1 and no bonus until the New York-based bank, which has received $45 billion bailout money from the US government, returns to profitability.

Although Citigroup is still dripping red, Pandit's determination has gained him praise and recognition in the market.

Commenting on the one-dollar executive salary, WorldatWork's Linder said the senior executives usually get very large long-term incentive packages, to offset the salary they have given up.

"It is public relations to a degree," he said, "I think it makes shareholders feel better..."

BEIJING, Sept. 24 (Xinhua) -- China's banking regulator told Xinhua Thursday night it does not place limits on the pay of the country's commercial banks' top executives.

The China Banking Regulatory Commission (CBRC) said it noted that some of the country's media reported the CBRC was drafting a document to regulate the pay of bankers from commercial banks.

Every country was trying to correct the improper incentive mechanism to curb excessive risk-taking which sparked the current financial crisis, said the CBRC.

"The CBRC has been working with other relative departments on improving the wage incentive mechanism for the country's banking industry since last year," an official from the CBRC, who declined to be named, said in response to the media reports.

"The aim was to introduce scientific guidelines on incentive mechanism by integrating executives' pay and operation risks," said the spokesman, adding the CBRC is not directly responsible for regulating bankers' remuneration.

Detailed pay setting should be determined by individual financial institutions, according to the official.

Zhaopin.com and cn.yahoo.com have sponsored human resource experts to analyze China's job market in 2010 on the basis of trends in China's economic development. Job hunters may wish to use this as a reference.

Position: On-site interpreter

Annual salary: 400,000 yuan

On-site interpreters have been labeled as the most desirable professional in the 21st century. As China adopts more international standards, economic exchanges with the outside world and international activities in China are increasing. This has resulted in an urgent demand for more on-site interpreters.

An on-site interpreter's salary depends on their work hours. Typical pay is 4,000—8,000 yuan per hour. According to information, an increasing number of large foreign enterprises will set up branches in China and Beijing in the next 4 years, and on-site interpreters will enjoy steadily increasing salaries.

Position: logistics engineer

Annual salary: 100,000 yuan at present

According to statistics released by relevant Chinese institutions, demand for logistics personnel is expanding sharply. At present, China faces a shortage of 6 million logistics personnel. Statistics also show that many logistics engineers were previously engaged in other work and very few have received professional training.

At present, only 21 percent of China's logistics professionals have university education. According to information, Shell Group offers between 6,000 and 8,000 yuan per month to fresh graduates the company employs in China.

Reporters learned that the industry will grow significantly in the next year. "At present, the basic annual salary of a logistics professional is 70,000 yuan. As the world's energy resources are shrinking, relevant Chinese professionals may receive higher salaries in four years."

Position: Environmental engineer

Annual salary: 80,000 — 100,000 yuan

Statistics show that there are only 130,000 people specializing in environmental protection in China, including 80,000 technicians. Judging from the number of environmental protection personnel in developed countries, China now needs 420,000 environmental engineers.

According to industry experts, the monthly salary of a park or garden designer, or a landscape gardener is about 7,000—8,000 yuan. With the development of China's real estate industry, the annual income of an environmental engineer will reach between 80,000 and 100,000 yuan next year.

Position: 3G engineer

Annual Salary: from 150,000 — 200,000 yuan

According to statistics released by CCW Research, China has a shortage of more than 500,000 3G professionals.

Due to the serious shortage of 3G personnel, the basic annual salary of a 3G engineer will reach between 150,000 and 200,000 yuan in 4 years.

According to Kong.net, some trends indicate that the annual salary of personnel specializing in wireless value-added services who have 2.5G technology skills is about 100,000 yuan. The salary of these individuals will certainly increase when the actual deployment of 3G technology becomes a reality.

Position: Network media professional

Annual salary: 100,000 — 120,000 yuan

Industry experts revealed that the monthly salary for a website editor currently stands at about 5,000 yuan while the salary for a manager is between 8,000 and 10,000 yuan.

"When the network media industry is able to reap a higher advertising revenue in four years time, the salary of relevant professionals will inevitably rise." This editor is quite confident about this industry.

According to this editor's estimation, the annual income for a network media professional should reach between 100,000 and 120,000 yuan in the future.

Position: Network architect

Annual salary: 100,000 — 200,000 yuan

According to zhaopin.com, the basic annual salary for a network architect who has just graduated from university and has no social experience is 80,000 yuan.

As Chinese consumers demand better network architecture services ranging from network construction to network use, and advice on work flow and resource strategy, network architects will earn more in the future.

Position: Actuary

Annual salary: 120,000 — 150,000 yuan

According to statistics released by relevant Chinese institutions, less than 10 Chinese actuaries have been accredited by the international insurance community.

China announced Wednesday a guideline to regulate salaries for executives in the country's 135 centrally-administered state-owned enterprises (SOEs).

The document was jointly issued by six administrative departments of China's central government, including the Ministry of Human Resources and Social Security, Ministry of Finance, the State-owned Assets Supervision and Administration Commission, and National Audit Office (NAO).

The document set guidelines in salary structure and payment, position-related consumption, and supervision and management, in a bid to establish and perfect incentive and restraint mechanisms regulating SOE executives' salaries.

The annual salaries structure for SOE executives is composed of basic salary, pay-for-performance, and incentive earnings in the mid and long term, according to the guideline.

It stipulates pay-for-performance of executives should be based on the enterprises' business performance.

The annual salaries of executives should be in line with those for employees in the previous year, in a bid to narrow disparity between executives' and employees', the guideline said.

Departments, including the NAO and the Ministry of Supervision, will be required to monitor the implementation of the regulations, and to undertake punitive measures in the event of irregularity.

Employees at international firms on China's mainland enjoyed more disposable income this year than last year due to a drop in inflation, according to a report released yesterday by Hay Group, a global consulting firm.

Though the average salary increase over the past 12 months from August 2008 was 5.3 percent, which is much lower than the 10.2 percent rise last year and 9.1 percent in 2007, the real wage inflation this year is 5.9 percent, even slightly higher than that before the financial crisis because of the high consumer prices in the past two years.

Real wage inflation is the average base salary movement minus Consumer Price Index, the main gauge of inflation.

"Many employees may complain they haven't got salary increase since last year. In fact they have already enjoyed a rise in disposable income, even higher than last year, due to the lower CPI," said Henry Sheng, a Hay executive.

Zhu Qingyang, an official of Shanghai Human Resource Agency Association, said: "It is difficult to foresee an optimistic future in the salary increase because of the current uncertain economic environment. We should wait and see."

CHINA has dropped the practice of levying full income tax on the 13th month salary, or double pay, as it wants to ensure the tax is fair, said the State Administration of Taxation yesterday.

Before the move, the 13th month pay was subject to full income tax, without deduction.

For instance, social welfare, health and public housing fund and the 2,000 yuan individual income tax threshold can be deducted from a regular monthly salary of 10,000 yuan (US$1,464) before income tax is levied. However, the full income tax was fully levied on the 13th month pay of 10,000 yuan.

The SAT was not available for immediate comment.

As the SAT doesn't usually give a clarification on a new practice, an unnamed tax industry expert with one of the big four accounting firms said there are two possibilities.

One possibility is that the 13th month pay can be deemed as a one-off whole-year bonus, which enjoys a low tax burden.

The pay is divided by 12 months and then taxed. For instance, the taxable income is 833.33 yuan (10,000/12) in the method based on 10,000 yuan monthly salary.

The other option comes with a stricter tax. The 13th month salary can be combined with the December salary for taxation. It means a higher tax with pay being doubled.

"It really depends on the explanation from the local tax man on the practice," said the source. "In practice, both methods can be applied."

Meanwhile, SAT also makes it clear that Chinese studying or working overseas can't be regarded as overseas Chinese to enjoy a bigger tax deduction.

People who obtain property rights in a divorce are exempted from income tax. But if they sell the property later they have to pay income tax on the transaction.

A Chinese official says the government is writing up a document to more effectively regulate State-owned enterprises (SOEs) as well as executives' salaries.

Hu Xiaoyi, Vice Minister of Human Resources and Social Security said the document would be released in the near future during an Aug. 4 press conference held by the State Council Information Office.

Hu said two steps would be taken to regulate SOE executives' salaries. The government will firstly regulate the salaries of SOE executives in central enterprises and then instruct local governments on setting the salaries of those executives running local companies.?

"Five principles are used to formulate this document," Hu explained. "We should combine market regulation with government supervision; strike a balance between short-term and long-term financial incentives for their achievements; improve salary regulations; provide insurance for employees; and coordinate salary increases for executives of SOEs and for employees."

The government in Shenzhen has lowered the income benchmarks for the first time since 1999 to soften the impact of the financial crisis on local companies.

The municipal labor authority issues the income benchmarks annually to serve as a reference for 566 types of jobs in the city.

The highest-level and medium-level benchmarks stand at 23,700 yuan ($3,470) and 2,460 yuan per month, respectively, decreasing by 8.5 percent and 3.9 percent each from last year.

However, the low-level income benchmark gained a 7 percent year-on-year rise this year to 1,102 yuan per month, which labor officials said should be attributed to the government's measures to protect low-income laborers.

"Our payment adjustment policy is to control the high-income group, expand the medium-income group and protect the low-income group. It's a way to narrow down the income gaps," said Wu Liyong, director of the income division of Shenzhen Labor and Social Securities Department.

Workers are encouraged to use the benchmark when negotiating their wage with employers.

Last year, the official surveys showed that the lowest-level salaries on average were 25 times less than the highest salaries. This year, surveys showed that gap has narrowed to 21.5.

The authority also recorded the biggest income gap in the financial industry, including security houses, insurance companies and banks, where the highest-paid person could be earning 80 times what the lowest-paid person earns.

Several residents polled by China Daily yesterday in different industries expressed their concerns about salaries shrinking this year.
"Possible pay raise this year? Are you kidding? I would feel relief if no pay cut occurs," said Lin Zhen, an accountant working for a leading computer manufacturer.

Liu Yue, a manager at a State-owned bank, said some of her benefits have been greatly cut since early this year, including money for travel and major public holidays.

"Our salaries have been increased over the past few years given the relatively low level in the industry, but I still feel the total wage was reduced this year. I learned that the salary cut was even bigger in banks that have offered top payment in the industry," Liu told China Daily.

Piao Ye, a human resources manager at a beauty salon, said the income for the entry-level workers has not been increased as much as the government indicates.

"The company provides dormitories to them and they could get 1,000 to 1,500 yuan a month, which could just maintain a very simple life in the city with high consumption index," she said.

Officials at the labor authority said they are not making plans to further increase the minimum level this year.

SHANGHAI will launch a "financial talent award" soon to make the city more attractive to foreign financial specialists, said Fang Xinghai, director of the Shanghai Financial Services Office, yesterday.

The award also allows for a lower tax burden for expatriate financial talents in Shanghai and aims to build the city into an international financial hub by 2020.

"We can't change the standard of the individual income tax on foreigners working in Shanghai - that is a national issue. But we do hope to attract more financial talents into Shanghai by lowering the tax burden on them," Fang said at the First European Union Shanghai International Financial Forum.

He said the award will be given to senior foreign executives working for Shanghai-registered financial firms and details of the incentive will be announced soon.

Compared with Singapore and Hong Kong, the Chinese mainland imposes a relatively high individual income tax of up to 45 percent on foreigners working in the city, which hurts Shanghai's ability to attract foreign talents, said Fang.

He also noted Shanghai will soon set up two special financial courts in Huangpu District and Pudong New Area to deal with financial disputes.

Meanwhile, Fang urged the central government to give Shanghai more freedom to innovate.

These efforts are aimed at accelerating Shanghai into an international financial center. The State Council, China's Cabinet, backs developing Shanghai into a global center of finance and shipping by 2020.

By Patrick O. Courtois

The Beijing Olympics have had a great impact on the city of Beijing, where a large infrastructure refurbishment initiative, fresh developments and a massive English language training campaign have been some of the elements of a drastic change and an amazing source of business opportunities for both local and foreign companies. Shanghai, with its upcoming Universal Exposition in 2010 is going through the same face-list, with the replenishment of the famous bund area, the accelerated infrastructure changes much needed to ease the megalopolis congestion problem and much more. Commercial opportunities are as well rising fast toward the May opening of the Exposition; opportunities that are being seized by both for local and foreign companies.

I have anticipated a rise in solicitaton from pavilion ran countries. Tendering processes are going on in most country having a pavilion presence, and many overseas third parties have, and still are, gotten in touch with me for solutions in search and selection of the pavilion staff, but most importantly staffing, enabling each pavilion to legally employ staff, local Chinese or foreign nationals, without having to establish a legal corporate entity in China. My firm being fully licensed and resourced for both activities it is of course a solution that we are capable of handling.

However what was not anticipated is the rise in solicitation from overseas SMEs.

Some the challenges faced by SMEs, while trying to seize their share of the tremendous financial and marketing opportunity the Exposition yields, can be briefly summarized as such:

• No local contact / connection in China
• No interest in forking out the additional cost, not to mention the lengthy process, of setting up a corporate legal entity for the limited duration of the Exposition (6 months)
• how to source bilingual and qualified employees locally
• how to legally employ local and eventually foreign national staffs during the Exposition period
• …

The opportunities are there, the challenges as well, but most importantly, solutions exist. Solutions that are legal, hassle free and well… affordable.

When you are operating an overseas SME, with a limited margin for error or financial flexibility, the process of establishing a commercial or operational presence in China can be seen as a daunting task. Entrusting a local business partner becomes therefore a viable solution, as you can stress-free focus on what you do best, that is sell and promote your products/services, while the local partner handles the “Chinese” side of things, like recruitment, employment, payroll, labor law compliance and so on, on your behalf.

Before signing up with a staffing company a few essential points are to be kept in mind:

• Do your research and make sure the firm you are engaging yourself with is LEGALLY LICENSED… that make sense, in the west at least, but I can guarantee you that a casual “sure, I can help” answer, here, is not what you should expect.
• Make sure they do have experience and references available for their staffing activities…
• Compare prices, as tariffs for staffing solutions can go from a few thousand US Dollars to a few hundred Chinese RMB from a firm to another, per month, for pretty much the same service level…
• Make sure that the firm has the INTERNAL resources to provide you with a pro-active and professional service. Too many firms around will be happy to take your money but will outsource payroll, contracts, … In China, quality is not always here while dealing with third parties suppliers…
• Foreign staffing firm versus Chinese firm? This is entirely your choice… but bear in mind that a foreign firm does not necessarily have the flexibility a local firm can have in terms of terms of quick fixes and might not be able to provide additional services like last minute lodging, visa and such… In addition, a foreign firm might have larger overheads and as such that might impact the quote you received.
• Finally, trust your guts. If the few emails you exchanged gave you a somewhat dodgy feeling or your primary contact gives of the sense of being “lost in Translation” at every phone conversation … walk away…

…or better, call me!…

Patrick O. Courtois is the Director of Operations at DaCare Executive Search, a leading executive search and HR services consultancy, based in the heart of Shanghai, China. (http://www.dacare.com/). Patrick has extensive management consulting experience in Asia, as well as European markets. With a current focus in executive talent sourcing in Greater China, Patrick engages with multinational clients in professional services, hi-tech communications and industrial manufacturing. Visit Patrick’s HR blog at http://hrshanghai.blogspot.com/.

Dozens of employees from Baidu's (Nasdaq:BIDU) South China subsidiary stopped work and began protesting changes to their salaries in front of Guangzhou's Tianhe District Labor Bureau after negotiations with a Baidu manager failed, reports 163.com. Unnamed employees said they were made to sign a new salary agreement in late April without fully understanding it, and the subsidiary's sales department was required to sign off on new KPI metrics in March, the report said. The salary revision was carried out nationwide and accepted in Beijing and Shanghai, said a Baidu insider. Baidu did not comment on the news, the report said. Baidu Chief Operating Officer Ye Peng said the company had not experienced a strike and seemed unaware of the protest, according to the report.

The new salary system and KPI requirements, which employees described as "impossible to fulfill," became effective May 1 and may halve the salaries of most lower-level sales staff, said employees attending the protest. Management will also accept a large pay cut, they said. According to an unnamed mid-level manager, the changes will affect about 200 employees in Guangzhou and more than 1,000 in the entire South China region, including Shenzhen and Dongguan, said the report.

Ye Peng announced the dismissal of three mid-level managers in charge of sales and operation during his visit to the company's Guangzhou subsidiary on March 27.

China's labor departments help 6.98 million workers get back 8.33 billion yuan (1.22 billion U.S. dollars) of their wages in 2008.

The figures were released Tuesday in a bulletin regarding human resources and social security in 2008 by the Ministry of Human Resources and Social Security and the National Bureau of Statistics.

Labor departments overhauled 1.81 million employers last year and tackled 483,000 disputes, the bulletin said.

Departments focused on redressing problems regarding migrant workers' overdue wages, illegal employment and supervising enforcement of the Labor Contract Law.

The bulletin did not mention how many offenders there were or how they were punished.

Labor problems were also discovered through investigation of complaints from workers.

The bulletin also said labor departments discovered 15.62 million workers did not sign contracts with their employers in 2008, which is required by law.

In addition, about 164,000 employers did not pay around 4.9 billion yuan (718.48 million U.S. dollars) in insurance premiums.

The draft to regulate payment of executives in China's State-owned enterprises (SOEs) is ready for review and approval from the State Council, the country's Cabinet, 21st Century Business Herald cited an unnamed source as saying.

A source from the Ministry of Human Resources and Social Security, the authorized agency to make the draft, told the paper that the regulation will set a guideline on salary structure, performance evaluation and other niches that would affect the salary package.

The salary package would consist of three parts, including the basic annual salary, payment based on performance and mid- and long-term incentives, according to the source.

The source added that once passed, the regulation would narrow the income gap between SOE executives and employees, and set the gap at a reasonable level. The Ministry of Finance, the China Banking Regulatory Commission and the China Securities Regulatory Commission would jointly carry out details of the regulation.

In terms of listed companies, the source suggested amending the corporate law to make sure minor shareholders have a say in deciding the pay of high-level executives, and accelerating the information disclosure process.

Even with non-listed companies, information on high-level executives' pay should also be made public to some extent, a move which will make it easier for stakeholders to monitor, said the source.

Supervision agencies such as auditing, finance and human resource departments are also urged to check the income distribution in SOEs, including high-level executives' pay.

For Liu Kai and Yu Min, about to graduate from Harbin Institute of Technology’s Weihai campus in Shandong Province and on a job-hunting trip in Beijing, the indignities are piling up.

For one, as students from outside Beijing, they aren’t allowed into job fairs held on the campuses of some Beijing universities. At the job fairs they do attend, most jobs are either too low-level, sometimes just requiring a high-school diploma, or too advanced, geared for applicants with years of working experience.

But the main source of humiliation is the issue of pay. For applicants with no work experience, the base salary for a sales job is as little as 1,000 yuan to 1.500 yuan (around $146 to $234) a month.

“We don’t have high salary expectations as long as we can make a living on our own,” says Liu.

But can they live on 1,000 yuan a month?

To put it in perspective, a migrant worker in Beijing earns around 1,200 yuan a month, and many so-called ayis — or aunties, a term for housemaids – can make twice that. As for accommodation, sure, it’s possible to find a 12-square-meter single room beyond Beijing’s Fifth Ring Road for 350 yuan a month but a 1-bedroom apartment rarely rents for less than 1,500 yuan a month, judging from listings at real-estate portal Soufun.com.

A survey of more than 1,000 college graduates from 14 universities in Tianjin finds that 9.8% expect a first salary of below 1,000 yuan a month, while 62% see a monthly pay in the 1,001- 2,000-yuan range, while not one expects a salary beyond 5,000 yuan (in Chinese here).

At the job fairs, Yu finally lands an interview for a sales position with a monthly base pay of 1,000 yuan. A plus is that food and dormitory-style accommodation are paid for. But he still passes on the chance after a phone call from his parents. “My mom strongly rejected my idea to go for this company, as she didn’t think the 1,000 yuan salary was enough for me to survive on in Beijing,” he said.

Yu’s mother doesn’t want him to accept anything for less than 3,000 yuan a month. Judging from the job-fair billboards, that seems an increasingly unrealistic goal. “I don’t see any possibility of that for now,” Yu says.

At a job fair in Zhongguancun, nicknamed Beijing’s Sillicon Valley, a privately owned company selling cosmetics online is hiring telemarketers, at a base salary of 1,500 yuan a month. “We indeed see a lot more college graduates applying for such comparatively low-level positions this year”, said human-resources manager Liu Yansong.

Salaries grew slower and pay disparities between various industries rose last year, the National Bureau of Statistics (NBS) said yesterday.

Salary increases for urban employees were down 1.5 percentage points in 2008, with average salary before tax at 29,229 yuan (4,280 U.S. dollars). The survey did not cover private enterprises or individual businesses.

The salary growth is relatively high given the backdrop of a global economic slowdown," said Su Hainan, director of the wage committee of the China Association of Labor Studies.

"But as people earn more, they more than ever need an improved social security system so that they can spend more to expand domestic consumption."

Su forecast pay increases of 13 percent this year while a report by the Hong Kong based HR Business Solutions predicted salary rises of around 11 percent on the mainland.

The NBS report also showed that the gap between eastern and western/central regions is narrowing, which Su described as a "good sign".

This is partly because export-oriented enterprises in the eastern and coastal regions were the hardest hit in the financial crisis, leading to millions of layoffs.

The report also found the salary divide between the highest and lowest paid industries has widened, with the former 10 times more than the latter.

Salaries in the securities sector were 172,123 yuan, 5.9 times the average level. Employees in timber processing and wood and bamboo products were the lowest paid, with a salary of 15,663 yuan.

CHINA said yesterday that executives of state-owned banks and insurers are paid too much and ordered those firms to cut their salaries to promote income fairness amid an economic slump that has wiped out millions of jobs.

Executive pay for 2008 at financial institutions, which many are still calculating, must be cut to 90 percent of 2007 levels, with deeper reductions at those experiencing financial trouble, the Finance Ministry said.

"Individual financial enterprises pay top executives too much. The gap between them and average workers is clearly expanding," the ministry said in a statement on its Website. It said pay cuts were needed to "further equalize distribution of incomes."

The announcement gave no details on how many levels of management would be affected or how authorities will decide which institutions require bigger cuts.

All of China's major banks, insurers, stock brokerages and other financial institutions are government-owned. But many have Hong Kong subsidiaries that handle a portion of their operations and function as private companies, and it was unclear how executives linked to those entities might be affected.

The ministry praised executives who have already cut their pay, especially at institutions that are financially healthy.

Chinese executive pay is modest by Western standards but many times that of ordinary workers.

Yang Chao, chairman and chief executive of China's biggest insurer, China Life Insurance Co, was paid 1.7 million yuan (US$248,000) last year. That was a reduction from Yang's 2 million yuan in 2007 salary and bonuses.

China's second-largest insurer, Ping An Insurance Co of China Ltd, has been the only such institution to suffer a major loss because of the global crisis. It said yesterday that its 2008 profit fell 99 percent from 2007 because of losses on its stake in European bank Fortis NV, which ran into trouble with credit derivatives.

Ping An's chairman, Ma Mingzhe, announced in February he would give up his 2008 salary because of the Fortis loss.

China's state-owned asset regulator earlier called for lower payments to senior executives at the 141 centrally administered state-owned enterprises.

The growth of senior executives' salaries must be lower than profit growth and reflect performance, Shao Ning, deputy director of the State-owned Assets Supervision and Administration Commission, said last week.

Among the SOEs that have cut back, Wuhan Iron and Steel (Group) Co said it will reduce executive salaries by 50 percent and other employee salaries by as much as 20 percent. Aluminum Corp of China plans to cut executive pay by 50 percent and trim compensation for other staff by 15 percent.

The average gross salary for China's urban residents rose 17.2 percent in 2008, 1.5 percentage points slower than in 2007, the National Bureau of Statistics said yesterday. The average salary for city dwellers amounted to 29,229 yuan last year, up 4,297 yuan from 2007.

The average salary in the securities sector - 172,123 yuan - was the highest among all industries last year.

China Agritech, Inc. said it is implementing a salary program for its senior management team which will reduce the cash compensation of their base salary levels for the 2009 year as part of a new cost control plan.

In a statement, the company said it will consider a performance-based option plan, "to further incentivize the management team to focus on producing greater business and financial results."

As a part of the cost control measures, China Agritech is also reducing the standard of senior management's travel expenses, in particular of business class travel and lodging.

Beijing-based China Agritech is engaged in the development, manufacturing and distribution of liquid and granular organic compound fertilizers and related products in China.

The company sells its products to farmers located in 26 provinces of China.

The salaries of executives in China's State-owned enterprises (SOEs) could soon be limited.

A drafted regulation reportedly caps the salary of senior executives at no more than 10-12 times the average of regular SOE staff salaries. The plan also limits the growth of executive pay to no faster than the expansion rate of corporate profits.

According to the National Bureau of Statistics, in the first three quarters of 2008, the average income of SOE employees was 20,576 yuan.

"The salaries of executives in SOEs should be controlled because they are appointed by the government, not chosen by their market value and SOEs enjoy more favorable policies and resources than their private counterparts," said Liu Junsheng, a researcher with the Ministry of Human Resources and Social Security.

The financial sector will be the first regulated, with a reported ceiling of 2.8 million yuan on executives' annual pretax salary.

Executive pays came under the spotlight after Guotai Jun'an Securities Co, one of China's leading State-sector brokerages, revealed a package of 3.2 billion yuan for executive "compensation and welfare" in 2008.

If the 3-billion-yuan total compensation was equally shared by the company's 3,200 employees, each would receive about 1 million yuan, or 88 times an average urban worker's annual income.

The financial services industry suffered major losses so the financial companies' hefty payout deals drew widespread public ire.

An online survey conducted by ifeng.com showed that over 96 percent of netizens said the performance of the executives in SOEs did not match their high salaries.

The salaries of many high-level executives in SOEs are also not transparent to the public. Human resources consulting firm Mercer conducted studies on executives compensation for China's CSI 300 Index companies traded in Shanghai and Shenzhen stock exchanges since 2005, using publicly disclosed information and found the disclosed compensation information for executives is limited compared to those listed in countries such as the US.

"People have a right to know about executive salaries, including the specific amount, their performance evaluation method and performance results. But this kind of information is not available for companies on the Chinese mainland," said Zheng Wei, managing director for Asia executive remuneration business with Mercer.

According to the Mercer report, in 2007, most bank presidents' compensation was about 10-20 times that of an average staff salary. The report also said the salaries of senior executives in State banks have little connection to the banks' performance.

The highest pay package in financial industry in 2007 was as much as 66 million yuan for Ma Mingzhe, chairman of Ping An Insurance (Group) Co, which garnered criticism on Internet forums.

A draft of a general regulation to cap salaries of high-level executives in SOEs will be submitted to the State Council for approval soon, said Liu.

A report by the human resources consulting firm Mercer shows that 23 percent of companies surveyed in China said their senior executives' compensation in 2009 wouldn't increase as usual, showing the effects of the global financial slowdown.

The survey involved 59 companies in China, 76 percent of which were listed companies and 39 percent of which were multinationals. Mercer conducted similar surveys in other Asian countries, including India, South Korea, Japan and Singapore.

"In Asia, one third of companies surveyed said their senior executives' salaries wouldn't increase in 2009. The proportion in China is a little smaller than the average, reflecting China experiencing less impact of the financial crisis than other Asian countries," said Zheng Wei, managing director for Asia executive remuneration business with Mercer.

"Considering the deferred impact on China's market, we predicted that more companies in China will take similar measures to limit the senior executives' salaries in 2009," Zheng added.

A draft of a general regulation to cap salaries of high-level executives in State-owned enterprises (SOEs) will be submitted to the State Council for approval soon, an expert said yesterday.

The new regulation, drafted by the Ministry of Human resources and Social Security, also clarifies the system to assess performance and rules for expenditure, Liu Junsheng, a researcher with the ministry, who has participated in the discussion of the draft over the past six months, said.

"The new regulation provides a guideline and legal basis for supervising the salary structure of high-level management of all SOEs," he said.

The Ministry of Finance earlier this month solicited views on measures to regulate salary management in State-owned financial enterprises, which reportedly plans to set a ceiling of 2.8 million yuan ($411,765) on the annual pretax salary.

"Recent media reports on the fat salary packages of SOE executives have drawn the attention of the central government," Liu said. "So they have asked related departments to put a limit on the amount."

The new regulation limits the salary ratio between high-level and low-level executives to 10 to 12, the National Business Daily quoted sources as having said yesterday.

However, Liu said a final decision was yet to be taken. "The current average ratio is 10 to 14."

According to the National Bureau of Statistics, in the first three quarters of 2008, the average income of SOE employees was 20,576 yuan ($3,026).

The 2006 statistics from the State-owed Assets Supervision and Administration Commission show that the average salary of principals with 149 large SOEs was 531,000 yuan ($78,088).

Liu said the salaries of SOE executives should be controlled "because they are appointed by the government, and not chosen by their market value, and SOEs enjoy more favorable policies and resources than their private counterparts".

Dong Xian'an, a senior macro-economic analyst with the State-owned Southwest Securities, said the increasing income gap between high-level executives and common employees has affected the social stability, especially amid the global financial crisis.

"This regulation draft has come a little late. The gap has already grown too huge in recent years," he told China Daily.

"The salaries of high-level executives in SOEs should be made transparent to the public," he said.

However, industry experts said that a ceiling on salaries might affect the ambitions of some enterprising SOE executives.

"The government should pay attention to the incentive system in order to encourage SOEs to play a bigger role in the Chinese economy," Ma Guangyuan, a business commentator, was quoted as saying in the Information Times.

Earlier this month, the State-controlled Guotai Jun'an Securities was reported to have a 320-million-yuan salary ($47.06 million) plan in 2008, an average of 1 million yuan ($147,059) for each member of the staff.

A total of 231 local firms said they will not cut salaries this year, a survey has found.

Of the 308 companies polled by consultancy firm Mercer, 20 percent make consumer goods, 19 percent are hi-tech firms, 17 percent are in machinery and electronics, and the rest span a variety of other industries.

Sixty percent, including Lenovo, P&G, Unilever, Dupont and Wanke Real Estate, are based in major cities.

Just about six firms said they will resort to salary cuts as a means of combating the financial crisis, while 154 said they will offer lower pay rises.

The rest said they have not made a final decision yet.

Liu Jianli, director of salaries and welfare at Lenovo, said: "We don't have any plans to cut salaries, but there will be limits on pay rises and we will be more cautious in recruiting new people."

Xu Jun, public affairs manager at Dupont Inc in Shanghai, said it too has no plans to cut salaries.

In another survey, by Kingfield Management, 75 percent of the 216 Pearl River Delta firms polled said they will not lay off staff this year.

Forty percent said they will increase wages but by a lower percentage than last year.

With its high number of export-oriented firms, the Pearl River Delta has felt the full brunt of the financial crisis.

Last year, the central government implemented policies that allow companies to defer contributions to pension funds and make lower employee insurance payments.

Latest 2008 figures from 50 stock brokerage firms showed an average 68.91 percent fall in profit from 2007 and a 11.99 percent cut in annual executive pay.

Industry analysts said the pay cut in 2008 would have been much deeper if it had not been for the deferred payment of the 2007 bonus.

Of the 50 brokerage firms, five said their average executive compensation was above one billion yuan ($146 million), with Guotai Jun'an Securities Co topping the list with 3.07-billion-yuan total staff payout, up 96.8 percent from a year before. The other four were Guangfa Securities, China Merchants Securities, CITIC China Securities and Guoxin Securities.

The total staff payout of the five brokerage firms totaled 9.11 billion yuan, exceeding the combined 7.4 billion yuan of the other 45 companies.

SHENZHEN, China -- The global economic downturn is testing China's efforts to improve labor laws, pitting the need to give basic legal protections to 700 million workers against the need to keep businesses afloat.

The country's economic emergence boosted incomes, but also led to complaints that workers' rights were being trampled. In response, the central government in January 2008 introduced workplace-protection legislation, known as the Labor Contract Law. The law sought to tighten job security, to make dismissing workers more difficult, and to guarantee severance pay of one month's salary for each year of employment. Last year, China added new job-discrimination laws and made it easier to file complaints against employers.

But as the global financial crisis hits the heart of the world's factory floor, labor activists say officials are turning a blind eye to the new requirements. Local governments deny they are becoming lax, yet complaints against employers languish in huge backlogs as many are simply shuttering their factories.

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Migrant workers who returned home from China's Guangdong Province after losing their jobs look for work at a labor market in Chengdu. One worker advertises that he will take any job.
"The enforcement of the Labor Contract Law is facing new problems," Hua Jianmin, chairman of the National People's Congress Standing Committee, China's top legislative body, said last month at a meeting on the law.

One problem is that China's manufacturing sector contracted for the fifth consecutive month in December, according to the CLSA China Purchasing Managers Index.

"Pressures from the labor law may encourage factories to close rather than pay what they owe to workers under the law," says Liu Kaiming, executive direct at the Institute of Contemporary Observation, a Shenzhen-based labor group.

Even before the downturn hit, business groups protested that the new law would be costly and burdensome. Now, workers say companies avoid paying claims by liquidating or by just disappearing without properly settling their business.

In the first 10 months of 2008, say authorities, 15,661 enterprises in Guangdong, the manufacturing-heavy southern province, shut their doors. Over half of those -- about 8,500 -- ceased doing business in October.

To aid businesses, Beijing has permitted local authorities to freeze minimum-wage levels and to reduce or suspend employers' social-insurance contributions.

The vice mayor of Dongguan, in Guangdong, says many employers hope the central government will suspend the Labor Contract Law, and his office has sent that request to Beijing. "We can't ourselves halt the implementation of a national law," says Jiang Ling.

Giving business such leeway could ultimately undermine trust in the still-developing rule of law, says Andreas Lauffs, a partner at the law firm of Baker & McKenzie who focuses on Chinese labor issues.

The situation keeps workers in limbo at a time when the plight of those unemployed by mass layoffs or illegal factory closings has drawn wide attention. The Chinese media have reported numerous recent incidents of labor unrest, from taxi strikes to protests by factory workers over unpaid wages.

After their factory closed last month, workers from the Shatangbu Yifa Rubber & Hardware Factory in Shenzhen filed for the back pay and severance promised under a contract required by the new law.

The Hong Kong-based owner disappeared, according to Shenzhen officials. That left many migrant workers stranded without enough money to return to their hometowns hundreds of miles away. About a third of the factory's 300 workers went to the Shenzhen government to request a speedy resolution of their case.

"We are aware of our rights, but we don't have enough time to go to court. We just want to get paid and go home before the holiday," said one worker, referring to the Lunar New Year celebration this month.

The former owner couldn't be located to comment.

Local officials later gave the employees 500 yuan ($73) in back pay from a special fund, but said other claims would have to go through a bankruptcy court.

The state media's heavy promotion of the new law has resulted in a big jump in labor disputes. In the city of Guangzhou, the local arbitration office received more than 60,000 cases from January through November, about as many as it handled over the previous two years combined. The fast-rising caseload has overwhelmed the system.

"Before, we would try to mediate more disputes before going to arbitration, but now that workers have the right to go to arbitration, they choose to do that right away," said Huang Huiping, deputy director of the labor bureau in Dongguan. "Right now, the number of labor arbitrators is not sufficient."

On Jan. 1, central labor authorities introduced new rules to allow arbitrators to give priority to claims filed by more than 10 workers.

The Shanghai municipal government should set aside certain employment vacancies for migrant job seekers after the Spring Festival holiday, three migrant worker deputies to the city's people's congress suggested.

With the worldwide financial crisis showing no signs of slowing down, migrant workers returning home are worried about losing their jobs after coming back from the holiday, according to Zhang Xiongwei, Hong Gang and Pan Aifang, the three people elected to represent the city's five million migrant workers before the local legislative body.

"The government should do something to make them go home happily and come back with a hope (to find a job). Migrant workers make a huge contribution to Shanghai's fast development," Zhang said.

The deputies said some vacancies at construction projects of infrastructure facilities and at services in which the government pays to take care of the old, poor and sick should be set aside for them.

The government should include unemployed migrant workers in the city's reemployment services system, in which the government trains and helps the unemployed find jobs, they added.

"I also suggest the government take measures to ensure a stable job market and prevent companies from taking advantage of the crisis to lay off employees," Zhang said.

In the annual sessions of Shanghai Municipal People's Congress last month, Mayor Han Zheng said migrant workers, white-collar workers and university graduates face the most difficulty in securing employment, and more efforts should be made.

He said the government would subsidize companies to maintain full employment, help train the unemployed and provide better services and more loans for people to start their own businesses.

The three deputies said they have not seen a large amount of migrant workers being laid off in Shanghai. "But the worst time has not come yet," Zhang said.

Many companies in the country are resorting to executive pay cuts to deal with the global economic slowdown, executives and human resources managers have said.

The moves are reportedly being made in industries such as aviation, steel, power generation, petrochemical, finance, information technology, securities and real estate.

Similarly, Chinese companies including State-owned enterprises (SOEs) are planning to scale back their reward schemes for staff this year as they find ways to cut costs, industry observers have said.

Sany Heavy Industry Co, one of the country's largest heavy machinery manufacturers, made headlines recently when its chairman Liang Wengen offered to cut his salary this year to 1 yuan, while the company cut other board members' salaries by 90 percent.
Leading aluminum producer Chalco reportedly plans to cut executive pay by as much as 50 percent, after profits plunged last year on declining metal prices.

China Eastern Airlines' management teams are also expected to have their wages slashed by up to 30 percent, local media reported.

Human resources experts told China Daily such moves showing executives' efforts to share some pain with rank-and-file employees can shore up goodwill among employees, when broader pay cuts and workforce reductions are announced.

"But such moves will not necessarily drag these companies back to the black. It is just one of the many strategies they have to take," said Luo Zhongwei, a senior researcher with the Chinese Academy of Social Sciences.

Luo said the deteriorating economic situation could also force some companies to reflect upon their operations.

"Fast growth can cover up a lot of problems. Some of our employees were spending lavishly. These problems are exposed when the outside environment worsens. We must execute cost-saving initiatives now," said Duan Dawei, Sany's vice-president and finance director.

The All-China Federation of Trade Unions said yesterday it will help ensure migrant workers receive their salaries on time, as Spring Festival - traditionally, the peak season for delayed payments - is fast approaching.

Federation chairman Wang Zhaoguo said unemployment among migrant workers has become one of the biggest problems caused by the global recession.

"Because migrant workers still receive their salaries late sometimes, we should work harder to tackle this problem," he said.

The federation's vice-chairman Sun Chunlan said the global recession might drive more migrant workers to return home next year, so the federation should do more to protect their interests and help them become reemployed.

The federation has 210 million members, 65 million of whom are migrant workers. China is home to 230 million migrant workers, federation figures showed.

In October, five rural migrant workers hurled bricks onto the streets from atop a 32-story building in Zhengzhou, Henan province, in hopes of arousing public attention to help them win wage arrears. They were charged with disrupting social order and were brought before a local court on Dec 2. The court has yet to issue a ruling, Dahe Daily's website reported.

"We should bring more migrant workers into trade unions, ensure they receive their pay every month and offer guidance to help them start businesses or become reemployed," Sun said.

Tong Zhihui, a professor at the school of agricultural economics and rural development at Renmin University of China, said a high percentage of migrant workers have joined trade unions. The tricky part is helping unions reach their potential, Tong said.

"Most migrant workers tend to find lawyers or directly appeal to the law when employers violate their rights. It would save time and money if trade unions could fulfill this role," he said.

Sun said more trade unions should be founded in towns and villages, so migrant workers could also find support after returning home.

Xie Guiji, a migrant worker who recently returned to his hometown in Sichuan province, said he had not yet joined a union.

"I am just doing odd jobs now. I get my pay every day after work but still do not know where to go if someone refuses to pay me on time," Xie said.

"Before, I did not know we had trade unions in our county. Now that I know they can protect me, I will apply to one after the New Year."

Human Resources and Social Security Minister Yin Weimin said in Beijing on Monday that China aims to create 9 million new jobs in urban districts next year.

Yin said China wants to keep the registered urban unemployment rate under 4.6 percent next year.

"The economic slowdown due to the financial crisis will add difficulties for Chinese seeking employment. The job situation in China is grim, so effective measures must be taken to help new graduates, migrant workers or other groups, he said.

The urban unemployment rate in the past five years was below 4.3 percent, but this year's target was set at 4.5 percent because of the severe employment situation.

The government was trying to reduce the burdens of employers by such methods as deferring payment of social security funds.

Unemployed migrant workers who return home are being encouraged to start businesses. They will get credit extensions, tax breaks, business registration and information consulting service, according to the country's central rural work conference, which concluded on Sunday.

Ministry of Agriculture figures from 10 provinces and municipalities show that about 7.8 million migrant laborers had returned home earlier than in previous years for the Spring Festival.

The National People's Congress (NPC) should introduce a new legislation that makes it a crime for business owners to flee without paying workers, a senior Guangdong official said on Tuesday.

Liu Youjun, deputy director of the provincial labor and social security department, said his proposal will be officially submitted to the NPC at next year's session.

In Dongguan, a major manufacturing base in Guangdong, 117 firms closed down in September and October.

In each case, the owners fled, leaving more than 20,000 people without wages, the Hong Kong-based Takungpao reported yesterday.

Local governments and taxpayers were left to pick up the bill, it said.

There is currently no criminal law covering this sort of behavior, Liu said.

Labor and social security departments can issue administrative punishments to business owners, such as preventing them from investing in the future, but they are not enough to stop unscrupulous operators from re-offending, he said.

The only effective solution is to introduce a law that makes it a crime for company bosses to flee their failing businesses, he said.

Meanwhile, Liu Bingquan, director of Guangdong's small and medium enterprise bureau, told NPC deputies on a visit to Guangzhou yesterday that in the first 10 months of the year, 15,661 local SMEs either closed down, suspended their operations or moved away.

In some parts of Guangzhou, local government teams have even been set up to monitor suspect firms to ensure their owners do not flee, he said.

However, not all company chiefs are on the verge of fleeing.

Harley Seyedin, president of the American Chamber of Commerce (AmCham) in South China, told China Daily: "Multinational firms don't behave like that.

"They want to expand their businesses in China, and many will be hiring more people next year."

A recent study conducted by AmCham found that most of its 1,300 member companies in South China had decided to shift the focus of their business from America and Europe to China.

"The Chinese market is getting stronger compared with the Western market," Seyedin said.

"So firms are hiring more people, rather than laying them off."

Optimizing your workforce's salary structure
By CHRIS DEVONSHIRE-ELLIS

In an increasingly competitive market for skilled labor, foreign-invested companies are restructuring their salary packages as a means of hiring and retaining quality staff. We outline the fundamental components of salary in China and introduce some of the structures being used by companies to increase retention and motivation levels in their staff. We also introduce the relatively new concept of outsourcing of payroll management services in China-a business that is becoming more popular as the operations of foreign-invested enterprises in China become more diversified and complex.

Compensating your employees

Presumably because of its simplicity, a large number of employers still compensate their staff using the most straightforward salary package available to full-time workers in China-a fixed monthly salary with no extra incentives or tax-optimization strategy. Each month, mandatory social security contributions are deducted from each Chinese employee's gross salary and individual income tax (IIT) levied on the balance. These contributions do not apply to foreigners. The employer is then required to make social security contributions on behalf of employees as well. Usually mandatory employer contributions total about 40-50 percent of an employee's base salary. There are a lot of factors contributing to the exact proportion; these are examined in the accompanying article Social Security in China.

Annual bonuses

Many foreign-invested companies in China pay annual bonuses to staff. Sometimes these will be a pre-determined, fixed amount known as the 13th or 14th month salary. Other times they will take the form of individual or corporate performance bonuses. These kinds of bonus perform two main roles:

1. They provide staff with extra income. Bonuses are often paid before the Chinese Spring Festival, when local staff will traditionally spend more money than in an average month.

2. The Chinese tax system offers a special treatment for payment of annual bonuses. Once a year, a lump-sum payment to staff can be divided by 12 to derive the taxable percentage for payment of IIT. For employees, this can work out to be more tax-efficient than receiving a flat salary throughout the year. Here is an example:

An employee based in Dalian receives a monthly salary of 10,000 yuan, giving them an annual salary of 120,000 yuan. After deduction of mandatory social security, assuming it is an amount of 1,687 yuan, their monthly income is 8,313 yuan. A further deduction of 2,000 yuan gives a total on which to base their taxable income each month. According to IIT calculation rules, their monthly tax burden will be 888 yuan. Therefore, in the absence of any kind of bonus, their annual tax burden will be 10,656 yuan.

But if that employee receives a flat monthly salary of 9,000 yuan with an annual bonus of 12,000 yuan while still totaling an annual salary of 120,000 yuan, every month their taxable income will be calculated by subtracting the social security contribution of 1,687 yuan and the deduction of 2,000 yuan. Therefore their monthly tax burden will only be 688 yuan. This annualizes to 8,256 yuan. They will also have another IIT payment to make on their annual bonus. This will be calculated by dividing 12,000 yuan by 12, which equals 1,000 yuan. The percentage of tax payable on this annual bonus is set by referring to the monthly taxable bracket for employees earning 1,000 yuan, or 10 percent. After taking deductions into account, their tax burden is 1,175 yuan, and the total IIT contribution for the year will therefore be 9,431 yuan.

As you can see, by paying an annual bonus on top of a lower flat monthly salary the tax burden for the employee is reduced. In the example above, the amount of the reduction is 1,225 yuan, or 11.5 percent of the original tax burden. The company should balance this tax advantage with the downside-employees may leave the company immediately after receiving a large bonus. It is no coincidence that March is the peak time for job-hopping in China, and a large exodus around this time can cause operational problems in the following months.

Employers should note that this one-time annual bonus could be made up of several components: fixed bonus, individual bonus and corporate performance bonus. The critical factor is that the amount is reported to the tax bureau in one lump sum, and therefore it should be paid in the same month to receive this special treatment. Some companies combine a modest fixed bonus with an additional performance bonus. The individual bonus can be set high for employees that the company would like to retain and make lower for poor performers.

It is important to bear in mind that details of bonuses paid to employees should be kept confidential. This is one key reason why outsourcing of payroll is becoming increasingly popular. Using this method, it is possible to restrict details relating to salaries and bonuses for senior employees to only the human resources (HR) manager. Some organizations even prefer to base their HR manager abroad, liaising with a professional third party provider to ensure maximum control and confidentiality over the process.

Rising unemployment and a widening income gap are the two issues of most concern to Chinese people, an annual report released on Monday by the Chinese Academy of Social Science (CASS) said.

Graduates from the Shandong Institute of Light Industry learn flower arranging at a florist's in Jinan, Shandong province on Monday. The bleak employment situation has forced many graduates to consider setting up their own businesses. [Xinhua]

The document, entitled The Analysis of and Forecasts for Social Development (or the Blue Book on Chinese Society), said 38.4 percent of the 7,000 families interviewed had been affected by the unstable employment situation.

The figure is 8.4 percentage points higher than in 2006.

In urban areas, the unemployment rate is now 9.4 percent, twice the registered rate of 4.5 percent released by the Human Resources and Society Security Ministry, the report said.

Central and western parts of the country, which have less-developed economies, are facing a more severe unemployment situation than wealthy coastal areas, while big cities have a higher unemployment rate than small towns, it said.

Natural disasters and rising operational costs due to the global economic slowdown have caused thousands of small and medium-sized labor-intensive firms to close down this year, leaving millions of migrant workers jobless, the report said.

"The global financial crisis has had a profound effect on the Chinese economy and society," Li Peilin, director of the CASS Institute of Sociology, said at a ceremony to release the report.

"The effects may go beyond our expectations and we have no clear idea how they will change society," he said.

The report also said that the number of people graduating from college rose to a new high of 5.6 million this year. But as of August, just 70 percent of them had found work, it said.

By the end of the year, more than 1.5 million fresh graduates will be without a job, while 6.1 million others will enter the jobs market next year, it said.

"The unemployment rate for new graduates is over 12 percent, three times the urban registered unemployment rate," Chen Guangjin, a professor with the Institute of Sociology, said.

"We should pay more attention to the problem," he said.

Sociologists have also warned that the widening income gap between rich and poor will restrict the consumption power of middle and low-income families, especially during the economic recession.

The average income of 20 percent of the richest families is 17 times higher than that of 20 percent of the poorest ones, the report said.

The rich also own far more durable home appliances, such as refrigerators, mobile phones and computers, it said.

Just 4 percent of poor families have a computer, compared with 66 of rich families, it said.

"It is very important to improve the income situation in China in order to boost domestic demand," Li Wei, a CASS researcher and one of the writers of the report, said.

The government is going ahead with a nationwide reform of civil servants' pay that includes raising the salaries of officials in poorer regions, despite the ongoing financial crisis, a publicity official from the Ministry of Human Resources and Social Security said yesterday.

"At present, we do not have any plans to amend or postpone the scheduled reform," the official, who did not want to be named, told China Daily.

The salary reform is aimed at regulating the allowances and subsidies of the country's 8 million civil servants, by reducing such payments in affluent areas and boosting them in poorer regions. The changes rolled out in July 2006 and are expected to be completed next year.

Civil servants in the Inner Mongolia autonomous region and in Henan, Hebei and Anhui provinces already saw their allowances raised from last month, the Sichuan-based West China Metropolis Daily reported yesterday.

Henan provincial authorities received the green light from the State Council to raise the monthly salaries of their officials by 300 yuan ($44) each in mid-November, the newspaper reported.

The move was part of the national reform to regulate civil servants' pay and had nothing to do with the current financial crisis affecting economies worldwide, a Henan official said.

"We made the adjustment because our civil servants have complained about their low income for a long time," said the official, who wanted to be known by his surname Wu, with the finance department of the Henan provincial government.

"The changes have nothing to do with the financial crisis. We submitted the requisite applications last year," Wu said.

Still, other researchers said it was not the right time to continue with the salary reform.

"The timing is not good, as the global economy is in a recession and China is facing mounting economic pressure," Su Hainan, head of the Institute for Labor and Wage Studies, was quoted by The Economic Observer as saying on Sunday.

The government should step up efforts to fight corruption and lessen tax for companies instead of increasing civil servants' pay, Cao Jianhai, a researcher from the Institute of Industrial Economics at the Chinese Academy of Social Sciences, said yesterday.

"Increasing investment on rural education as well as rural infrastructure and agriculture are also among the government's imminent tasks," Cao said.

More than 24 million yuan ($3.5 million) of public funds has been used to compensate 7,000 former employees of collapsed toy maker Smart Union Group, a senior local official said yesterday.

In an interview with the Xinhua News Agency, Xu Hongfei, deputy head of Zhangmutou in Guangdong province, where the Hong Kong listed firm operated two factories, said the town government had agreed to reimburse all those who lost their jobs on October 15.

"The boss is nowhere to be found, so the government is paying the wages owed to the workers," he said.

Former employee He Ming said yesterday he had been given 1,800 yuan for the 13 days he had worked this month.

"My monthly pay was about 3,000 yuan, so the money I got from the government was about right. I'm satisfied," he said.

While the government has agreed to cover back pay, it will not, however, finance any redundancy payments owed by the firm, Xu said.

About 1,000 former employees have hired lawyers to help them seek compensation from Smart Union, Xinhua said.

The Zhangmutou government will do all it can to help find new jobs for those who were made redundant, Xu said.

Meanwhile, in neighboring Shenzhen on Tuesday, the city government used 3.7 million yuan of pubic funds to cover back pay owed to some 800 workers left jobless with the demise of Chuangyi Toys Co Ltd, the boss of which has been missing since Oct 14.

A source with the Pingshan community office, where the Hong Kong funded firm was based, told Xinhua that local labor authorities had secured the company's assets and will auction them off at a later date.

In another development, the government of the Longguan district of Shenzhen is currently deciding what action to take following the closure on Monday of the Hong Kong funded Gangsheng Electronic (Shenzhen) Co Ltd.

"A working group comprising representatives of the police, courts, and the labor and social security bureau, has been set up to investigate the case," Peng Gang, an official with the district publicity department, told China Daily yesterday.

Also, on Tuesday, the Shenzhen labor and social security bureau publicized the names of 30 companies that owe in excess of 12 million yuan in back pay to their workers, and demanded their executives report to local labor authorities within 30 days.

Yang Baohua, deputy director of the Shenzhen labor bureau said that since June, the city government has paid out more than 10 million yuan to cover wages owed to laid off workers.

BEIJING, Oct. 23 (Xinhua) -- China on Thursday discussed drafting an amendment to the state compensation law, which would guarantee smoother channels and improved procedures for victims seeking compensation from state organs.

State organs under compensatory obligations should decide whether to compensate or not within two months after receiving appeals, according to the amendment, which was being scrutinized by the Fifth Session of the Standing Committee of the 11th National People's Congress.

Those who claimed compensation from state organs but were not satisfied with the result, could complain to the state organs' superior departments, the amendment said.

If they were still not satisfied or didn't receive prompt replies, they could appeal to the courts at the same level, according to the draft.

Problems including insufficient law enforcement against state organs under compensatory obligations, delays in making decisions and delivering compensation and a shortage of financing support had made it difficult for victims to protect their rights and interests, said Li Shishi, head of the Legislative Affairs Commission of the NPC Standing Committee.

"The amendment tackles those problems and will provide a quicker and easier way for them to seek compensation."

Apart from those changes, the draft amendment would also increase an article about both victims and state organs' obligations in providing evidence for their claims. It also, for the first time, added compensation for psychic injury.

To help victims get paid promptly, the amendment said state organs had to deliver compensation applications to the relevant financial departments within seven days of receiving a compensation invoices from the victims. The relevant financial departments should in turn pay the victims within 15 days.

The state compensation law was approved by the National People's Congress in May 1994 and was put into effect starting in 1995.

It plays an important role in solving conflict between citizens and state organs, and to sustain social stabilities, Li said.

Hewitt’s latest survey shows some employers will be giving salary increases of about one percent smaller than they would have, had the economy been looking a little better.

Hewitt’s survey of 411 large companies revealed that 42 percent of companies “are revising their salary budgets and variable pay spending strategies related to the economic downturn or because of increasing cost pressures.” Of that 42%:

49 percent plan to reduce variable compensation payouts
66 percent will cut bonuses by more than 10 percent in 2008
Salary increases will be about 3.1 percent in 2009, or about 1 percent smaller than they would have been.
Thirty-eight percent of companies are reserving part of their salary-increase budget for their highest performers. And 23 percent are creating supplemental, discretionary incentive pools for high-performers. Another 20 percent are offering employees retention bonuses for them to stay a certain amount of time.

GUANGZHOU: Authorities in Guangdong will consider setting up an emergency fund to protect workers against losing their wages in the event of further factory closures, the provincial labor and social security department said on Monday.

Responding to a resolution put forward by a member of the provincial political consultative conference, the department said in a statement that the feasibility of such a fund will be considered and that financial departments at various levels will likely contribute to it.
The fund will primarily be used as insurance against firms going bust or unscrupulous bosses absconding, the statement said.

Zhang Xiang, director of the labor department, said in the statement: "From time to time, the boss of a company in financial trouble will flee and leave his debts behind, and that creates turmoil.

"In the current economic climate, there is a good chance that more companies, especially labor-intensive ones, will collapse.

"This fund would help protect against some of the financial and social problems caused by such closures."

Zhang said that traditionally, companies paid a premium, on top of their rent, to the owners of the factory buildings they occupied.

In the event of a firm suffering financial difficulties, or the boss absconding, this money could then be used to cover wage payments for the workers.

"But the funds were seldom big enough to cover the total wage bill," he said.

The labor department has also been urging firms to start paying their workers via bank transfer to enable closer monitoring, he said.

Furthermore, the department is currently seeking to work more closely with other local bodies, including the people's bank, industrial and commercial administration, and the foreign trade and economic cooperation department, to develop a better picture of companies' credit ratings.

Not everyone, however, believes the insurance fund is a good idea.

Li Qingqing, an associate professor of economics at South China Normal University, told China Daily yesterday: "Taxpayers' money should not be used to support failing businesses.

"An infinite amount could be lost if firms continue to go out of business.

"Instead, companies should be made more responsible, perhaps by paying some form of premium when they apply for registration."

Thanks to last year's bullish market, the financial sector provided the most lucrative jobs in China and fund management talents topped the 2007 salary rankings, The Economic Observer reported on Monday.

Executives, fund managers and high-caliber investment researchers were the top earners, according to Taihe Consulting, a human resources company, after conducting a survey on 15 large fund management companies in Shanghai, Beijing and Shenzhen.

Industry insiders have attributed the high earnings to a shortage of fund management talents and the thriving fund businesses in 2007.

Even the current bearish market has not shown an adverse effect on fund employees' incomes yet.

Statistics collected by Taihe in June indicated no signs of fixed income reductions among fund management employees. And flexible income was closely related to companies' performances, it found. Some companies can still collect remarkable management fees in 2008 that are no less than last year's, Taihe said.

The cash income of an employee comprises a fixed part and a flexible part in addition to their benefit package. The fixed part is made up of basic salary and allowances, and the flexible, accounting for 30 to 40 percent of the total income, is given as a merit-based bonus, such as year-end bonuses, or as sales commissions. Some positions even offer a flexible income that takes up as much as 50 percent of the total.

An employee with a Shenzhen-based fund management said: "The fixed salary was set at the beginning of the year, so there would be no big change. The flexible part may vary from person to person…some fund managers won't necessarily get a smaller year-end bonus, because the payment is based on the rankings of fund performances."

By contrast, listed securities companies already registered a year-on-year drop of 8.6 percent in salary payments in the first half of 2008, with some employees' incomes reduced by more than 60 percent, according to a report by Shanghai Securities News in August.

From a regional perspective, fund management companies in Shanghai, a national financial hub, offered the most lucrative jobs in 2007, Taihe's survey showed. Beijing came second and Shenzhen third.

The consulting company found that the lower-end salaries of fund management, real estate and high-tech sectors were quite similar. But at the very top level, the financial sector offered salaries that doubled what the high-tech gave, with real estate coming somewhere in between.

"Financial employees earned much higher salaries than people in the other industries in 2007," a Taihe analyst said. "And undoubtedly the most lucrative jobs came from the fund sector."

Civil service jobs have gradually become popular again with growing numbers of graduates nominating them as their "ideal jobs".

Amid the current global financial crisis' implications for the private sector, the website for national civil service exams crashed on its first live day on Monday, the Beijing Morning Post reported Tuesday.

A recent China Youth Daily survey on Netease.com shows around 86 percent of the 2,440 respondents considered taking the exam in a bid to join the public sector.

"The reason is simple," a Ministry of Human Resources and Social Security official, who refused to be named, said. "In China, civil servant jobs means good payment, decent social status and permanent social welfare. There is low risk of being fired."

People walk past the gate of the State Administration of Civil Service in Beijing in this August 30 file photo. [CFP]

China will recruit 13,566 civil servants this year, according to the newly released civil service enrollment brochure.

Among the 134 government agencies taking part in the recruitment campaign, the Ministry of Foreign Affairs alone plans to recruit 157 new staff.

For Dong Shu, a graduate of Peking University, a civil service job is at the top of her wish list.

"As a girl, I just want stability. The civil service sector can provide a comfortable and wealthy life. What's more, most of my classmates are going to take the exam," Dong said.

Things are more complicated for Wu Minggang, who will graduate from Beijing University of Posts and Telecommunications in March next year.

"Being a civil servant means a bright future. If you work for a foreign enterprise, you will still be an engineer in 20 years, but if I get a job as a civil servant, (the career development path will be different,)" Wu said.

For Wu's classmate Wang Zhongxu, sitting the exam is just about increasing her chances of getting a job.

"I just want to grab any chance in front of me," Wang said.

Li Pei, a post-graduate of the University of International Relations who became a civil servant last year, feels satisfied with her job.

"We enjoy a dormitory at a low price, about 200 yuan ($ 29) per month. We enjoy three meals for free in the dinning hall. Every month I can give at least 1,000 yuan to my parents," Li said.
Compared with Li's classmates in foreign enterprises, Li's life was rather comfortable.

With a monthly salary of about 5,000 yuan, she also enjoys good insurance and pension coverage.

Hu Fengling, a professor at the University of International Relations, said at least 70 percent of the graduates in his school will take the national civil service exam, but only one in five will get a job.

Salaries in India are expected to increase by 16 per cent in 2009, one of the highest in the Asia-Pacific region driven by strong economic growth and pressure on employers due to soaring inflation, a latest report says.

As per a report by the Hong Kong-based compensation firm HR Business Solutions pay increases in the Asia-Pacific region are likely grow even as the economies are expected to be impacted by the global slowdown.

"The forecast pay increase in India averaging 16 per cent is one of the highest among all the countries," the report stated.

The HRBS 2009 pay increase forecast is based primarily on four economic factors -- GDP growth, inflation, unemployment, manpower demand and past pay increase trends.

Elaborating further it said that the Indian economy is reported to be cooling, but still it is expected to achieve a growth rate of 7-8 per cent in 2008, which is among the strongest in the region after China.

"In addition, it has the fourth highest inflation rate of over 12 per cent in 2008 which increases pay rise pressures on employers. Labour demand is still robust and there is a lack of sufficient supply of the skills-set required by India's rapidly growing services, manufacturing, construction and retail industries to boot," the HRBS report added.

Economic growth rates in Asia are mostly forecast to be moderately lower in 2008 relative to 2007, while inflation rate across the Asia-Pacific region has soared to an all-time high.

"In many of the Asian countries, demand for manpower continues and in some cases, while general unemployment rate remains high, the labour market is extremely tight for qualified employees, for example, India, China and Vietnam," it stated.

Besides, in some developed economies such as Hong Kong, Singapore and Australia, while the unemployment rate is low, the demand for people has been strong.

Meanwhile, Sri Lanka is the other country which is forecast to see a higher double-digit rise in salaries of about 17 per cent in 2009.

The country's inflation rate of more than 16 per cent is the next highest in Asia after Vietnam and firms in Sri Lanka are hiring and facing challenges in recruiting and retaining skilled human capital.

Most of the neighbouring countries of India - Pakistan, China and Bangladesh are forecast to post around 11 per cent of expected pay increase.

In 2008, the salary increase in India had averaged at 14.9 per cent.

Other Asia-Pacific countries like China, Vietnam and Indonesia are forecast to see a rise of 11 per cent, 12.4 per cent and 12.7 per cent, respectively in 2009.

Earlier, in a separate report on Asian compensations, global HR consultancy Mercer had forecast that India was likely to witness over 14 per cent increase in salaries annually for the next three years as the corporates were facing shortage of talent.

The Mercer report had also stated that India, Vietnam and Indonesia were the only three countries in the Asia-Pacific region which are likely to see a double-digit increase in salaries until 2011.

More citizens of China's eastern metropolis of Shanghai were not satisfied with their salaries and may postpone buying houses or cars, a survey shows.

The income index for the second quarter of this year set a record low of 114.8 points, 3.8 points lower than that of the first quarter and 7.5 points lower than the last quarter of 2007, according to the survey on consumption confidence conducted by Shanghai University of Finance and Economics (SUFE).

Among the 1,000 surveyed, 13.3 percent said their income shrank over the past year, 4.4 percent higher that that of the first quarter. People's employment expectation index dropped by 23.5 to stand at 84.7 points, and 35.9 percent of the surveyed were pessimistic about job opportunities in the second half of the year.

In addition, 62.6 percent Shanghai citizens thought it was not a good time to buy houses right now, and 55.7 percent would not consider buying one this year.

The survey also shows that about half of the surveyed were negative about buying cars either now or in the second half of the year.

However, official statistics showed that the annual per capita disposable income in Shanghai's urban areas last year increased by 14.3 percent as against that of 2006, and that in rural areas increased by 11 percent year on year.

The Chinese stock markets have fallen drastically since October last year, while the consumer price index has continued to rise, both hitting people's incomes, according to Xu Guoxiang, professor of economics with SUFE.