Category: "News of China"
New firm to tap forex reserves
February 2nd, 2007The government will set up a company to manage its hefty foreign exchange reserves, according to an influential newspaper.
China Securities Journal, which is owned by Xinhua News Agency, quoted unnamed "authoritative sources" as saying that the establishment of the State Foreign Exchange Investment Company would represent a major initiative to better utilize the country's huge foreign exchange assets and to address the issues brought up by their accumulation.
China has the world's largest foreign exchange reserves, which amounted to a whopping $1.07 trillion at the end of 2006, and are poised to swell further.
Premier Wen Jiabao said at the National Financial Work Conference last month that the country should "explore new means and extend channels" for the use of the money.
The assets are currently managed by the State Administration of Foreign Exchange (SAFE). A considerable part of the money is believed to have been used for the purchase of United States treasury bonds.
Economists have said that the reserves far exceed the amount needed for their main purpose international trade payments, paying back external debts and contingencies.
Lin Yifu, an economist at Peking University, said any excess should be allocated for better returns.
In late 2003, SAFE transferred $45 billion to Central Huijin Investment Co Ltd, which used the money to recapitalize State-owned Bank of China and China Construction Bank. The injection of the funds was a crucial step for the restructuring of two banks and their eventual listing.
Huijin has also invested in dozens of other State-owned banks and brokerages.
The China Securities Journal said the new investment company would raise funds by issuing renminbi bonds and use the money to purchase foreign exchange reserves from SAFE.
This will help reduce excessive money supply, which is created by the huge amounts of renminbi that the central bank has to put into the market when it buys foreign exchange from enterprises to maintain the stability of the currency.
Excessive money supply is partly responsible for the country's high fixed asset investment growth in the past few years. Fixed asset investment growth, which stood at 24 per cent last year, has in recent years been deemed a major threat to the health of the economy.
Residence system blocks city's open job market
January 31st, 2007THE city's approval system for granting permanent residence to non-locals who graduate from a Shanghai university is discriminatory and blocks the free flow of the job market, according to one university president.
He Qinhua, president of East China University of Politics and Law and a deputy to the Shanghai People's Congress, has proposed changing the system.
He suggested the city government grant a residence card to every migrant graduate who applies to work in the city and then issue permanent residence permits to the best of those graduates after a trial period.
To control the city's population expansion, non-native university graduates who wish to stay in the city are graded based on the university they attended, academic background, foreign language ability and computer skills, as part of a system that went into place in 2004.
Only those who meet the minimum level, which will be announced by the Shanghai Education Commission every spring, are eligible for a Shanghai residence permit.
About 11,000 migrant graduates obtain a residence permit every year, accounting for 25 percent of non-locals who graduate from city universities.
He said graduates from renowned universities aren't necessarily superior to others. Deliberate government intervention has violated the modern free job market, he said.
Shenzhen leads external trade
January 30th, 2007Shenzhen, an economic engine in south China's Guangdong Province, realized 237.4 billion U.S. dollars in foreign trade last year, a growth of 29.8 percent over the year-earlier level.
Local customs sources said Monday that this is the first time the city ranked first among major Chinese cities in terms of external trade.
The total trade volume included 136.1 billion U.S. dollars in export value, up 34 percent, and 101.3 billion U.S. dollars in import value, up 24.6 percent.
The exports, making up 14 percent of China's total, placed Shenzhen first among major cities for 14 consecutive years.
In 2006, Shenzhen sold abroad 69.62 billion U.S. dollars worth of new- and high-tech products, or 40 percent of the city's total, and bought from overseas 59.5 billion U.S. dollars worth of such products, or 50 percent of the total.
The exports of new- and high-tech products were 32.3 percent higher than the year-earlier level, while the imports, up 27.5 percent, the customs sources added.
China to set up three Confucius institutes in C., W. Asia
January 29th, 2007URUMQI -- China will set up three Confucius Institutes in central and west Asia this year to satisfy the growing demand for Mandarin, China's official language.
Preparations for the three institutes in Russia, Kazakhstan and Kyrgyzstan are well underway, said Wang Lili, director of the Foreign Affairs office of Education Department in northwest China's Xinjiang Uygur Autonomous Region.
The Education Department, which was authorized to set up Confucius institutes in neighbouring countries, will cooperate with the education authorities of the three countries to complete the project, Wang said.
"Starting March 1, we will begin recruiting volunteer teachers in Xinjiang and train them in Chinese language teaching methods," she said.
Wang attributed the surging demand for Mandarin learning in central and west Asia to the growing economic and trade exchanges between China and its neighbouring countries.
"Confucius institutes will not only meet the demand to learn Chinese but also help people better understand China," she added.
Confucius institutes are non-profit schools specializing in Chinese language education and cultural communication. They have become an important means of expanding Chinese teaching abroad and stepping up understanding between China and rest of the world.
The world's first Confucius Institute opened in Seoul in 2004.
The first group of 25 Confucius institutes around the world were officially acknowledged by the Chinese government in July 2005 and the number has now increased to 123 in 49 countries and regions.
According to plans of the Office of Chinese Language Council International (OCLCI), China will have 500 Confucius institutes by the end of 2010.
Confucius (551 BC-479 BC) is one of the most famous thinkers, educators and philosophers in Chinese and world history. He revolutionized education in China 2,500 years ago by making it accessible to commoners.
Lenovo sets its sights on buyers in US
January 29th, 2007CHINESE personal-computer giant Lenovo Group Ltd said it plans to enter the consumer market in the United States within the next two years.
"You'll see us getting into consumer business," William Amelio, Lenovo's chief executive officer, said in an interview with Bloomberg News. "We've demonstrated success in China and India, and there's no question we should have the same success in other developed markets."
Amelio, speaking on Saturday at the World Economic Forum in Davos, Switzerland, said acquisitions were "way down my priority list."
Lenovo became the world's third-biggest personal computer maker when it bought the PC unit of International Business Machines Corp in May 2005.
"In China we cover consumers up to large enterprises with a full line," he said. "Abroad, what we bought is primarily large accounts and government. Now we can fill in that space."
China's economy posts biggest rise in a decade
January 26th, 2007THE Chinese economy grew 10.7 percent in 2006 - the biggest increase in 10 years, even as the nation's financial leaders tried to rein in excessive growth.
Their efforts did appear to have some effect in the last quarter, however, as the blistering pace tailed off slightly with a decline in fixed-asset investment.
Gross domestic product mounted to 20.94 trillion yuan (US$2.7 trillion) in the world's fourth-largest economy last year, driven by overseas sales, investment and booming domestic consumption, the National Bureau of Statistics said yesterday.
Yearly growth exceeded the 10.4 percent gain in 2005, the bureau said. But after GDP peaked at 11.5 percent in second-quarter 2006, the rate of increase tailed off to 10.4 percent in the last three months.
"A combination of policies to rein in lending and control land use helped prevent the economy from expanding faster," Xie Fuzhan, chief of the National Bureau of Statistics, said in Beijing.
Among the economy's major components, the manufacturing sector grew the most last year, surging 12.5 percent to 10.2 trillion yuan. It was followed by the service industry, which advanced 10.3 percent to 8.27 trillion yuan. Agriculture rose five percent to 2.47 trillion yuan.
The country's macroeconomic controls finally began to gain traction. Fixed-asset spending rose 24 percent to 10.99 trillion yuan overall, slowing from the 29.8 percent in the first half and 25.7 percent in 2005. Investment in the nation's urban fixed assets climbed to 9.35 trillion yuan, up 24.5 percent from a year earlier, compared with a 27.2 percent on year gain in 2005.
"Investment growth showed visible deceleration, which could be partially attributed to policy tightening in the second half of 2006," said Liang Hong, an economist in the global investment research division of Goldman Sachs.
"The central bank will likely maintain a tightening bias during the first quarter this year to prevent a rush in bank loan approvals."
The central bank has stepped up land controls to make project approvals harder to come by, hiked interest rates and raised banks' reserve requirements to curb credit and cool off an investment boom that has left the country with too much production capacity and idle factories.
Among other economic barometers, inflation last year stood at 1.5 percent, buffeted by a sudden increase of 2.8 percent in December as grain costs surged.
Still, the growth rate in consumer prices was smaller than the 1.8 percent in 2005.
Retail sales jumped 13.7 percent in 2006 to 7.64 trillion yuan, up from the 12.9 percent gain a year earlier as the government cut taxes, raised minimum wages and increased spending to improve education, welfare and health care.
Disposable incomes among the nation's city dwellers advanced 12.1 percent to 11,759 yuan while those in rural regions climbed 10.2 percent to 3,587 yuan.
Foreign trade jumped 23.8 percent to US$1.76 trillion, yielding a record surplus of US$177.5 billion, up from the US$102 billion in 2005.
Services Trade With China Boosts US Jobs, Payments
January 25th, 2007January 23, 2007 -- The dramatic expansion of trade and investment in services between China and the United States has benefited both economies substantially and will continue to do so for the foreseeable future, according to a new study by Oxford Economics. The study shows that the US could add as many as 240,000 new, high-paying service industry jobs by 2015 as a result of the growing trade with China, in which the United States has a balance of payments advantage.
The study, "The Prospects for US-China Services Trade and Investment," was released today by the China Business Forum, the educational and research arm of the US-China Business Council (USCBC).
"This study shows that the future benefits are clearly significant for both the US and Chinese economies if China continues to open its service sector to foreign providers," said John Frisbie, president of the USCBC. "The US is the world's leading service economy and this is an important area for growth."
Trade and foreign investment in China's service sector already benefit both economies, according to the study. The United States has a services trade surplus with China, worth $2.6 billion in 2005. Net US service sector exports and income of service sector investments to China, worth $3.1 billion in 2005, currently support 37,000 jobs in high-productivity sectors of the US economy.
If the pace and scope of China's service sector reform accelerate, the US services trade surplus with China could increase to around $60 billion by 2015, and extra income from US service-related investments in China would be worth $7 billion. The average US household would be better off by about $500 per year in 2010 as a result of this growth in services trade with China. By 2015, the US benefits would include the 240,000 new service sector jobs.
In the long run, US service sector exports to China could reach between 1.5 percent and 3.5 percent of US GDP. The US service sector trade surplus with China could be worth around 1 percent of US GDP, while inflows of profits from US service sector investments in China could contribute a further 0.5 percent of GDP to the US current account of the balance of payments.
"Our research shows that implementing China's World Trade Organization commitments is an essential first step to maximizing the advantages for both economies of service sector trade and investment. If China increases the pace and scope of reform in the sector, the benefits will be even more substantial and long-lasting," said Erik Britton, director of Economics at Oxford Economics and lead author of the study.
If the impediments to service sector growth in China are fully removed, the average Chinese household would be better off by $300 to $400, or RMB 2,300 to RMB 3,100, per year by 2015. The benefit would amount to an additional $138 billion in GDP (in 2006 prices). In this scenario, the growth in service sector trade and investment will add up to 7 million jobs in China in relatively high-paying, high-productivity service industries by 2015.
"As China's economy shifts toward one based on services, consumption -- and possibly imports -- may rise. This would provide even more opportunities to US companies selling to China," USCBC President Frisbie said.
About the China Business Forum and the USCBC
The China Business Forum, Inc. (www.chinabusinessforum.org) was established by the US-China Business Council (USCBC, www.uschina.org) to promote broad-based policy discussion and greater understanding in both China and the United States of the economic systems and business methods of each country and of the role of commerce in the overall relationship between the United States and China.
The USCBC is the leading organization of US companies engaged in business with the People's Republic of China. Founded in 1973, the USCBC provides extensive China-focused information, advisory, and advocacy services, along with events, to nearly 250 US corporations operating within the United States and throughout Asia.
About Oxford Economics
Oxford Economics (www.oef.com) is one of the world's leading providers of economic forecasting, analysis, modeling, and advisory services. Oxford Economics supplies a range of "off-the-shelf" products and services in addition to customized economic consultancy services, with staff in London, Oxford, and Philadelphia.
China's 1st OTC market likely to be in Tianjin
January 25th, 2007CHINA'S first national over-the-counter equity bourse is likely to be set up soon in the northern city of Tianjin as part of moves to build a multi-layer capital sector, industry sources said yesterday.
The establishment of the OTC exchange is now subject to a final nod from the National Development and Reform Commission, the nation's top economic planner, said people with direct knowledge of the plan.
China's mainland has two main boards in Shanghai and Shenzhen, a small- and medium-sized enterprise board in Shenzhen as well as an OTC trading system for Beijing-based technology firms.
Analysts believe the OTC bourse, to be sited in the Binhai New Area, a state-backed economic zone, will bolster Tianjin's lure as a new financial hub apart from Shanghai.
"I guess that's more or less related to political balance," said a senior stock analyst in Shanghai. "On the southern coast, we have Shenzhen as a financial center and on the eastern (coast), Shanghai. And now it's time to have a northern one."
Tianjin's OTC market will only be available to institutional investors, the sources said. Companies traded on the bourse can apply to list on the main boards if they meet the listing criteria, sources said.
"The OTC bourse in Tianjin will be open to host all domestic companies that temporarily fail to meet main-board listing requirements," said a Tianjin-based source.
The sources noted setting up the Tianjin bourse will basically complete moves to create a multi-tier equity market. Big cap firms will list in Shanghai, medium ones in Shenzhen and small firms may trade on the Tianjin OTC market, they said.
Pfizer cutbacks may set trend
January 24th, 2007PFIZER Inc's plan to eliminate 10,000 jobs, or 10 percent of its workforce, may ripple through the pharmaceutical industry and prompt similar cuts from rivals such as GlaxoSmithKline Plc and Sanofi-Aventis SA.
Pfizer, the world's biggest drug maker, said yesterday it would close two US factories, consider selling one in Germany, shut down five research centers in the US, Japan and France, and reduce its European sales force by 20 percent, according to Bloomberg News. The plan will slash annual spending by US$500 million to US$1 billion.
Chief Executive Officer Jeffrey Kindler is deepening cuts after Pfizer reported a 43 percent drop in fourth-quarter profit and generic copies of top-selling drugs began eating into revenue. Glaxo, Sanofi and other drug makers facing competition from cheaper copies would benefit by following New York-based Pfizer's staff reductions and site closings.
"In the face of stalling sales with limited new-product flow and significant generic competition for a lot of the big brands, it does make sense that the industry unilaterally disarms" after a 15-year expansion, said Deutsche Bank analyst Barbara Ryan yesterday in an interview. "Pfizer is the 800-pound gorilla."
Drugs generating a combined US$23 billion in annual sales, or almost 10 percent of the US market, lost patent protection last year, according to health research firm IMS Health Inc. Cheaper copies can drive prices down as much as 80 percent.
Alice Hunt, a spokeswoman for London-based Glaxo, and Steve Brown, a spokesman for London-based AstraZeneca Plc, declined to comment on how Pfizer's plan would affect their need for sales staff. Jean-Marc Podvin, spokesman for Paris-based Sanofi, declined to comment before the company's February 13 earnings release and press conference.
At Pfizer, fourth-quarter revenue rose less than a percent to US$12.6 billion as generic competition weighed on sales of the antidepressant Zoloft, Pfizer's third-biggest drug. The company repeated a forecast that revenue won't grow this year and next year above last year's US$48.4 billion.
Pfizer's sales will plummet after 2011 when it loses patent protection for its Lipitor cholesterol pill, which accounts for almost half of profit, analysts predicted. In the fourth quarter, revenue from the drug declined to US$3.34 billion from US$3.36 billion a year earlier. The product's sales for 2006 rose six percent to US$12.9 billion, missing the company's goal of US$13 billion.
Pfizer shares gained nine percent in the New York Stock Exchange in the past 12 months, underperforming a 13 percent rise in the 14-member Standard & Poor's 500 Pharmaceutical Index.
China Mobile moves abroad
January 23rd, 2007CHINA Mobile will buy a majority stake in a Pakistani carrier for US$284 million in an arrangement that's expected to be sealed next month, the companies said yesterday.
The venture will be the world's biggest mobile phone carrier's first international deal and is seen as a symbolic start for its global expansion strategy, industry insiders said.
Beijing-based China Mobile will pay cash for an 88.86 percent stake in Paktel Ltd, a unit of Luxembourg-based Millicom International Cellular SA, which operates networks in developing countries.
Paktel, ranking fifth in Pakistan with 1.5 million users, is valued at US$460 million, according to a statement from Millicom.
China Mobile confirmed the deal yesterday but declined further comment.
The arrangement still needs regulatory approval.
"Chinese telecommunications carriers are making strategic moves to focus on international markets as the domestic market is now growing slowly after several years of rapid expansion," said Yi Mingyu, an analyst at Beijing-based CCID consulting, a research firm under the Ministry of Information Industry.
Among all Chinese carriers, China Mobile's growth is still considerable, Yi said.
Hong Kong-listed China Mobile earned 96.8 billion yuan (US$12.1 billion) last year, up 23 percent from 2005. The company's total user base hit 318 million, a 20 percent increase from the previous year, the company said in a statement last week.
China Mobile's development strategy is to invest overseas, especially to explore emerging markets, company Chairman Wang Jianzhou said in September.
China Mobile wants to export to emerging countries the marketing tactics and technology it developed in the rural areas of China, the world's largest market by users.
The company also can't afford the high cost of expansion in Western countries, where mobile penetration rate is already around 100 percent, Yi said.
China Mobile failed last July to acquire Millicom, which operates networks in 16 emerging markets including Latin America and Africa.
"The sale of Paktel allows Millicom to focus on the 16 markets where we have already established strong market positions," Marc Beuls, Millicom president and chief executive, said in a statement.
Wage growth, spending lift HK job rolls
January 22nd, 2007HONG Kong's jobless rate held at the lowest point in almost six years, fueling wage growth and consumer spending among the city's seven million inhabitants.
Seasonally adjusted unemployment for the three months ending on December 31 was unchanged at 4.4 percent, the government said yesterday on its Website. That's the lowest since January 2001 and matched the median estimate of 15 economists surveyed by Bloomberg News. The average jobless rate for last year fell to 4.8 percent from 5.6 percent in 2005.
Banks, transport companies and retailers are benefiting from proximity to the Chinese mainland and hiring workers to expand. A labor shortage has forced employers to raise salaries, helping to spur retail sales and increasing inflation.
"It's a very good number," said Vincent Kwan, chief economist at Hang Seng Bank Ltd in Hong Kong, predicting further declines. "With the jobless rate falling, salaries will rise and that should strengthen consumer spending."
Employment jumped by 9,100 to a record 3.52 million, while the number of people unemployed fell by 4,500 to a five and a half year low of 157,100, the government said.
The Brunswick Purchasing Managers' Index, a measure of economic activity, rose to 57.4 in December, the highest in more than six years, as companies received more orders and production increased.
Hong Kong's "buoyant" financial markets and economy helped to produce "very strong job growth," and unemployment is likely to fall to four percent by the end of the 2007, Kwan said.
Salary surge expected to continue this year in china
January 19th, 2007Salaries in China surged last year and are expected to increase further this year, according to a survey conducted by global human resources firm Mercer Human Resources Consulting.
The survey showed wages in China rose an average 7.94 percent year-on-year in 2006. And Mercer estimated salaries would continue to increase by 7.7 percent in 2007.
Wages in China's oil and IT industries saw a substantial increase of 8.3 percent last year.
The survey covered 1,800 domestic and foreign enter-prises in industries including high-tech, IT, pharmaceuticals, manufacturing, retail, auto, oil and finance.
Shanghai saw the strongest pay surge, with average wages increasing 7.7 percent. Guangzhou and Beijing followed at 7.6 percent and 7.2 percent respectively.
For the high-tech industry, salaries increased in Shanghai, Guangzhou and Beijing 7.3 percent, 6.9 percent and 6.5 percent respectively.
Car industry wages climbed 8.3 percent, 7.9 percent and 7.8 percent respectively in Shanghai, Guangzhou and Beijing.
Mercer's survey was carried out in 13 Chinese cities including Beijing, Shanghai and Guangzhou, and second-tier cities such as North China's Tianjin Municipality, Nanjing and Suzhou in East China's Jiangsu Province, as well as Dalian in Northeast China's Liaoning Province.
The survey also showed that salaries of mid-level managerial staff climbed 8.5 percent, much higher than the average of all employees interviewed.
Middle managers' pay increased 8.7 percent, 8.6 percent and 8.4 percent in Shanghai, Guangzhou and Beijing respectively last year.
But despite higher pay, middle managers preferred to job hop according to the survey, indicating they were the most sought-after employees in the job market.
Salary and remuneration packages have become a key factor for employees, said Brenda Wilson, managing director of Mercer China.
"Employers are faced with two great pressures the drain of excellent employees and increasing salary costs," said Wilson.
Analysts said that given the competitive employment climate, employers needed to find more efficient tools to retain high-caliber staff. A decent salary and attractive remuneration package were considered the most common measures.
"Employers realize they should adopt a new talent introduction and retaining mechanism," said Wilson. She said this would involve recognizing outstanding employees by widening the salary gap, formulating a quick-response pay adjusting system, and providing good conditions such as flexible working hours.
A reader's toolbox:
You can use your credit card to apply for personal loans as well as business loans. However the sanctioning depends upon your use of creditcard as well as payment routine of life insurance. The company usually wants to confirm if you will or will not be applying for debt help eventually.
Lack of risk management awareness
January 18th, 2007CHINA'S chief executive officers are more concerned over finding qualified managers but they lack awareness about risk management compared with their global counterparts, an industry report said.
About 46 percent of CEOs who took part in the survey put "finding qualified managerial talents" and "acquiring and developing the right talent" as issues of greatest concern, the Conference Board and Ernst & Young said in a recent report.
In Europe and the United States where the talent market is more matured, CEOs there do not need to put "finding talents" as a major challenge.
In comparison, the pool of talent available in China is growing and evolving, making it one big headache for the bosses.
But a similarity exists in all top management globally, namely a focus for sustained and steady top-line growth and profit expansion.
"CEOs in China place the need for sustained and steady top-line growth and seizing opportunities for expansion and growth in China at the top of their list of challenges," said the survey.
The top concern for CEOs worldwide is sustained and steady top-line growth, with 37.5 percent of those surveyed naming it their top challenge. In China, 53.8 percent put it as their top challenge, tied with seizing opportunities for growth in China.
Meanwhile, despite risk management being an increasingly predominant global business issue, it is still not regarded generally as one of the top challenges by CEOs in China.
"CEOs in China are now only beginning to examine, understand and implement risk management as a business tool," said Eric Chia, an Ernst & Young partner. "This lack of focus on risk management can present challenges for many Chinese companies and we strongly advise CEOs to better prepare themselves."
The China study is an extension of a survey of 658 global CEOs from 40 countries. The number of managers in China who took part was not given.
Baidu gains partner as EMI chases ad revenue
January 17th, 2007EMI Group Plc, which lost a copyright lawsuit against Baidu.com, has agreed to work with the Chinese search engine to distribute streaming samples of its music online and share advertising revenue from the service under a "strategic partnership."
The two companies will also explore advertising-supported music download services that will be free of charge for all users of Baidu, the world's fourth most visited site and whose MP3 search function already contributes to 14 percent of its online traffic.
"It's a landmark revenue-sharing arrangement between an Internet search engine and an international music company in China," said a joint statement by the two companies yesterday.
Beijing-based Baidu will set up a special EMI Music Zone in its music search channel that will stream all of EMI Music's Chinese language music. While users listen to the music for free, they will be exposed to online ads.
"It provides an efficient digital distribution platform to reach Chinese consumers, allowing fans to listen to EMI's latest quality music immediately on the Internet," said Norman Cheng, chairman of EMI Music Asia in the statement.
Sales of search engines in China last year rose by nearly 50 percent from a year ago to 157 million yuan (US$20 million), at a much greater growth pace than Web portals.
Based on ratings of the commercial users that paid for advertising on the search engines, Baidu.com topped the market with a 39 percent share of the China market, followed by Google Inc's 20 percent and Yahoo's 12.6 percent.
Meanwhile, sales of online advertising excluding ads revenue by search engines in the past year in China also soared by 51 percent to nearly five billion yuan.
EMI was one of seven record companies that filed an infringement lawsuit against Baidu in September 2005, claiming the Website violated copyright by providing links to illegal music on non-affiliated sites. A Beijing court ruled in Baidu's favor.
China, ASEAN sign trade agreement
January 15th, 2007CEBU, The Philippines: China and the Association of Southeast Asia Nations (ASEAN) signed an agreement on trade in services here yesterday - a major step toward establishing a free trade area (FTA) in the region by 2010.
The deal, which was inked in the presence of Premier Wen Jiabao and 10 ASEAN leaders, will help firms from the Southeast Asian economic bloc gain improved market access to multi-billion dollar service sectors including banking, information technology and tourism.
The agreement "marks a key step forward in building the China-ASEAN Free Trade Area and lays the foundation for its full and scheduled completion," Wen said in a keynote speech yesterday at the 10th ASEAN-China Summit.
Trade between China and the ASEAN states has been booming in the past 15 years it grew more than 20 per cent a year, reaching $160 billion last year. The two sides are each other's fourth-largest trading partners.
Trade volume will continue to grow by about 20 per cent this year although the possible outbreak of bird flu, natural disasters, regional security and global financial risks could slow the increase, Lu Jianren, a researcher at the Chinese Academy of Social Sciences, predicted.
An agreement on merchandise trade took effect in July, 2005, following an early harvest scheme of initial tariff cuts on meat, fish, dairy products, vegetables, fruits and nuts. The services agreement was one of the remaining key items to be finalized in addition to an investment agreement.
Speaking at the summit, Wen called for the acceleration of talks on the investment agreement so as to complete setting up of the FTA by 2010 as planned.
When completed, the China-ASEAN FTA will be the world's largest, encompassing around 1.7 billion consumers and with total trade estimated at $1.2 trillion. Related comment: ASEAN comes of age
Southeast Asia is moving, though very slowly, towards economic integration. Once established, the region will be the largest trading bloc in the world.
To promote the building of the FTA, China is ready to speed up discussions and sign a memorandum of understanding on establishing the China-ASEAN Trade, Investment and Tourism Promotion Center, Wen said.
China also proposes ASEAN transport collaboration be strengthened in the next 10 to 15 years to facilitate development of regional transportation and communication.
Wen noted China would enhance cooperation in combating transnational crime, maritime security, disaster reduction and relief, prevention and control of communicable diseases and environmental protection.
Wen was in Cebu to attend a series of East Asian summits that include the 10th ASEAN-China Summit, the 10th ASEAN Plus China, Japan and Republic of Korea (ROK) Summit ("10+3" Summit) and the 2nd East Asia Summit. He also chaired the 7th Chinese, Japanese and ROK Leaders' Meeting yesterday.
Seven Major Job Trends for 2007
January 12th, 2007Is finding a new job on your list of New Year's resolutions? The market may be in your favor.
Recent reports from the U.S. Labor Department indicate that while the expansion of the U.S. economy is slowing, it is doing so at a reasonable pace, and inflation has steadied. A moderated, yet stable, job market is expected to carry over into 2007 with gains that will remain strong enough to keep the unemployment rate in check.
University of Michigan economists predict the United States will create 1.5 million jobs in the next 12 months. According to CareerBuilder.com's annual job forecast, 40 percent of hiring managers and human resource professionals operating in the private sector report they will increase their number of full-time, permanent employees in 2007, compared to 2006. Eight percent expect to decrease headcount while 40 percent expect no change. Twelve percent are unsure.
Employers are expected to become more competitive in their recruitment and retention efforts in the New Year as the pool of skilled labor shrinks and productivity growth plateaus. Forty percent of employers report they currently have job openings for which they can't find qualified candidates.
This bodes well for workers who are likely to benefit from more generous job offers, more promotions, more flexible work cultures and other major trends identified for 2007:
No. 1: Bigger Paychecks
To motivate top performers to join or stay with their organizations, employers plan to offer better compensation packages. Eighty-one percent of employers report their companies will increase salaries for existing employees.
Sixty-five percent will raise compensation levels by 3 percent or more while nearly one-in-five will raise compensation levels by 5 percent or more.
Nearly half of employers (49 percent) expect to increase salaries on initial offers to new employees.
Thirty-five percent will raise compensation levels by 3 percent or more while 17 percent will raise compensation levels by 5 percent or more.
No. 2: Diversity Recruitment -- Hispanics Workers in Demand
Understanding the positive influence workforce diversity has on overall business performance, employers remain committed to expanding the demographics of their staffs. With the Hispanic population accounting for half of U.S. population growth since 2000, according to the U.S. Census Bureau, and buying power growing 8 percent annually, one-in-ten employers report they will be targeting Hispanic job candidates most aggressively of all diverse segments. Nine percent plan to step up diversity recruiting for African American job candidates while 8 percent will target female job candidates.
Half of employers recruiting bilingual employees say English/Spanish-speaking candidates are most in demand in their organizations.
No. 3: More Flexible Work Arrangements
Work/life balance is a major buzzword among U.S. employers as employees struggle to balance heavy workloads and long hours with personal commitments.
Nineteen percent of employers say they are very or extremely willing to provide more flexible work arrangements for employees such as job sharing and alternate schedules. Thirty-one percent are fairly willing.
No. 4: Rehiring Retirees
Employers continue to express concern over the loss of intellectual capital as Baby Boomers retire and smaller generations of replacement workers fall short of labor quotas.
One-in-five employers plan to rehire retirees from other companies or provide incentives for workers approaching retirement age to stay on with the company longer.
No. 5: More Promotions
With the perceived lack of upper mobility within an organization being a major driver for employee turnover, employers are carving out clearer career paths.
Thirty-five percent of employers plan to provide more promotions and career advancement opportunities to their existing staff in the New Year.
No. 6: Better Training
In light of the shortage of skilled workers within their own industries, the vast majority of employers -- 86 percent -- report they are willing to recruit workers who don't have experience in their particular industry or field, but have transferable skills.
Seventy-eight percent report they are willing to recruit workers who don't have experience in their particular industry or field and provide training/certifications needed.
No. 7: Hiring Overseas
Companies continue to drive growth by entering or strengthening their presence in global markets. Thirteen percent of employers report they will expand operations and hire employees in other countries in 2007. Nine percent are considering it.
With China's economy expanding at 10 percent annually and India's at 8 percent, these two countries are particularly attractive to U.S. companies.
Twenty-three percent of employers recruiting overseas report they will hire the most workers in China and 22 percent will hire the most in India.
Survey Methodology
This survey was conducted online by Harris Interactive on behalf of CareerBuilder.com among 2,627 hiring managers and human resource professionals (employed full-time; not self employed; with at least significant involvement in hiring decisions), ages 18 and over within the United States between November 17 and December 11, 2006. Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents' propensity to be online.
With a pure probability sample of 2,627, one could say with a ninety-five percent probability that the overall results have a sampling error of +/- 2 percentage points. Sampling error for data from sub-samples is higher and varies. However that does not take other sources of error into account. This online survey is not based on a probability sample and therefore no theoretical sampling error can be calculated.
Matt Ferguson is CEO of CareerBuilder.com. He is an expert in recruitment trends and tactics, job seeker behavior and workplace issues.
SOHO China said to list in Hong Kong
January 12th, 2007SOHO China Ltd, a Beijing-based property developer, hired Goldman Sachs Group Inc and HSBC Holdings Plc to revive a Hong Kong initial public offering, people with direct knowledge of the transaction said.
SOHO China may raise US$400 million by June to finance new projects, Bloomberg quoted the people, who declined to be identified before a public announcement. Company spokeswoman Wang Chunlei declined to comment.
Mainland developers are tapping the Hong Kong stock market to fund new properties as the government tries to limit bank lending to the industry. China has restricted land supply, curbed loans to real estate companies and imposed new taxes to slow a surge in property prices and investment.
"Traditionally, developers have relied on bank loans," said Jason Yang, a senior manager at the professional services department of property agency Colliers International in Beijing.
"They are now either launching public share sales or real estate trust offerings to cope with the funding crunch as a result of the tightening measures."
Chinese developers aren't allowed to use bank loans to buy land sites, said Wayne Zane, a director of research at Colliers in Shanghai. The government in 2004 raised the amount of cash developers have to come up with on their own to 35 percent of total development costs from 20 percent.
SOHO China in 2002 delayed a US$250 million IPO in Hong Kong and the US because of disagreement between arranger Goldman Sachs and other advisers involved in the sale over its profit outlook, bankers involved said at the time.
The company in January 2003 scrapped the sale, citing unfavorable market conditions in a filing with the US Securities and Exchange Commission. SOHO's Website contains no information on its earnings.
SOHO was co-founded by former oil ministry employee Pan Shiyi and his wife, former Goldman Sachs analyst Zhang Xin, in 1995. The couple ranked 237th on Forbes magazine's list of Chinese mainland's 400 richest people last year.
Beijing's average real estate prices increased 16.7 percent to 8,792 yuan (US$1,128) per square meter last year, Xinhua news agency reported on Jan. 8, citing a report released during an industry conference.
As much as 200.1 billion yuan worth of apartments, houses, office buildings and shops were sold in the Chinese capital last year, Xinhua said without giving a comparative figure for 2005.
SOHO China has focused on buying sites in the Central Business District in eastern Beijing, where it built residential and office properties under the SOHO brand, catering to the city's newly rich.
"It has shown a track record of acquiring prime sites," Yang of Colliers said. "Its property sales have been brisk."
The company has developed 1.58 million square meters of properties, about a fifth of the Central district's total area, according to its Web site. Projects include Jianwai SOHO, a residential and commercial complex opposite the China World Hotel.
Some Chinese property stocks traded in Hong Kong have rallied in the past year, triggering a rush to raise more money selling stock. Hopson Development Holdings Ltd. which invests in Chinese properties, saw its shares jump 132 percent in 2006. The company raised US$126 million in a Hong Kong stock sale in November.
Guangzhou R&F Properties Co Ltd, which raised US$208 million selling shares in September, soared 149 percent last year.
Managed assets rise above US$60b at Man Group
January 12th, 2007MAN Group Plc, the world's largest publicly traded hedge fund manager, said assets under management rose above US$60 billion as clients added more money in the final quarter of 2006 compared to a year earlier and investments gained.
Fund sales reached US$2.5 billion in the quarter, while redemptions stood at US$1.1 billion, London-based Man said in a Regulatory News Service statement yesterday, according to Bloomberg News. Fund performance added US$2 billion to assets. Man had US$56.8 billion under management at the end of September.
Chief Executive Officer Stanley Fink, who steps down in April, has increased Man Group's assets under management more than tenfold during his five-year tenure. Net client inflows totaled US$1.4 billion in the three months through December, double the US$700 million during the same period a year earlier.
"The good news in the story is the low redemption rate and the sales to private investors," said Bruce Hamilton, an analyst at Morgan Stanley in London who has an "overweight" rating on the stock.
Man Group said US$34.6 billion of its assets were overseen for individual investors, compared with US$23.5 billion for institutions. Companies benefit from individual investors because they tend to pay higher fees than institutions such as pension funds.
Replacement
During the first six months of the company's fiscal year, which end in March, Man Group posted net inflows of US$7 billion.
Fink took over Man in 2000 when it had US$4.7 billion of assets. He will be replaced by Finance Director Peter Clarke.
The company took in money even as some of Man Group's funds underperformed. Its flagship AHL Diversified fund last year gained about 6.4 percent to December 25, undershooting the 17 percent surge of the Morgan Stanley Capital International World Index and the 11 percent gain for the Standard & Poor's 500 Index.
Hedge funds typically cater to clients with at least US$1 million to invest, and take larger bets than traditional funds. They usually charge a fee of about two percent for managing money as well as 20 percent of any investment gains.
Headhunting Is A $1Bn Industry Now
January 10th, 2007Outsourced hiring, or hiring through third party recruiters, will be an over $1 bn industry this year. It grew slowly initially, but in 2005-2006, the business saw exponential growth, posting a turnover of Rs 3,922.32 crore, against Rs 630.98 crore in the year before. The industry this year is seen to be growing at about 40 pct. So by the fiscal-end, it would go well past $1 bn, according to a study by the Executive Recruiters¡¯ Association (ERA). The ERA has culled out information on manpower recruitment in consultation with 93 different service tax collection points across the country, the major commissionerates being Mumbai, Delhi, Kolkata, Chennai, Ahmedabad, Bangalore, Pune and Hyderabad. Since recruitment firms pay service tax, the annual figures are arrived at on the basis of the tax paid. The study looked at performance of the recruitment industry for last nine years.
Beijing's GDP per capita exceeds $6,000
January 9th, 2007Chinanews, Beijing January 8 ¨C The GDP per capita of permanent residents in Beijing was over $6,000 in 2006, ranking it among intermediate developed cities in the world.
The statistics were revealed by Chai Xiaozhong, vice director of Beijing Municipal Development and Reform Commission, last Friday.
Investment is no longer the major booster of economic growth in Beijing, the great leap of domestic consumption having contributed the most to the boom of local economy. Furthermore, most consumption in Beijing has little to do with subsistence, but with entertainment and personal development.
China:70% target for unions in foreign companies
January 5th, 2007The All-China Federation of Trade Unions has set an ambitious target of having trade unions set up in more than 70 per cent of foreign-funded enterprises this year.
Wang Ying, an official with the federation's Grass-Root Organization and Capacity Building Department, said more than 60 per cent of foreign-funded firms had set up trade unions by the end of last year, a sharp increase from 2005.
The establishment of unions in Wal-Mart has given a big impetus to many other foreign enterprises, Wang said.
Employees in some multinationals such as Carrefour, McDonald's, Motorola and Nescafe soon followed suit.
Between July and September, all the 64 Wal-Mart stores in 30 cities established trade unions with the help of the federation, recruiting more than 6,000 members.
It is for the first time the US retail giant allowed its staff to form unions anywhere in the world.
"China's Law of Trade Union gives workers the rights to set up or join trade unions," Wang said. "Foreign enterprises must abide by China's laws if they do business in China."
According to the law, which was promulgated in 1992, trade unions are formed by employees on a voluntary basis. No organization or individual shall obstruct or restrict them from joining unions.
Wang admitted the federation has met with resistance from some companies, which subtly obstruct workers from setting up unions.
"Many of the foreign enterprises do not fully understand the role of China's trade unions," Wang said.
They not only safeguard the legitimate rights and interests of workers but also contribute to the enterprises' development and fulfil their production tasks, he pointed out.
"Trade unions can play a good role in building and ensuring harmony in enterprises," Wang said, saying some companies which were long opposed to unions have now changed their attitude.
Wang said unions in foreign enterprises have performed their duties.
For example, the Wal-Mart unions in Fuzhou, capital of Fujian Province, succeeded in persuading the management to raise part-time workers' wages to 6 yuan (75 cents) per hour, above the lowest wage standard, 5.5 yuan (69 cents).
The stores also agreed to abolish the probation period for part-time workers.
The Wal-Mart union in Shenyang, capital of Liaoning Province, successfully negotiated the right one day off a week.
Dong Yuguo, a spokesman for Wal-Mart (China), said: "The management and the trade union have been getting along with each other very well," Dong said.
"Our task is to raise workers' awareness and let them know that joining trade unions is the best way to safeguard their legitimate rights and interests," Wang said.
At the end of 2005, China had 1.174 million grass-root trade unions, with 151 million members.
Firms face cuts in business in china
January 4th, 2007FORTY Chinese mainland-listed companies may have their daily trading limits halved starting on Monday as they failed to meet a deadline to convert non-tradable shares, industry sources said yesterday.
Eighteen Shanghai-traded and 22 Shenzhen-listed companies will be subject to a trading ceiling of five percent per day, down from 10 percent currently, people familiar with the matter said.
The two mainland bourses over the weekend approved the latest batch of 32 companies to join in the shareholding reform, which was initiated in May 2005 to make all stocks at mainland-listed firms tradable.
Under regulatory arrangement, controlling stake holders must compensate minority investors with shares, cash or warrants in exchange for the right to float their previously locked ownership.
So far, about 97 percent of 1,300-odd mainland-listed companies have participated in the share overhaul, which regulators had hoped to finish by the end of last year.
Authorities have said companies escaping the stock conversion won't be allowed to raise additional funds or conduct any new businesses in the capital markets.
Sources said yesterday there's still a possibility for some of these 40 firms to be exempted from lower trading limits if they can rush to gain the regulatory nod for the share conversion by Monday.
But they also noted companies would face a 10 percent trading limit if they missed the stockholding reform deadline.
The Shanghai and Shenzhen bourses said in late December that firms which don't join the reform face being eliminated from major benchmark indexes.
The offending companies will also be subject to a different price-bidding system from other listed firms, the two bourses said, without specifying.
Foreign trade barriers cost Chinese exporters US$70 billion
December 26th, 2006Technical barriers established by foreign countries cost Chinese exporters up to 69.1 billion US dollars last year, said a report from the Commerce Ministry in Beijing on Monday.
"The textile industry has been most affected by barriers, taking up to 43 percent of the losses," said the report. "Exports of food, poultry, wood products, electronic and machine products were also greatly affected."
The report said the European Union and the United States had taken the lead in setting high technical standards for Chinese export products, followed by Japan and the Republic of Korea.
These countries usually added items to inspection and quarantine lists or revised trade regulations on the grounds of environmental protection, consumer health and other reasons, said the report.
Among 22 categories of Chinese export commodities, 18 had encountered technical barriers in 2005, said the report.
Chinese export companies were learning to respond rapidly to foreign technical barriers and improve competitiveness in exports, but there was still a long way to go, said the report.
The government started to set up centers across the country this year to analyze technical standards for foreign market access, issuing regular reports for the government and industries.
Under WTO rules, every WTO member has the legitimate right to question new trade regulations by other nations within 60 days of the promulgation. However, the lack of assistance from technical experts and the abstruseness of technical standards often frustrate Chinese companies and prevent them from taking effective action.
One hundred technical service centers are scheduled to be set up by 2010 to cover more than half the country's export commodities, according to the ministry.
Thirty thousand overseas experts to be recruited
December 25th, 2006The Ministry of Personnel is bringing in some 30,000 overseas specialists next year to address China¡¯s talent shortage in certain sectors. ¡°The governmnt is to introduce 10,000 economic and technical specialists and 20,000 education, health and science specialists in 2007,¡± Zhang Baolin, Minister of Personnel, told Xinhua News Agency in an interview. Zhang said China should further explore international intellectial resources, which has provided strong support to the country¡¯s overall development. China has already recruited a total of 400,000 specialists from overseas, Hong Kong and Macao special administrative regions and Taiwan.
¡¡¡¡At the same time, China will explore establishing a mechanism to attract Chinese currently overseas to work in the country. The plan also hopes to target foreign talents.
¡¡¡¡The ministry is preparing for the fifth round of job recruitments in Beijing slated for April 21, 2007. For more information, contact.
Job market vibrant, but needs talents
December 22nd, 2006The job market is vibrant and vacancies have increased in the past year, especially in the financial sector, but Hong Kong is facing a shortage of qualified talents, an online recruitment portal said yesterday.
Monster Hong Kong Vice-president Suk Chiu said 58,000 job vacancies were posted on his website in 2006, an yearly increase of 104 per cent.
Vacancies in the banking and finance sector had increased by 56 per cent, with those in banks and accounting/audit firms rising by 28.45 and 102.51 per cent.
The need for more and wider banking services and products has fuelled the growth, he said. "There are more insurance and private investment services today, and they have been creating the demand for talents."
Accounting firms, too, reported a rapid growth because of a high demand for such services created by the mainland's economic development.
Vacancies in the marketing and retailing sectors have doubled because of the increasing number of individual travellers from the mainland.
But despite the rosy job market, Hong Kong has a dearth of talents, the Asia regional director of head-hunting firm Hays, Emma Charnock-Smith, said. So serious is the problem that not a single candidate from among the 200 shortlisted by Hays were offered a job by a company.
Such a problem is common particularly in legal, accounting, trading and banking sectors, she said.
This could force companies to hire Hong Kong residents living overseas. "Such candidates have local knowledge and international experience both. They have a good command over Chinese and English, too," she said.
Companies could also offer a more attractive package, including family allowances, to hire such people.
She said Hong Kong people in Canada and Australia would be more interested in coming back because the Hong Kong dollar was comparatively more competent against their currencies than the greenback or the pound sterling.
Hong Kong jobless rate falls to lowest in almost six years
December 20th, 2006HONG Kong's jobless rate fell for a fifth straight month in November to the lowest in almost six years, helping sustain the longest economic expansion in a decade, the government said yesterday.
The seasonally adjusted unemployment rate for the three months ended November declined to 4.4 percent from 4.5 percent in October, the government said on its Website. That was the lowest since January 2001 and matched the median estimate of 13 economists surveyed by Bloomberg News.
Banks, transport companies and retailers have stepped up hiring as the special administrative region piggybacked on booming growth on the Chinese mainland. Rising wages, and soaring stock and property prices are underpinning consumer confidence, helping Hong Kong withstand a slowdown in the United States economy.
"This reflects the healthy expansion in Hong Kong that has translated into the labor market," said David Cohen, an economist at Action Economics in Singapore. "It should be supportive to consumer spending."
Total employment jumped by 12,900 from a month earlier to a record 3.51 million. The number of unemployed slipped by 7,200 to 161,700, the lowest in more than five years, the report said.
The Brunswick Purchasing Mangers' Index, a gauge of economic activity in Hong Kong, climbed to 56.3 in November, the highest in three years. The index of employment rose to an eight-month high of 54.3, suggesting companies may step up hiring in coming months.
A tighter labor market has forced employers to raise salaries to keep workers and attract new ones. Wages rose 3.3 percent in the third quarter - an increase that may start to feed into inflation, economists said.
"Labor costs may push prices higher in the next two years," said Vivian Chiu, an economist at UBS AG in Hong Kong. Still, inflation "isn't a big crisis at the moment."
Hong Kong's consumer prices climbed one percent last year, the first annual increase since 1998. The government forecasts inflation will accelerate to two percent this year.
On November 21, the government raised its forecast for economic growth this year to 6.5 percent from as much as five percent previously, partly because of rising domestic demand. The economy expanded 6.8 percent in the third quarter.
The city has created about 311,000 new jobs since unemployment peaked at 8.6 percent in July 2003, the government estimates. The benchmark Hang Seng index almost doubled in the same period, breaking 19,000 for the first time last month.
As a result, residents are spending more on everything from clothes to transport. Sa Sa International Ltd, Hong Kong's biggest cosmetics retailer, on November 30 said first-half profit climbed 11 percent as sales jumped.
ERP Software as GDP Indicator for China
December 20th, 2006HONG Kong's jobless rate fell for a fifth straight month in November to the lowest in almost six years, helping sustain the longest economic expansion in a decade, the government said yesterday.
The seasonally adjusted unemployment rate for the three months ended November declined to 4.4 percent from 4.5 percent in October, the government said on its Website. That was the lowest since January 2001 and matched the median estimate of 13 economists surveyed by Bloomberg News.
Banks, transport companies and retailers have stepped up hiring as the special administrative region piggybacked on booming growth on the Chinese mainland. Rising wages, and soaring stock and property prices are underpinning consumer confidence, helping Hong Kong withstand a slowdown in the United States economy.
"This reflects the healthy expansion in Hong Kong that has translated into the labor market," said David Cohen, an economist at Action Economics in Singapore. "It should be supportive to consumer spending."
Total employment jumped by 12,900 from a month earlier to a record 3.51 million. The number of unemployed slipped by 7,200 to 161,700, the lowest in more than five years, the report said.
The Brunswick Purchasing Mangers' Index, a gauge of economic activity in Hong Kong, climbed to 56.3 in November, the highest in three years. The index of employment rose to an eight-month high of 54.3, suggesting companies may step up hiring in coming months.
A tighter labor market has forced employers to raise salaries to keep workers and attract new ones. Wages rose 3.3 percent in the third quarter - an increase that may start to feed into inflation, economists said.
"Labor costs may push prices higher in the next two years," said Vivian Chiu, an economist at UBS AG in Hong Kong. Still, inflation "isn't a big crisis at the moment."
Hong Kong's consumer prices climbed one percent last year, the first annual increase since 1998. The government forecasts inflation will accelerate to two percent this year.
On November 21, the government raised its forecast for economic growth this year to 6.5 percent from as much as five percent previously, partly because of rising domestic demand. The economy expanded 6.8 percent in the third quarter.
The city has created about 311,000 new jobs since unemployment peaked at 8.6 percent in July 2003, the government estimates. The benchmark Hang Seng index almost doubled in the same period, breaking 19,000 for the first time last month.
As a result, residents are spending more on everything from clothes to transport. Sa Sa International Ltd, Hong Kong's biggest cosmetics retailer, on November 30 said first-half profit climbed 11 percent as sales jumped.
Achievo's approach to finding talent in China
December 19th, 2006By Ian Lamont on Mon, 12/18/2006 - 12:28pm
Last week for the Computerworld Weekly I/O podcast, I interviewed James Zhang, vice president of human resources for Achievo. This Silicon Valley company has capitalized on Western and Japanese firms' interest in outsourcing software development work to China, where costs are cheaper. Zhang told me the privately held company has grown rapidly since being founded several years ago, and now has more than one thousand employees in North America, Europe, Japan, and Asia.
However, the competition for talented developers in Asia has led to high turnover in some cities. Achievo's strategy for recruiting and retaining developers in China includes setting up partnerships with universities and training institutes across China, in addition to Beijing and other economic centers, where competition and costs are higher. The institutions that have already partnered with Achievo include:
Beijing ACEIT Training Institute
Beijing Information Technology Institute
Hunan Vocational College of Science and Technology
Shenzhen University
Zhuhai College of Jilin University
While industry-academic partnerships are nothing new, they are a first for some of the institutions approached by Achievo, and also entail alterations to the curriculum for those students who are interested in working for Achievo after graduation. A transcript of a portion of my interview with Zhang follows:
Computerworld: Achievo has a very interesting HR strategy, to find talent in China. You've created a series of partnerships with local training institutes and universities. Can you describe generally how these partnerships work?
Zhang: My plan is to strategically select some partner, mapping [to where] we have operations in China. Because China is so big. You cannot really [depend on] just one university to supply [talent] from North to South, from East to West. People have a different regions, [and] styles, and ... habits, so they probably want to live and work close to their [home] region. We have four universities lined up with us, and we have one training institution lined up with us. Then the schools will specifically tailor some courses for the people who are interested in working for Achievo for the long term. So those students will be having some courses being switched to what we like them to have. And then they will take an internship to come to our company to work for us for several months, [to work toward their] graduation, their essays or final papers. We need to do the interviews to see who will be qualified, and then they will join Achievo. So there's progress, and a program set up.
Computerworld: Why bother doing this? Can't you just put an advertisement in the local newspaper, saying that you are looking for talented people? Or use other channels, like an H.R. agency to find people?
Zhang: Well, the [personnel] strategy needs to match the long-term growth of the company. The company is growing very fast, and doing very well. The university program is specifically targeting entry level engineers, which from cost-competitiveness and also from the supply pool, this will be the best source that we can get candidates.
Computerworld: How many graduates from these training institutes and universities will Achievo be able to recruit in your plan?
Zhang: We are looking for probably several hundred that we will need to hire next year from the university program.
Computerworld: So have you been able to hire anyone so far, or you really just got this off the ground?
Zhang: Yes. I think we have recruited close to a hundred [people] already through two universities and one training institute. And there are two more [programs] that we have set up, and one more [program] that will be finalized in a two-week timeframe.
China to introduce 30,000 overseas specialists
December 19th, 2006Dec.18 - China next year is to introduce 30,000 overseas specialists that the country is most in need of but also is in great shortage, according to the Ministry of Personnel.
"The government is to fund the introduction of 10,000 economic and technical specialists and 20,000 educational, health and scientific specialists in 2007," said Minister of Personnel Zhang Bolin.
Zhang said China should further explore international intelligence resources which has provided strong support to the country's overall development.
China has recruited a total of 400,000 specialists from overseas, Hong Kong and Macao special administrative regions and Taiwan, and has dispatched nearly 40,000 qualified personnel to study overseas.
The Chinese government will fund 10,000 Chinese talents to go and study overseas in 2007, Zhang said.
He calls for more preferential policies for returning students from overseas study so as to draw more Chinese students back to the motherland.
Since 1978, more than 400,000 Chinese students have studied abroad, with more than 100,000 returning to the country over the last two decades.
Official statistics show that government scholarships have allowed 26,658 Chinese to go and study overseas since 1996, and 97 percent of them returned to China after completing study.
Most students go to top notch universities and research institutes in the United States, Great Britain, Germany, Australia and Canada.
Striking tire workers lose cool and present case to customers
December 18th, 2006STRIKING union members battling Goodyear Tire & Rubber Co took their picket lines to about 150 tire retailers in the United States and Canada on Saturday.
They decided to take their case over health care and retirement benefits directly to consumers.
In Lincoln, Nebraska, 50 United Steelworkers' members protested at two Goodyear retailers, decrying the company's use of replacement workers during the two-month strike.
"We know what it takes to build tires, and unskilled workers just can't do it," said Gary Schaefer, 54, vice president of the United Steelworkers' Local 286 in Lincoln. "We do not want the general public riding their lives on temporary workers."
Goodyear spokesman Ed Markey said the protests do not affect plans to return to the bargaining table in Pittsburgh today for the first time since talks broke down on November 17.
"Our goal in the negotiations remains the same, and that is to reach a fair agreement that enables us to be competitive and win with our customers," he said.
The company's temporary workers are qualified and received the same training as all new employees, Markey said. "Goodyear will never compromise quality."
About 15,000 workers are on strike at 12 US and four Canadian plants.
Goodyear workers went on strike on October 5 after talks broke down on a new contract.
Since the strike began, Goodyear has been making tires at some of its North American plants with non-union and temporary workers, as well as some managers, and relying on production at its international plants to help supply home customers.
In suburban Pittsburgh, more than 80 people handed out fliers and urged holiday shoppers driving past a Goodyear service center to honk in support of employees.
Leo Gerard, USW international president, said the protests were intended to inform consumers about treatment by Goodyear, including plans to slash health care and retirement benefits.
Wall St chief wins US$40m bonus
December 18th, 2006MORGAN Stanley has given Chief Executive Officer John Mack the biggest bonus for the head of a Wall Street firm, awarding him US$40 million as the company headed for the best profit in its 71-year history.
Mack, 62, was granted shares valued at US$36.2 million, and about US$4 million in options to buy Morgan Stanley shares, Bloomberg News reported yesterday.
Seven other top executives in the company were given bonuses of more than US$57 million.
The payout for Mack, 44 percent more than Morgan Stanley awarded him last year, eclipses the US$38.3 million given in 2005 to Henry Paulson, CEO of Goldman Sachs Group Inc.
Shares in Morgan Stanley, the second-biggest United States securities firm by market value, are recording their best year for investors since 2003 after Mack put the firm on course for record earnings.
"You expect performance to be reflected in the compensation," said Laura Thatcher, an Atlanta-based partner in charge of the executive-compensation practice at law firm Alston & Bird.
"You're talking about staggeringly big companies with huge market caps and huge performance."
Shares of Morgan Stanley have gained 40 percent this year and closed yesterday at US$79.60, giving the company a market value of US$84.2 billion.
The firm may report next week that full-year profit rose 41 percent to US$6.98 billion, the average estimate in a Bloomberg survey of 10 analysts.
Mack, who's also chairman, received his entire bonus in stock and options, Morgan Stanley said. Last year, he declined a US$28 million bonus because he had worked at Morgan Stanley for only five months.
He accepted a pro-rata payout of US$11.5 million in stock and also received a US$337,534 salary.
Lehman Brothers, the fourth-biggest US securities firm, earlier this week said Chief Executive Richard Fuld received US$10.9 million in stock for 2006, down from US$14.9 million last year.
Mack, who left Morgan Stanley in 2001 when he was president, returned in June 2005 as the board's choice to revive a firm bruised by a battle with dissident shareholders.
Some of Morgan Stanley's top executives, including President Stephan Newhouse and Vikram Pandit, abandoned then-CEO Philip Purcell during the dispute and dozens of other bankers and traders quit.
Since Mack joined, Morgan Stanley has fired more than 1,000 underperforming brokers, made acquisitions to bolster the firm's energy, fixed-income and hedge fund businesses and created new incentives to keep top employees.
About the Job Outlook 2007 Survey
December 15th, 2006The Job Outlook survey is a forecast of hiring intentions of employers as they relate to new college graduates. Each year, the National Association of Colleges and Employers (NACE) surveys its employer members about their hiring plans and other employment-related issues.
From mid-August through October 4, 2006, NACE collected data for the Job Outlook 2007 survey. The survey was provided to 1,137 members; there were a total of 267 usable surveys, a 23.5 percent response rate. This report focuses largely on the results of that survey.
Of those responding, 52.4 percent were service sector employers, 37.8 percent were manufacturers, and 9.7 percent were government/nonprofit employers. In addition, 38.6 percent of respondents were from the South, 25.5 percent were from the Midwest, 21.7 percent were from the Northeast, and the remaining 14.2 percent were from the West.
Job Outlook 2007 Spring Update (data collected late March through early April) will offer a final update on hiring for 2006-07 graduates. Results will be available in mid-April.
Rates may rise as jobless falls
December 14th, 2006UK unemployment unexpectedly fell in November by the most in almost two years and wage growth accelerated, adding to the case for higher interest rates, the statistics office said yesterday.
The number of Britons claiming jobless benefits fell by 5,700 to 950,800, the biggest drop since January 2005, the Office for National Statistics said in London. Economists expected unemployment claims to rise by 4,000, according to the median estimate in a Bloomberg survey of 30 economists. The claimant count rate of unemployment was unchanged at three percent, Bloomberg News said.
Falling unemployment and bigger wage gains may add to concern that workers will boost pay demands at talks starting next month. Inflation quickened to the fastest pace in at least nine years last month, prompting investors to raise bets on the Bank of England raising interest rates next year.
"The labor market is rebounding strongly and that points to wages picking up," said Raj Gunaratna, an economist at 4Cast Ltd, a research group in London. "The report gives the Bank of England more reasons to hike interest rates."
The pound and interest-rate futures rose on speculation that the central bank will raise its benchmark rate again next year after two increases since August to five percent, a five-year high.
Higher energy bills pushed consumer prices up an annual 2.7 percent in November, the most since the index was introduced in January 1997, the statistics office said.
Wages growth excluding bonuses rebounded to an annual 3.8 percent from August through October from the 3.5 percent gain in the previous period, which was the slowest since July 2003.
UK employees at Ford Motor Co and Rolls Royce Plc, as well as air traffic controllers, are set to receive pay increases of more than four percent, said Ken Mulkearn, the editor of Incomes Data Services.
About 4,200 people working for financial-services companies and law firms in London will get bonuses of more than one million pounds (US$1.97 million) this year, according to the Centre for Economics and Business Research.
Still, an influx of migrant workers and rising unemployment have kept a lid on workers' average pay so far. Around half a million immigrants came to the UK from Eastern Europe last year, keeping wages "subdued," and damping consumer prices, Deputy Governor Rachel Lomax said.
MySpace tops Yahoo for first time
December 14th, 2006NEW YORK (AP) -- The online hangout MySpace got even more popular in November, beating Yahoo in Web traffic for the first time, a research company said Tuesday.
News Corp.'s MySpace recorded 38.7 billion U.S. page views last month, compared with 38.1 billion for Yahoo Inc., according to comScore Media Metrix. MySpace's growth was 2 percent over October and triple the 12.5 billion recorded in November 2005.
The numbers underscore the rapid rise of a social-networking site that encourages visitors to stay and make friends through free tools for messaging, sharing photos and creating personal pages known as profiles.
ComScore warned, however, that a one-month change could represent an aberration. Furthermore, Yahoo's page views could be diminished by the company's growing use of Ajax technology for maps, e-mail and other services.
Ajax is a set of tools that speeds up Web applications by summoning snippets of data as needed instead of pulling entire Web pages over and over.
Yahoo, which last week announced a major reorganization after finding itself repeatedly beat in advertising sales by rival Google Inc., still remains the leader in unique audience, with 130 million visitors in November. (Full story)
"Yahoo continues to be the overall Web audience leader with the largest number of unique users and most time spent online. The page view change in November is related to the use of Ajax and other Web 2.0 technologies across the Yahoo network," Yahoo spokeswoman Nissa Anklesaria said Tuesday.
"These technologies enhance the overall user experience, but do not either generate a page view or qualify to be counted as a page view while the user is engaged with the product," she said,
Fox Interactive Media ranked sixth at 73.8 million, including 57.2 million for MySpace. Unique audience is a measure of how many people visit in any given month; page views reflect how often they come back and how long they stay.
Including other Fox properties such as IGN Entertainment Inc., comScore said Fox had 39.5 billion page views in November. In a statement, Peter Levinsohn, president of Fox Interactive Media, credited strong traffic at game site IGN.com due to the release of Sony Corp.'s PlayStation 3 and Nintendo Co.'s Wii video game consoles.
ComScore had planned to release the numbers Wednesday or Thursday, but word of the figures leaked in an analyst report from UBS Investment Research.
Citigroup appoints a new COO charged to slash costs
December 13th, 2006CITIGROUP yesterday promoted Robert Druskin to chief operating officer and told him to cut costs at the world's largest financial-services company.
Druskin's job will be to "make sure we have the most efficient and effective operations in the business," Chief Executive Officer Charles Prince said yesterday.
Citigroup's operating costs rose 13 percent in the first nine months of this year, Bloomberg news reported yesterday.
Druskin, 59, will remain head of the corporate and investment banking unit, and join Prince and former United States Treasury Secretary Robert Rubin in the chairman's office.
Prince is under pressure to increase Citigroup's stock price as shareholders, including Saudi Prince Alwaleed bin Talal, demand that he take steps to revive earnings growth.
Speculation mounted last week that New York-based Citigroup would break itself up or that Chief Financial Officer Sallie Krawcheck would leave, suggestions Prince dismissed as baseless.
"The market is looking for a lot of things at Citi, one of them was a spinoff of the businesses," said Anton Schutz, president of Mendon Capital Advisors, who manages US$270 million and doesn't own Citigroup shares.
"The market was looking for a whole lot more" than Druskin's promotion, he said.
Prince ruled out a breakup and said no more changes were planned.
Shares trail
Citigroup's stock rose US$1.03 yesterday to US$52.88 in New York Stock Exchange composite trading before the management change was announced.
Shares of Citigroup are up 9 percent this year, trailing the 20 percent advance of JPMorgan Chase & Co and Bank of America's 14 percent gain.
Druskin has previously served as Prince's deputy, and helped former CEO Sanford Weill integrate many of the more than 100 acquisitions that went into building Citigroup, Schutz said.
Druskin will be Citigroup's first COO since Robert Willumstad resigned in July 2005.
Citigroup's 5 percent increase in revenue was outpaced operating costs, which swelled to US$38.1 billion in the first nine months of 2006.
Daily economic round-up
December 12th, 2006The strength in the pipeline of the economy and the growing lack of skills required by employers is seen in the starting salaries for new graduates which are now said to be their best since the tech-boom period that ended in about 2000. The Australian Graduate Employers¡¯ 2007 survey reveals that vacancies have risen nearly 14 per cent compared to last year with median salaries climbing from $43,000 to $45,700 for 2007.
The Graduates Careers Australia research shows that just over 40 per cent of employers wanted to hire more graduates if they were available and just over half of those surveyed reported trouble recruiting in particular fields. About 23 per cent of companies had problems recruiting in the IT sector and about 19 per cent had problems finding graduates in mathematics, statistics and science.
Today Australia will continue talks with China on removing foreign equity restrictions on the legal, banking, insurance and education professions as part of ongoing free-trade talks. While Australia is attempting to protect the clothing, footwear and textiles industries and to improve the situation for the agricultural and services industries, China has called these industries sensitive.
Peter Bell
China might become US's 3rd largest export market in '07
December 12th, 2006Chinanews, Washington, Dec. 11 - Vice Minister of Commerce Ma Xiuhong recently said that if Sino-US trade could maintain the current growing momentum, China is expected to become the third largest export market for the United States next year.
She made the statement when delivering a speech in Washington last Thursday in her visit to the United States.
Since China established diplomatic ties with the United States 27 years ago, bilateral trade between the two countries has undergone fundamental changes and cooperation between the two countries has expanded to every part of the economic field. China and the United States have forged a pattern characterized by economic interdependence and mutual benefit, seeking win-win outcomes and mutual development. Over the past 27 years, Sino-US trade volume has increased 86-fold, with the United States now becoming China¡¯s second largest trade partner and China the third largest trade partner of the US, she said.
Since China joined the World Trade Organization five years ago, US export to China has witnessed the most rapid growth. During this time, US export trade volume to China has grown at an annual rate 4.9 times that of US export growth rates to other countries. In 2005, US export to China increased by 118% compared with 2001, far exceeding its export growth rates to other major export markets. In 2001, China was the ninth biggest export market of the US, whereas in 2005, it already became the fourth largest export market of the US. China has become an important market pushing up the overall export trade volume of the US. During the first ten months of this year, US export to China reached nearly 50 billion US dollars, exceeding the total amount of last year and increasing by 24% from the same period last year, the vice minister noted.
GLOBAL INVESTMENT UPDATE: China Career Builder Corp. Announces Completion of Reverse Merger
December 8th, 2006VANCOUVER, BC -- (MARKET WIRE) -- December 07, 2006 -- Global Developments, Inc. (PINKSHEETS: GBDP), a publicly traded venture capital company, is pleased to provide the following update with respect to China Career Builder Corp., a human resources services company headquartered in Hong Kong, in which Global holds an equity stake.
China Career Builder Corp. (PINKSHEETS: CCBX) announced today that it has completed its reverse merger with Crescott Inc., a publicly traded company incorporated in the state of Delaware, and trading on the over-the-counter Pink Sheets. As a result of the reverse merger, the company changed its name from Crescott Inc. to China Career Builder Corp. and was issued a new trading symbol.
The National Association of Security Dealers (NASD), the regulatory organization responsible for the operation and regulation of the NASDAQ and OTC stock markets, published on November 16, 2006, the name change to China Career Builder Corp. and that it had issued CCBX as its trading symbol.
About China Career Builder Corp.
China Career Builder Corp. is a human resource services company, focused on various industries in Hong Kong and Mainland China. The company provides recruitment services focusing on the professional, management, clerical, administrative, and industrial market in Greater China. Its services include screening, recruiting, training, workforce deployment, loss prevention and safety training, pre-employment testing and assessment, background searches, compensation program design, customized personnel management reports, job profiling, description, application, turnover tracking and analysis, opinion surveys and follow-up analysis, exit interviews and follow-up analysis, and management development skills workshops. The company markets its recruitment services through a combination of direct sales, telemarketing, trade shows, and advertising.
About Global Developments
Global Developments, Inc. is a publicly traded venture capital company. It was formed to create a unique investment vehicle representing a growing portfolio of innovative and emerging growth-oriented companies. Global acquires its portfolio companies either as wholly or partially owned subsidiaries, or as an investment where Global is the lead investor. As a result, Global maintains substantial management and operational control, thereby giving it the ability to provide significant oversight and guidance in building value and creating liquidity events for its shareholders. Global invests in companies with solid management, operational excellence, and the potential to grow substantial revenue streams.
Please visit http://www.globaldevelopmentsinc.com for more information.
Forward-Looking Statements
You should not place undue reliance on forward-looking statements in this press release. This press release contains forward-looking statements that involve risks and uncertainties. Words such as ``will,'' ``anticipates,'' ``believes,'' ``plans,'' ``goal,'' ``expects,'' ``future,'' ``intends,'' and similar expressions are used to identify these forward-looking statements. Actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including the risks we face as described in this press release. For further information about Global Developments, Inc. please refer to its Web site at http://www.globaldevelopmentsinc.com.
US initial jobless claims decline from 13-month high
December 8th, 2006THE number of US workers filing first-time applications for state unemployment benefits fell last week from a 13-month high that was inflated by end-of-year seasonal adjustments, the Labor Department said yesterday.
Initial jobless claims fell by 34,000 to 324,000 in the week that ended on December 2 from 358,000 the prior week, the department said in Washington, according to Bloomberg News. The four-week moving average, a less volatile measure, rose to 328,750, the highest since May, from 325,250.
Claims from the prior week, which included Thanksgiving Day, were distorted by seasonal adjustments that cause wide fluctuations in weekly figures at this time of year, a department spokesman said. Attention will now turn to today's report on November payrolls, which may show job growth remained below the average for the year, according to a Bloomberg survey.
"Most of the jump in claims in the prior week was due to a seasonal adjustment problem around the Thanksgiving holiday," Mike Englund, chief US economist at Action Economics LLC in Boulder, Colorado, said before the report. "Most of that gain was reversed this week. Data suggest some downside risk for payrolls."
A Bloomberg survey of 40 economists forecast claims would decline to 325,000 from an originally reported 357,000. Economist estimates ranged from 300,000 to 350,000.
The number of people continuing to collect state jobless benefits rose to 2.524 million in the week that ended on November 25, the highest since January, from 2.467 million in the prior week. The unemployment rate among people eligible for benefits, which tends to track the US jobless rate, held at 1.9 percent.
Forty states and territories reported a decrease in new claims, while 12 reported an increase and one had no change, the department said. Those numbers are reported with a one-week lag.
Initial jobless claims, which reflect firings, usually increase with slowing job growth, which is measured by the US government's monthly report on non-farm payrolls.
Still, as fewer women seek jobs and the population ages, the labor market remains tight. The unemployment rate was 4.4 percent in October, a five-year low, and workers' average hourly earnings rose 3.9 percent from October 2005, close to September's five-year high of 4.1 percent.
Some companies continue to hire to boost output or introduce new products.
Electric Boat Corp, a unit of General Dynamics Corp and the primary contractor on the US Navy's Virginia-class nuclear submarine, plans to hire about 200 engineers this year to work on advanced submarine concepts, said Robert Hamilton, spokesman for the Connecticut-based manufacturer of nuclear submarines .
PepsiAmericas to cut jobs
December 8th, 2006SOFT drink bottler PepsiAmericas Inc said it plans to reorganize its field sales and delivery network in the United States as part of a realignment estimated to result in charges of US$18 million.
Sara Zawoyski, vice president of investor relations, said most of that money would go toward relocations, and some field operations will be centralized in Schaumburg, Illinois, where the company's operating headquarters are based. While PepsiAmericas is officially based in Minneapolis, its executive office is small.
PepsiAmericas is the world's second-biggest producer, seller and distributor of PepsiCo beverages. It has operations in 19 US states, Central Europe and the Caribbean.
While Zawoyski declined to give a head count on the job reductions, she said it would be less than one percent of the company's US work force, she said which is now around 12,000 to 13,000, and that they would be scattered across the country. Worldwide, PepsiAmericas employs about 16,000 people, she said.
The US$18 million charge will consist of severance and other employee-related costs. About US$12 million of the charge will be recorded during the fourth quarter
Bank regulator issues reform guidelines
December 7th, 2006Dec.7 - China's banking regulator issued guidelines Wednesday to encourage financial innovation by commercial lenders, such as increasing earnings made from fees and giving out less risky loans.
The guidelines will take effect next Monday, the day China will fully open its banking sector to foreign lenders in line with its commitment to the World Trade Organization.
According to Tang Shuangning, vice-chairman of the China Banking Regulatory Commission (CBRC), China's banking industry urgently needs to speed up its financial reform to deal with rising competition after fully opening.
"Chinese commercial banks lag far behind their international counterparts in terms of financial innovation," Tang said.
He said non-interest income generally accounts for more than 50 per cent of the total income of big international banks. But the highest rate for Chinese commercial banks from fees is less than 30 per cent and most of banks earn less than 10 per cent.
He said the guidelines are the first such document concerning financial innovation issued by the banking regulator, signalling a new stage of reform.
According to the guidelines, the CBRC will set up a sound legal environment to encourage financial innovation. The regulator will further streamline approval procedures and strengthen supervision to facilitate financial innovation.
The guidelines also emphasize the importance of risk control. They require commercial banks have a good knowledge of their businesses, risks, clients and competitors.
In addition, the guidelines clarify commercial banks' obligations to consumers, such as correct disclosure of information, professional services, protection of assets, and offering effective complaint channels.
Despite this need for reform, Tang said, commercial banks in China have made progress in financial innovation.
The CBRC's statistics show the trading volume of major commercial banks reached 14 trillion yuan (US$1.77 trillion) last year.
Nearly 30 Chinese banks offer renminbi wealth management services, with a total value of 130 billion yuan (US$16.46 billion).
A total of 17 foreign and Chinese banks have been approved to invest clients' assets overseas under the qualified domestic institutional investor (QDII) programme. So far, they have launched nine QDII products, with sales of 2.3 billion yuan (US$291 million) in renminbi and US$87 million in US dollars.
But more financial innovations need to be made, Tang said.
In addition to financial reform, commercial banks are being asked to engage in public education, informing investors that they should be responsible for their own purchasing decisions.
At yesterday's press conference Tang also said the Bank of Communications and China Construction Bank have applied to establish insurance companies.
China largely silent on telecom strategy
December 6th, 2006HONG KONG -- If the world's telecommunications executives thought that bringing their industry's biggest trade show to China would spur Chinese officials into opening their vast market, they were wrong -- at least so far.
Government officials have avoided using the ITU Telecom World 2006 conference in Hong Kong this week to say when they would allow next-generation mobile phone networks to enter the country.
With third-generation services slow to take off in Europe and the United States, telecommunications suppliers have been counting on China to provide a major lift, and most say that they are ready to jump in whenever so-called 3G network building begins in earnest on the Chinese mainland. But, so far, the industry has encountered only delays and postponements.
At the opening ceremony for the conference on Sunday and again Monday, Chinese leaders declined to announce a timetable. Three important decisions remain: which technology China will select, which mobile phone operators will get the licenses, and when. "China will consider three standards for 3G," Wang Xudong, the minister for the information industry, said Monday. "The timing for issuing 3G licenses will be determined by the market."
With India and China together adding more than 12 million cellphone subscribers a month, the two countries are the fastest-growing markets for conventional networks. These networks are good for voice calls, but too slow to allow subscribers a comfortable experience surfing the "mobile Internet" on a cellphone.
With present-day mobile phone use reaching a saturation point in many industrial economies, telecommunications supply executives can seem almost wistful about the potential for 3G networks in China, a $26 billion market for such systems.
"This is for the government to decide, but there's no negative," said Frederic Rose, president of the Asia-Pacific region for the newly merged Alcatel- Lucent.
His boss, Patricia F. Russo, and the chief executives of Ericsson, Motorola and Nortel Networks are among those meeting here with clients, suppliers and Chinese officials. But China has shown a preference for developing and choosing its own standards, and if it does so in this case, some Western companies may be left out.
The European version of 3G is called W-CDMA, a technology with the backing of Nokia and Ericsson; one used by some American carriers is called CDMA 1000x; and China's is called TD-SCDMA. Technically, they are related, but there is little consensus on differences in quality.
"I expect we will get some clarity by summer," Mr. Rose said. "We expect there will be 3G networks operational in the main cities for the Olympics in September 2008."
Alcatel-Lucent gets about a third of its revenue from the Asia-Pacific region. Mr. Rose said the company was buffered in two ways from the impact of a decision about a 3G standard. First, it is actively investing in the second-generation business, which is still growing in China.
Second, Alcatel-Lucent is prepared to jump into any of the three standards.
Its TD-SCDMA equipment, through its Shanghai Bell joint venture with Datang Communications of China, is already being used in pilot networks in the country. And since Datang owns most of the TD-SCDMA intellectual property, Alcatel-Lucent would generally not pay royalty fees to use it. (Datang is also working with Siemens.)
In addition, Alcatel-Lucent makes W-CDMA equipment for the European market. And the merger of Alcatel and Lucent Technologies brought to the combined company Lucent's expertise in CDMA.
Chinese manufacturers are also ready. ZTE and Huawei are among the biggest pushing for the TD-SCDMA standard, and they, too, make equipment for the competing standards. They would also be eager to see companies like Nokia and Motorola give up their dominance of the second-generation network business in China.
Samsung of South Korea would like a piece of the action, as well. "We are ready to enter that market, whether it is TD-SCDMA or W-CDMA -- whatever the standard," said Jeong Han Kim, senior vice president for Samsung Electronics' telecommunication network business. "We will be a major player in that area," he said, citing two factories that Samsung has on the mainland.
Although 3G phone services like videoconferencing, Internet browsing and TV viewing may be more expensive than most Chinese can afford, Mr. Jeong said that "China has very big potential, so it will grow very fast."
After three years of waiting, the telecommunications industry is still speculating. But there is one thing that companies can bank on, Mr. Rose said.
"There's no fear that 3G won't happen in China."
New Monster Product Aimed at Franchisee Hiring Headaches
December 6th, 2006New Monster Product Aimed at Franchisee Hiring Headaches
A job-posting process that often hampers hiring for companies with franchises spread across the country could be getting a makeover if Monster gets its way.
Monster is launching its National Account Suite, which seeks to streamline the recruitment process and quell the push and pull that often exists between corporate headquarters and franchisees, says Mike Madden, the company¡¯s senior vice president of product.
The suite makes use of existing technology to the meet the recruitment needs of specific employers, says Peter Weddle, CEO of Weddle¡¯s, a research firm and consultancy in Stamford, Connecticut. Such customization is the wave of the future, he says.
"This product spells the next evolution of online recruitment services," he says. "Companies will be tailoring technology to better meet the needs of their recruiting clients."
Essentially, Monster is mimicking something newspapers created over time. As papers evolved, they developed classified advertisement products that cater to specific industries, such as real estate and automobiles, Weddle explains.
Monster, which launched its suite in November, believes there will be significant interest from clients because it is the only product of its kind in the industry, Madden says.
"There are about 2 million franchise businesses in the U.S.," he says. "It would be great if we could get 30 to 50 percent of that market."
Monster¡¯s product aims to reduce recruitment gridlock. Though each company differs in its policies, the job-posting process generally is slowed because hiring managers at franchise sites must get approval from corporate headquarters each time they want to post an opening.
Often, headquarters will contend that it¡¯s a necessary step to control recruitment expenses. Local hiring managers have complained that the process is cumbersome, time-consuming and ineffective, particularly in industries where turnover is high, like chain restaurants.
Monster¡¯s new product offers a compromise. Franchisee hiring managers will no longer have to seek approval from corporate headquarters before posting a job. That will enable them to more easily hire the help they need. Corporate headquarters, meanwhile, don¡¯t have to worry about overspending at the franchise level because the price of the subscription has been pre-negotiated.
The subscription, typically lasting a year, gives local hiring managers access to self-service tools that let them control the content and the frequency of job postings. Customizing the ads at the local level is important because hiring managers can use language that resonates with the community in which they are trying to hire, Madden explains. The entry base price is $800 to $1,000 for a year¡¯s subscription, he says.
Local managers will be able to quickly post a job opening, even proactively managing future needs in the workforce pipeline. Posting a job can take 24 to 48 hours, compared with a week or more with the traditional checks and balances.
Fastest Growing Technology Companies by Hiring
December 5th, 2006For those who are looking for a new position in information technology, here are the 10 employers who hired the most high tech people in 2006:
1. Merge Healthcare
2. Clinical Data
3. CalAmp
4. Adobe Systems
5. Secure Computing
6. ValueClick
7. Cognizant Technology Solutions
8. eBay
9. J2 Global Communications
10. OmniVision
Source: http://money.cnn.com/magazines/business2/b2fastestgrowing/
China plans to open wider in science, technology
December 4th, 2006Dec.4 - China on Sunday issued a five-year program (2006-2010) on international cooperation of science and technology, promising to open wider to foreign partners.
The program said except those concerning national security or with special requests, China's key national scientific and technological projects and funds will be open to overseas partners.
Scientific institutions, universities and key national laboratories are required to expand cooperation and exchanges with foreign counterparts, according to the program.
China will also encourage and help enterprises and research institutions to set up overseas research and development agencies for further development by "using international scientific and technology resources", the program says.
Meanwhile, China will "actively" participate in key international scientific projects, join international scientific organizations and encourage Chinese scientists to work in international organizations, the program says.
It says the moves are aimed at increasing China's possession of or its reasonable share of intellectual property rights internationally and improving its status on the world science arena.
China also hopes to bolster its high-tech industry and boost export of its high-tech products through such cooperation.
The program listed a number of areas as priorities for cooperation, including clean energy development, environmental protection, HIV/AIDS treatment, responses to newly occurred infectious diseases and chronic diseases, nanoscience and aeronautic and astronautic technology.
Small and medium enterprises have contributed to 70% of China's import/export
December 4th, 2006Chinanews, Beijing, Dec. 2 - China Small and Medium Enterprise Index of Economic Development 2005(SMEI) was released on November 28, 2006, which indicates that small and medium enterprises have taken up 99.6% of China's enterprises in quantity (including small private businesses), and they have contributed to 70% of the country's export and import.
Small and medium enterprises have become important boosters to China's economic growth, and they have contributed to about 59% of China's GDP, and taken up about 60% of the domestic market, as well as 48.2% of the total tax revenue, not to mention that they have also provided 75% of job opportunities in towns and cities in China.
Maximum cap for pay rises in state firms cut
December 4th, 2006CHINA has cut the maximum allowed margin of wage rises in state-owned companies for this year to keep pay growth, especially in monopolistic sectors.
State enterprises which paid employees twice as much as the average level of local urban wages in 2005 can increase total pay not more than 0.6 percent for each percentage of profit growth this year, according to a circular on the Website of the Ministry of Labor and Social Security late on Wednesday. The original cap was 0.75 percent.
The ministry said the government will stringently inspect the linkage between corporate profits and wage payments in state-owned companies where wages are too high and increasing too fast.
"Such a link-up mechanism is of great importance to help create a healthy relationship between growth in wages and profits," the circular said.
The adjustment came amid a backdrop of intense public calls, starting in the second half of this year, for a wage reform in state firms where employees are considered outrageously overpaid than the average worker, widening the gap between the rich and poor segments of society.
"The latest move is a step forward to increase state control in reining in wage growth," said Hou Ning, a columnist for several business newspapers. "But I think there is still a long way to go."
Workers in state companies, typically in highly regulated industries such as telecommunications, energy and tobacco, usually earn much more than they deserve based on the profit they produce.
The monopolistic nature generates complacency resulting in these state firms operating at lower efficiency than global counterparts, thanks to competition. State firms are accused of contributing lower profit while holding a huge amount of state assets and reserves.
Several reports and surveys have indicated average wage for employees in monopolistic industries is up to three times the national average. The gap could be widened to as much as 10 fold if non-wage income like bonuses and pensions are included.
Next stop China for rail jobs
December 1st, 2006THE next generation of trains for Sydney's rail system will be built by a Chinese company with little experience delivering passenger trains to a developed country, a move that will cost hundreds of jobs in the Hunter region.
The Premier, Morris Iemma, made no mention of the Changchun Railway Vehicle Company a fortnight ago when he awarded a $3.6 billion order for 626 rail cars to a consortium headed by the maker of CityRail's Millennium Trains, Downer EDI Rail.
The Reliance Rail consortium said at the time the experience of EDI in building and maintaining the Millennium Train was a "key plank" in securing Australia's largest-ever train order.
But EDI will only be responsible for the design and the final fit-out of the double-decker carriages, to be imported from China. Their electronics will be provided by the Japanese company Hitachi.
Changchun boasts on its website the "great progress" it has made in the international rail market, referring to Iran, Pakistan and Zimbabwe as its notable export success stories. Its carriages also operate in the North Korean capital, Pyongyang.
The 626 carriages in the contract are due to enter the Sydney rail network between 2010 and 2013. They will also replace 498 carriages in the existing fleet.
The Minister for Transport and Deputy Premier, John Watkins, said the Reliance bid provided a superior train at better value for money, "making it a clear winner".
The Australian Manufacturing Workers Union campaigned for the contract to go to two local bidders, EDI or United Goninan. The union's state secretary, Paul Bastian, welcomed the contract going to EDI, but blamed the State Government for requiring only 20 per cent local content. EDI and United, against foreign bidders, had no choice but to look at sourcing some trains from overseas to mount a competitive bid, he said.
EDI says 290 jobs will be created at its Cardiff plant in the Hunter from the contract. However, there is expected to be a net loss of rail-related jobs in the Hunter. United may have to lay off some of the 550 workers at its Newcastle plant.
The NSW director of Australian Industry Group, Mark Goodsell, said the contract required less local content than comparable contracts let by other states.
"There is a risk - a risk to local capacity to build trains and our ability to service them in the future," he said. He warned of flow-on effects to other manufacturing with the loss of skills.
Mr Watkins defended Changchun's quality and reliability. "CRC has significant experience building trains in joint-venture arrangements with major international rolling stock manufacturers, including Alstom, Hitachi, Bombardier and Siemens. It also has significant expertise in stainless steel car body construction and is building 540 stainless steel cars with Bombardier for the Beijing Airport line for the 2008 Olympics."
It was one of few companies that could produce more than 2000 carriages a year.
The Opposition said the project was running late and had blown out from $1.5 billion to $3.6 billion.
Germany sees more job hires
December 1st, 2006GERMAN unemployment fell more than expected in November to the lowest in four years as increased optimism in the economy prompted companies to hire and the warmest fall on record buoyed the construction industry, a government agency said yesterday.
The number of people out of work, adjusted for seasonal swings, fell 86,000 to 4.24 million, the lowest since November 2002, the Nuremberg-based Federal Labor Agency said.
Economists expected a decline of 30,000, according to the median of 34 forecasts in a Bloomberg News survey. The adjusted jobless rate fell to 10.2 percent, a rate last recorded in December 2002.
Maximum cap for pay rises in state firms cut
December 1st, 2006CHINA has cut the maximum allowed margin of wage rises in state-owned companies for this year to keep pay growth, especially in monopolistic sectors.
State enterprises which paid employees twice as much as the average level of local urban wages in 2005 can increase total pay not more than 0.6 percent for each percentage of profit growth this year, according to a circular on the Website of the Ministry of Labor and Social Security late on Wednesday. The original cap was 0.75 percent.
The ministry said the government will stringently inspect the linkage between corporate profits and wage payments in state-owned companies where wages are too high and increasing too fast.
"Such a link-up mechanism is of great importance to help create a healthy relationship between growth in wages and profits," the circular said.
The adjustment came amid a backdrop of intense public calls, starting in the second half of this year, for a wage reform in state firms where employees are considered outrageously overpaid than the average worker, widening the gap between the rich and poor segments of society.
"The latest move is a step forward to increase state control in reining in wage growth," said Hou Ning, a columnist for several business newspapers. "But I think there is still a long way to go."
Workers in state companies, typically in highly regulated industries such as telecommunications, energy and tobacco, usually earn much more than they deserve based on the profit they produce.
The monopolistic nature generates complacency resulting in these state firms operating at lower efficiency than global counterparts, thanks to competition. State firms are accused of contributing lower profit while holding a huge amount of state assets and reserves.
Several reports and surveys have indicated average wage for employees in monopolistic industries is up to three times the national average. The gap could be widened to as much as 10 fold if non-wage income like bonuses and pensions are included.
White-collars' jobs irrelevant to their study fields
November 30th, 2006Chinanews ,Beijing, November 28 ¨C A recent questionnaire survey finds that the jobs of about 80% of white-collar workers in China have nothing or very little to do with the areas of study they were trained for..
Many of them choose a ¡°strange¡± job because they don't like their fields of study. In fact, only 42% of college students get jobs in their own fields. About 26% actually chose the fields of study at the request (or even orders) of their parents. The others were ¡°assigned¡± to major in the areas of study according to the result of the national college entrance examination.
The pressure of the job market also forces many of them to give up their dreams and pick up jobsthey don't like at all. For example, many college graduates have become salespersons not because they have learned sales in colleges or because they enjoy the challenge of being salespersons, but because they have no choice: Salespersons are always needed in a commodity economic society.
China-made Christmas gifts sold to 200 countries
November 29th, 2006Chinanews, Hangzhou, Nov. 28 ¨C Zhejiang's Yiwu has begun to see an increasing export of Christmas gifts this month when Christmas is no longer than a month away and many super markets in Western Countries are busy collecting Christmas products.
From last May to October, actually, there had been 10-million-US-dollar worth of Christmas gifts made in Yiwu exported to more than 200 countries and regions worldwide every month.
These 200 countries and regions, such as the US, Germany, Holland, and Brazil, have made Yiwu as their key channel importing Christmas commodities by this year, according to a chief of the Yiwu office of the Jinhua Customs.
The exported Christmas goods cover not only traditional colorful lamps and wrapping paper, but also many other categories including costumes, toys, and even household appliances, indicating a climbing added value of export.
Yiwu Festival Gifts Co., Ltd. is now running up a set of Christmas products for South Korea. Salesman of the company said it was a temporary order, and the products ordered by many European and American countries have all been turned out and shipped there already.
Halt to job cuts for two years
November 28th, 2006ALLIANZ SE, which earlier this year said it will cut about 5,700 jobs at its German insurance units, has prolonged a block on compulsory layoffs for employees there by two years following negotiations with its workers' council.
Employees won't face compulsory layoffs "at least" until the end of 2009, Allianz said on its Website. The Munich-based insurer confirmed plans to cut 2,479 jobs by the end of next year and to eliminate a further 2,170 jobs through the end of 2008, it said, adding that it had already cut 1,040 jobs by the end of October, Bloomberg News reported.
"Together with the workers' council, we found a solution to better take our employees' interests into account without lowering our sights on our business targets," Gerhard Rupprecht, head of Allianz's German holding Allianz Deutschland AG, said in the statement.
The job cuts will be reached through "mutual agreements with employees," Allianz said. The company also abandoned plans to shut down its office in Cologne, it said.
Ericsson cuts jobs
November 28th, 2006WIRELESS equipment maker LM Ericsson AB said yesterday it will cut up to 400 administrative and sales jobs in Sweden, but many workers will be offered positions with staffing company Manpower Inc.
Ericsson said it expects between 300 and 400 workers will accept a voluntary redundancy offer that includes either a severance package or a job with Manpower as a consultant. The offer will be presented to about 4,600 workers in sales, marketing and administration, most of them in the Stockholm area. The restructuring program is expected to be completed by the end of January.
China's rapid growth contained, NBS
November 27th, 2006Nov. 26 - China's National Bureau of Statistics said government policies are restraining overly rapid economic growth, and no sharp adjustments are needed.
The assessment meshes with recent comments from China's central bank officials and advisers, although they have left open the possibility of more belt-tightening measures if needed.
"Overheating economic growth is being put under control with the decline in the growth of major economic indicators," said statistics bureau spokesman Li Xiaochao, according to Xinhua News Agency.
He cited improvements in data for urban fixed-asset investments, industrial production, money supply and corporate profits as reasons that no drastic policy changes are needed.
A week ago, central bank chief Zhou Xiaochuan said economic indicators suggested overheating was on the decline but added it was too early to declare victory.
"The People's Bank of China can never rule out taking new measures," he told Reuters at a global bankers' meeting.
Fan Gang, an adviser to the bank, has said the central bank may need to raise interest rates again to keep investment in check even though it might face opposition in doing so.
Since late April, the central bank has raised interest rates twice and banks' reserve requirements three times.
A survey of economists by Reuters this month shows most expect growth in China's gross domestic product will tip into single digits in 2007 for the first time in five years, ebbing to 9.5 percent from a projected 10.6 percent this year.
Annual Recruitment Survey will Reveal the State of the Nation
November 27th, 2006
The Recruitment and Employment Confederation (REC) in association with sponsors
Ernst & Young will be unveiling the findings of its Annual Industry Survey at a
breakfast seminar in November.
The event will reveal data on the recruitment industry turnover and also
additional research that will offer new insights into the current state of
recruitment. The latter looks at the key issues facing the industry and examines
current confidence levels and strategies for growth and diversification.
Overviews of the findings and expert views on the major challenges and
opportunities currently facing this dynamic industry will be delivered by
keynote speakers including Brian Wilkinson of Vedior UK.
Commenting on the purpose of the seminar, Roger Tweedy, the REC Director of
Research explained: here is real value in an annual seminar at this time of
year that brings together key metrics and industry experts to assess the state
of the industry. I hope this event will become a key date in recruiter
planning cycles ?
Gordon Cullen, Director at Ernst & Young added: his seminar provides an
excellent opportunity for both Chief Executive Officers and Finance Directors of
the UK top recruitment industries to gain a real understanding into what is
happening within recruiting.
The breakfast seminar is being held at sponsor Ernst &Young More London Place
offices on Friday November 3rd.
For more details about the launch, call Gordon Cullen at Ernst & Young on 020
7951 4611 or gcullen@uk.ey.com.
Recruiter Survey Points to Perfect Storm in 'War for Talent'
November 24th, 2006In 1997 Mc Kinsey's coined the phrase "War for Talent", the following few years were characterised by critical shortages of talent fuelled by economic expansion, the emergence of the dot-com sector, recruitment and expansion in the Technology arena, growth in consulting fortunes and the rise of the service industry. As we entered the era of the "Generation Y" worker there was a shortage of key skills available. Recruitment agencies saw the boom coming, advised clients accordingly. Many client companies struggled to secure the talent required, wages spiralled. Exuberance in packages offered took the war out of reach of many firms. Companies were forced to compromise on talent, those who did not act were weakened and when the exuberance abated in 2001 they suffered further.
International executive recruiters Antal International are calling on all Line Managers & Human Resource professionals to make a diary note for January 2007. A decade on from its origination, Antal predict that 2007 will see the return of the War for Talent, however, there will be some significant differences, according to the results of a survey undertaken by EMEA, CEE & Asia specialists. This time it will be global, affecting all levels of employee and functions, a "Perfect Storm" in talent terms.
Tony Goodwin, Antal's Chairman & CEO stated, "The 1997 War was largely localised, contained within a few skill functions and didn't affect every business sector. Firms were either feeding grounds for the boom enterprises hiring in the late 90's or were trying to stay out front. This time, driven by a number of additional factors, the second war for talent will be truly global and more far-reaching."
A confidential survey Antal undertook of mid to senior executives in firms across diverse markets in Europe, Russia & China shows that 34% would consider a move in 2007 due to increased market confidence and greater awareness of their appreciating market value. When added to expected levels of staff turnover, competitor hiring and those addressing satisfaction issues, the result is expected to be a turnover storm of epic proportions. The Antal survey found that:
Up to 72% of employers forecast more than 12% new job growth in 2007. Alone, this job creation won't start the war, but combined with the other factors, it will exacerbate it.
Recently published data across EMEA & Asia shows that well over a quarter of employees are not fully satisfied and would actively seek a move as evidenced in employee feedback, increased workplace stress and work-life balance issues rising on the agenda.
Companies held the power in the "employer market" of the last five years and some paid less attention to employee motivation, retention, engagement and work-life balance than perhaps they should have.
Salaries stayed relatively flat in recent years and fewer promotion opportunities have been widely available. Many businesses have reported productivity gains against a backdrop of falling morale.
It is much easier today for employees to appraise themselves of their market value and review positions on job boards & corporate sites. Discrete job surfing remains a popular web pastime and can be done without contacting a recruitment consultant until one is ready to step into the "available" zone.
The rise of jobs-by-email functionality on job boards means they don't need to publicise their resume and jobs come to them direct, over 42% of executives regularly received job information by email from online recruitment sources.
Increasing numbers of senior managers have started to leave the workplace and as this generation ages further it will lead to critical shortages of experienced managers, creating an experience gap. Antal's survey found that over 25% of senior managers were considering retirement within five years.
Generation Y workers (born in the 70's to 90's) are increasingly likely to change jobs more often. They have grown up in a world of immediacy and fast change and view a change of employer as a positive way of increasing their worth, advancing careers more quickly. Many see a position lasting up to 2.5 years as sufficient. Average tenure in firms is dropping in the under 30 age ranges.
Picture this - It is early 2007, your own new headcount needs to be filled, as does that of your competitors, employee confidence in the market place grows, they're more comfortable looking externally for opportunity, "job security paralysis" becomes less of a factor and a large section move, some of your senior managers retire or seek more work life balance, your generation Y's begin their quest for the "next best thing" and move on, the best executives have moved early and are already locked-in to new firms, new entrants open in your market trying to attract your talent¡ and what's more, this happens in all your locations.
With recent increased investment in boom markets like Russia, Eastern Europe, China and Latin America, Antal predict that companies wont just be fighting for talent in their domestic market, they will be engaged in a battle on all fronts. Employers will face the same issues of attraction, recruitment, retention, motivation and leadership development in every location they have expanded into around the globe.
Graeme Read, Antal's COO commented, "Over the last decade, firms have internationalised far more than ever before, sourcing and production has moved to different countries such as China or Eastern Europe, massive new B2B and consumer markets have opened in emerging markets like Latin America and China. All this leads companies to expand sales and operations internationally to tap this lucrative market opportunity and often the easiest route into a new market for others is to target experienced people at competitor firms, buying in valuable local knowledge and experience."
He added, "In 2007, the cost imperative of globalisation and the faster pace of opening operations internationally will further the boom in emerging markets. FDI, new office and manufacturing facility openings are set to grow exponentially in 2007, fuelling the storm in even remote locations."
Alongside the survey, Antal polled a selected number of clients in its key markets to see how they are preparing to head off the storm. Some areas highlighted by those taking action include:
• An increase in availability of remote access allowing staff to work remotely on selected days.
• More use of "golden handcuffs" to lock in top talent and more benchmarking of salaries to market.
• A sharper focus on the individual, identifying and nurturing "Rising Stars" in every corner of their global businesses.
• Greater use of recruitment technology and web sourcing and more use of diverse sourcing methodologies.
As salaries and packages start to rise and talent pools dry up, companies are turning to flexible workers and an increased use of contractors in IT, Accountancy, HR and Marketing is envisaged in many markets.
Firms focus more on the core aspects of the business, outsourcing non-core activities in areas like IT, Call Centres, Customer Service, Recruitment, Media Management.
Far more focus on retention, with increased line manager input and reworked retention plans.
Greater emphasis on the "sell" of the company and opportunity to potential employees at interview.
More HR time spent on areas like Talent Development, Leadership Development, and Compensation & Benefits with less focus on administrative tasks.
Early search activity - many firms are starting to look for talent now - acting before the market heats up, enabling the best.
A reader's toolbox:
Thanks to new modalities in cisco certification, now anyone can go for E20-001 as well as ccna. Previous credits like mcse as well as network+ also matter. In microsoft certification, every minute detail matters.
China Begins Annual Recruitment Drive for University Graduates
November 23rd, 2006China's Ministry of Personnel on Saturday began its annual national employment service for millions of university graduates, with more than 480,000 positions up for grabs online and at job fairs around the country.
A total of 121 local human resources departments and job service websites and 26,000 employment units will take part in 126 job fairs across the country including those held over the Internet.
Employment experts will be invited to university campuses and job fairs to offer job seeking tips to students due to graduate next July.
According to the ministry, the most sought-after positions are in marketing, administration, computer science, machinery, architecture, finance, chemistry, human resources, foreign languages and medicine.
Statistics show that 4.13 million students graduated from higher education institutions this year, 750,000 more than last year.
About 1.24 million Chinese college students will graduate next year without immediate job offers.
The ministry encourages university graduates to work in the rural areas in West China region with favorable policies such as guaranteed salaries and medical care, and subsidies for those who go to undeveloped and remote rural areas,
Statistics show China is facing a severe employment crisis with 34.5 million people expected to come on to the labor market from 2006 to 2010.
About 25 million new job-seekers would enter the market this year, of whom 11 million might find jobs in the urban areas, leaving 14 million unemployed.
The unemployed in China are mainly composed by laid-off workers, college graduates, redundant rural laborers and those returned from overseas study, or "haigui" which means a "sea turtle" -- a Chinese pun for overseas returnees.
A random sample survey of 1,500 Chinese returned from recent overseas study shows that more than 35 percent of them have employment problems, said Lin Zeyan, researcher with the human resources study training center of the Development Research Center of the State Council.
Lin said their job difficulties are mainly resulted from their high expectations of salaries as they want their huge overseas educational investment pay off by finding a "lucrative" job.
(Xinhua News Agency November 20, 2006)
China's Proposed Labor Reforms Spark Controversy and Hope in US
November 23rd, 2006Proposed revisions to China's labor laws, presented for discussion at this December's 19th Conference of the 10th Standing Committee of the National People's Congress, are stirring controversy among labor and business groups in the US.
The AFL-CIO described as "duplicitous" a campaign led by US corporations to convince the Chinese government to block the labor reform measures. The labor federation argued that the reforms are needed to protect workers' rights, and submitted a supporting petition to the Office of the US Trade Representative, a Bush-administration-appointed agency.
Meanwhile, a report published by the think tank Global Labor Strategies points out that US-based corporations and their lobbying arms are opposing the law and even threatening to pull their investments out of China.
The corporations involved include Wal-Mart, which incidentally conceded just recently to Chinese trade union organizing efforts, Nike, Microsoft, AT&T, the American Chamber of Commerce in Shanghai, the US-China Business Council, and others. European-based business associations have lodged similar complaints as well.
Because the reforms would force foreign employers in China to recognize the legal rights of their employees, these corporate interests have viewed the proposals negatively and even actively engaged in China's national dialog on the matter.
What's in the New Labor Law?
The proposed reforms would provide a means to regulate and standardize industrial relations across different sectors in the Chinese economy. While China adopted a contract labor law in 1994 to protect workers, tens of millions continue to be employed without such protections.
During a recent visit to Washington, China's Social Security Minister, Tian Chengping, said the reforms are needed "to improve the dispute-resolution system and supervision mechanism for labor relations."
The reforms would codify the rights and obligations of employers and workers, and are generally seen as having the potential to strengthen the rights of workers and protect their interests.
The proposed reforms were presented to the Chinese public earlier this year for discussion and response. According to Chinese media reports, almost 200,000 workers and other interested parties provided their opinions on the proposals. The All-China Federation of Trade Unions (ACFTU), China's central labor federation, has participated in the process by exchanging recommendations with the government body that authored the proposals. Many ACFTU ideas were included in this draft of the reforms.
The key elements of the reforms focus on contract labor and include, among others, the following regulations. One measure would impose a limitation on the probationary period for contract workers and would prevent employers from hiring workers for only short periods, and releasing them before the terms of their contract had been fully met. It is a regulation that would reduce abuse and ensure greater job security.
A second proposal would require employers to provide severance pay after the termination of a contract. This reform would protect workers by ensuring economic stability between jobs and also would encourage employers to provide longer-term contracts.
In the event of a large-scale termination of more than 50 contracts, the employer would have to meet with the trade union, explain its reasons for terminating the contracts, and negotiate over compensation and other conditions.
Where contracts with employees do not exist, the proposal would create legal provisions that would actively encourage employers to provide them and thus extend rights and benefits to workers. Indeed, if employers do not do so, the law would recognize the employer-employee relationship as a de facto long-term contract.
The reforms also give the ACFTU and workers' representatives the authority to participate in the creation of new work conditions put forward by employers. Additionally, the unions would be authorized to collectively bargain and sign contracts for larger groups of contract workers.
For example, in some sections of China's construction industry, large numbers of workers are employed in the contract labor system. Contract labor forces them to deal with the employer on a one-on-one basis and increases the likelihood of their being exploited. This reform proposal would make contracts fairer and increase workers' bargaining power to improve wages, benefits, and working conditions.
The reforms would also restrict the common practice of turning a company's own contracted labor over to third party employers. Currently, an employer can force a contracted employee to work for another employer. The new law would limit this practice to certain sectors, limit the time frame, or require that a new contract be drawn up between the new employer and the employee.
The proposed reforms also provide a more even playing field for workers when they disagree on the meaning of the terms of a contract. In fact, in most cases, the law would require arbitrators to side with workers in these disputes, encouraging an employer to make the terms of the contract as clear as possible and preventing an employer from arbitrarily changing the terms.
The net result of the proposed labor law reforms is that millions of new workers would be added to the rolls of Chinese workers who have collective bargaining rights, job security, legally mandated benefits such as severance pay, access to grievance procedures, paid training programs, and freedom to change jobs.
US corporate interests oppose the laws because they prefer unregulated labor markets in which they can arbitrarily hire and fire workers and change the conditions of work in order to maximize profits. Many corporations look to the millions of people in China's workforce who aren't currently protected as a source of super profits.
Labor movement critics of corporate interests see such practices as a means to drive wages down and propel workers on a "race to the bottom" all over the world.
Room for Solidarity
Meanwhile, the labor movement in the US is also campaigning diligently for passage of reforms here. Labor wants the new Democratic Congress to pass the Employee Free Choice Act, which would guarantee the basic right of workers to organize and join unions. Business interests are greeting this reform measure with hostility similar to what they are showing in China.
The proposed new laws in China and the US, along with the current alignment of attitudes regarding them, suggest that the labor movement in the US and China have a strategic interest forging new alliances.
Setting aside differences for the sake of achieving the basic goal of workers' rights would be a significant step toward real solidarity. Global solidarity, this case shows, is the only avenue for stopping the "race to the bottom" and protecting the rights of all workers, in China, the US and the rest of the world.
Logistics Recruitment meets New Zealand¡¯s trade delegation in China
November 22nd, 2006The delegation of more than 140 industry players, including 75 Kiwi companies, senior trade officials, ministers and government representatives travelled to China as a part of Air New Zealand¡¯s launch of its first direct flight to Shanghai. The trade delegation headed by New Zealand Minister of Trade, Mr Phil Goff, was organised as exporters begin preparing for a possible free trade agreement with the emerging economic giant.
One of the key events during the trade mission was the launch of the first global talent centre (GTC) targeted at the professional NZ expatriate community living around the world. The joint venture between Logistics Recruitment and Kiwi Expat Association (KEA) will connect over 21,000 New Zealanders in 174 countries across the globe. The GTC has been established to provide an online job and career service that links talented NZ expatriates with premium career opportunities around the world.
Darryl Judd, General Manager, Logistics Recruitment, flew out from Australia to jointly launch the GTC in China and to speak about international talent pools and the benefits that expatriates can bring to the international Supply Chain & Logistics Industry.
As Logistics Recruitment already has established offices in China and understands the industry and market it was only fitting that provides the international infrastructure and networks to develop the GTC. The GTC is the perfectly positioned for talent exchange between China and New Zealand; talent being one of valuable exports in the global economy.
Logistics Recruitment has an extensive talent pool of expatriates and can work with local companies to find the right person to suit their business needs.
Their services offering in the China market encompasses: executive search, senior management recruitment, middle management recruitment, specialist technical recruitment such as engineers. Specialist Services are also available such as: Supply Chain consulting and education and Recruitment training.
Logistics Recruitment aims to train and educate the local market about the industry as a whole and the bigger picture visions for globalisation of Chinese businesses.
Logistics Recruitment can assist locals to better understand top management decisions and incorporate this in to their businesses, and the flow-on-effect will ensure that the local market is more effective and efficient.
Objectives of GTC:
To be a must-visit website for senior career opportunities within the Global expat community and domestic NZ market.
To attract top talent to the Kea network; New Zealand nationals and others seeking to either work in NZ, or for NZ companies in their local market.
To support businesses in their talent sourcing strategies by leveraging off the experiences and resources within the Kea network.
To provide a flexible, inclusive channel that significantly contributes to the growth and prosperity of New Zealand.
According to Logistics Recruitment, it is going to supporting further events in Shanghai to enhance the relationship NZ enjoys with China. With the relationship with Kea GTC, Logistics Recruitment can support the global New Zealand community in their career and commercial aspirations.
Logistics Recruitment are a large NZ owned recruitment company operating outside of the New Zealand market. With a global presence and a new office in Shanghai, Logistics Recruitment constantly assesses potential candidates for existing and pending positions, and over time this has enabled them to create a bank of pre-qualified candidates within the Logistics and Supply Chain sectors.
Background on the New Zealand trade delegation:
The NZ delegation included David Irving, former head of Watties for some 23 years and the former chairman of ENZA, Stuart Ferguson, Chairman of the NZ China Trade Association and Wen Powles the NZ Consulate General - Shanghai.
Other Key attendees included; Hon Phil Goff, Minister of Trade, Hon Kerry Prendergast, Mayor of Wellington, Hon Peter (Wing Ho) Chin, Mayor of Dunedin, Hon Kevin Winters, Mayor of Rotorua, Phil Lough and Tim Gibson, Chair and Chief Executive of NZ Trade & Enterprise, George Hickton, Chief Executive of Tourism NZ, Tony Browne, NZ Ambassador to China.
Background on trade between NZ and China:
China is the fourth biggest trading partner of new Zealand and its fourth largest export market.
Trade between the two countries totalled NZ $ 5.6 Billion last year, up 9 percent over a year ago. China had invested NZ$ 1.4 Billion in New Zealand by 2005.
Michigan needs unified China recruiting effort
November 22nd, 2006The expansion of business in and with China doesn't have to come at the expense of Michigan. But to get there, the state's leaders must band together and present a unified front, not the fragmented effort that exists today.
A business relationship with China won't happen unless Gov. Jennifer Granholm takes charge. Granholm, knows Michigan's auto industry and nearly all others recognize how valuable the world's largest consumer market is. That's why so many industry members are in Beijing this week for China's auto show.
Wayne County Executive Bob Ficano just returned from his second business recruiting tour there. Oakland County Executive L. Brooks Patterson also has made the trip. So have representatives from Automation Alley, area chambers of commerce and countless others seeking a slice of an economy that last year grew almost 10 percent.
We trust that Granholm has a greater grasp of the global marketplace than she displayed during the past year. In May, when she was in Japan, she snubbed the Chinese by not visiting -- and hurt business recruiting efforts -- though she sent state economic development officials instead.
The United States won't be able to compete with China for low-paying manufacturing jobs, but there are plenty of other avenues to pursue, starting with research and development and automotive knowledge jobs. Ficano said Monday that he was told repeatedly while in China that the central government is encouraging investment in America.
Hundreds of millions of dollars in Chinese investments are out there for the taking, but unless Michigan provides a unified recruiting front, we'll be left behind by peer states that are ahead of us. Ohio announced last week that is opening a trade office in Shanghai. Indiana already is established in China.
The Michigan Economic Development Corp. has a single-person operation in Shanghai. Wayne County opened an office west of Shanghai in Chongqing, but its creation was independent of any state efforts.
That confuses Chinese business and political leaders, who are left wondering why the state isn't the central resource.
Fortunately, Jim Epolito, chief executive of the MEDC, is pushing for change. In December, he is hosting a strategy meeting to get everyone on the same page.
"We really need to fly everything under the Michigan flag," he says.
That will help the likes of the Big Three, which all are investing heavily in China, but also the smaller and medium sized companies, as well. Sales of General Motors Corp. products in China, for example, are up more than 36 percent and the company, like Ford Motor Co., is building new plants and investing billions there. DaimlerChrysler is talking about building subcompact cars in China for export to the U.S.
It's time to move Michigan beyond isolationism and into the economic reality of the 21st century. That means not only acknowledging China's presence, but actively recruiting over there to bring jobs back here.
Ford Motor to setup a research center in Nanjing China
November 21st, 2006Ford Motor to setup a research center in Nanjing China
Ford Motor has said that they are going to invest 220 million Yuan to setup an automotive research and development center in China.
This would be just another way of expanding into this ever-growing market, which is becoming an important destination for automakers worldwide.
This research plant would help the company to setup the center as a global base for production design and technology innovation on all Ford models. They would be recruiting Chinese engineers for this research plant.
Meiwei Cheng, chairman and chief executive officer of Ford Motor China said in a statement on this new development: ¡°Turning global technology capabilities into real competitiveness on the Chinese market will enable us to take a big step forward.¡±
Can Yahoo! and Local Papers Save Each Other?
November 21st, 2006Yahoo! announced this morning a partnership with a number of large newspaper chains, controlling a total of 176 publications, to share content and functionality. Both Yahoo! and local papers around the US are in a state of crisis, which is amazing if you consider the market and mind shares both still control. Will this partnership make a significant difference for either party? I don¡¯t think it will.
Small, agile, low-overhead local sites that incorporate everything from the authenticity of blogging to the power of video to the immediacy and usefulness of mobile devices are just around the corner. Newspapers will likely retain superior access to other lumbering social institutions for some time, but all parties are going to have to change faster than they will be comfortable with.
The partnership will include the following:
Local content will appear on Yahoo! presumably similar to the way AP content does now. That¡¯s a logical and smart move; though local newspaper content is hardly thriving perhaps an infusion of traffic will help improve it.
Local jobs listings will appear on Yahoo! HotJobs. I don¡¯t think anyone cares about this - there¡¯s such a proliferation of online job listings that no jobseeker is likely to rely on one centralized site. Imagine trying to be the all-encompassing housing listing site - that too would be a losing proposition.
Yahoo will sell ads, provide site search, maps and the Yahoo! toolbar on local news sites. This will mean nothing unless the content on those sites become for more dynamic and compelling.
Comparisions are being drawn in the NYT to Google¡¯s recent partnership with a smaller number of more high profile publications and to similar efforts that have failed in the past decade. Google¡¯s newspaper deal is of course just one of many things they are working on, including selling radio advertising. This Yahoo! deal is too little too late.
It¡¯s a new world and both of these companies face incredible competition. Those competitors, best exemplified by local blogging networks but ultimately just a web of diffused readership, are just beginning to get their game on.
Is there any hope for local papers? The smartest ones are looking to leading examples, like the Lawrence, Kansas Journal World. That local paper has long done incredibly innovative things online - everything from local music blogs to mobile notification of schedule changes for local kids¡¯ sports games. There is hope, but it¡¯s going to require a greater paradigm shift than is represented by today¡¯s announcement of co-operation between staid local sites and a giant portal. The things made possible by new media are just too exciting; this deal will go down in history as a tiny band-aid on top of a massive hemorrhaging in the old media industry.
Yahoo!
Shanghai:Time ripe for welfare reform
November 21st, 2006China's high savings rate and sound public finances offer the right conditions for the authorities to proceed with social security and healthcare system reforms, People's Bank of China Governor Zhou Xiaochuan said.
Speaking to the Xinhua News Agency in Sydney, where he was attending a Group of 20 meeting of finance ministers and central bankers, the head of China's central bank said the nation's social security system should include all members of society.
Social security fund reform should involve government support, individual accounts and commercial insurance, Xinhua quoted Zhou as saying.
People with adequate savings should be encouraged to invest in personal pension and medical insurance schemes, Zhou said, stressing that the government should offer more support to poorer citizens.
The central bank governor said that pension funds, which are currently mainly held by banks, should be invested in capital markets to increase their value and generate higher returns.
The government is currently working on a plan to transfer 10 per cent of any domestic shares in listed State-owned companies to the national pension fund, the National Council for Social Security Fund.
The council, which had total assets of 230 billion yuan (US$29 billion) at the end of August, currently invests mainly in bonds and bank deposits and is planning to start overseas investment in the near future.
Zhou said the current healthy state of the nation's finances also offered good opportunities for further steps to be taken in foreign exchange rate reform.
He added that the nation's financial sector was now in a much stronger position than it was three or four years ago, noting that it was now better equipped to cope with interest rate reform and a more flexible yuan.
In another development, the People's Bank of China announced yesterday it had opened a representative office for the South Pacific in Sydney.
The office will improve communications with monetary authorities in the region and promote financial co-operation, the central bank said.
Grads can't find major-related jobs
November 20th, 2006Nov.19 - About 1.24 million Chinese college graduates have failed to land jobs that require their qualifications upon graduation this year, the county's top labour official said.
A total of 4.13 million students graduated from higher education institutions this year, 750,000 more than last year, as the country enters its ninth year of expanding college enrolment.
Tian Chengping, minister of labour and social security, said on Thursday he estimates about 70 per cent of college graduates have been employed since graduation, according to the China Youth Daily.
He said the central government has set up an inter-ministerial joint team, including the Ministry of Education, to help address employment problems.
Meanwhile, the Labour and Social Security Ministry has established a mechanism to provide guidance and training for unemployed graduates, the minister said.
Only 22 per cent of China's new jobs last year were for college graduates, estimates a ministry study of 114 urban labour markets.
Tian said the country should create more jobs in the process of economic development and urged college graduates to work in grassroots units and undeveloped areas where they are most needed.
China's official registered unemployment rate stood at 4.1 per cent in the first nine months of 2006.
The demand for college graduates was down 22 per cent in 24 provinces and 15 major cities from last year, said a report issued by the Ministry of Personnel in March.
A survey showed 52.14 per cent of bachelor degree holders considered lack of experience as the biggest obstacle in finding work.
Colleges and universities should organize internships to prepare students for employment, said Lin Zeyan, a researcher with the Development Research Centre of the State Council at a forum this month.
The country needs to develop its service sector and promote small and medium-sized enterprises to create more jobs, said Mo Rong, deputy chief of the Labour Science Research Institute.
More Chinese migrant workers covered by insurance
November 17th, 2006BEIJING -- The number of China's estimated 200 million migrant workers covered by medical insurance increased from 4.9 million at the end of last year to 18.4 million at the end of this September, the National Development and Reform Commission said on Thursday.
Migrant workers covered by employers' liability insurance also surged by 79.3 percent to 22.4 million in the first nine months of the year, thanks to China's stronger efforts to protect the rights of migrant workers.
China's economic boom has driven an unprecedented army of about200 million people to swap farms for factories, construction sites and mines as they seek a higher income.
A survey by the State Administration of Work Safety (SAWS) in nine provinces shows that migrant workers account for 80 percent of China's 30 million-plus construction workers. They also make up56 percent of the workers in mining and dangerous chemicals and fireworks factories.
The survey also shows that almost all the workers at small collieries are migrant workers. Even in state-owned collieries, almost all the non-management jobs are filled by migrant workers.
Poor safety facilities, slack safety rules and the lack of proper training have made migrant workers the most vulnerable group in terms of work safety.
To protect the interests of migrant workers, the Chinese government has been pushing for wider insurance coverage in vulnerable industries such as coal mining and construction.
By the end of last year, almost all the migrant workers in major state-owned collieries had been covered by employers' liability insurance.
China is also trying to strengthen the training of migrant workers, as the SAWS survey shows that 90 percent of industrial accidents are caused by human error, and 80 percent occur in work places dominated by migrant workers.
A SAWS guideline states migrant workers in dangerous industries must receive no less than 72 hours of safety training before they begin work. For those in the construction industry, the minimum requirement is 32 hours. The guidelines also require no less than 20 hours of safety training for each worker each year.
China to be the biggest energy producer
November 16th, 2006¨C China is working hard to improve its energy efficiency, and it is planning to expand the energy market scale to 10 trillion yuan before 2020. It is estimated that China will overtake USA in 2 years to become the biggest energy producer in the world.
Though China is well on the way to developing more energy resources, and the country does have a great potential in this field, it will still be wise for it to use energy in a sustainable way.
Besides fossil energy development, great achievements have also been made in developing clean energies like windpower, hydropower and solarpower.
Environmental protection will pose a great challenge, too, as even rapid growth of energy industry in the country should never harm eco-environment.
China will stick to the open-market policy in the future, which will bring mutual benefit to both China and the world.
Currently, a law on renewable energies is under being in preparation, and specific regulations on the development of clean energies will be made, too, to ensure energy security.
World Bank ups '07 China growth forecast
November 15th, 2006By Zheng Lifei (China Daily)
Updated: 2006-11-15 08:53
The World Bank yesterday raised its growth forecast for the Chinese economy next year, citing favourable domestic macroeconomic prospects.
The Washington-based bank expects China to register a 9.6 per cent growth in its gross domestic product (GDP) in 2007, up from its previous forecast of 9.3 per cent made in August, the bank said in its latest quarterly China Economic Report released yesterday.
The bank's growth forecast for the Chinese economy this year remained unchanged at 10.4 per cent.
The Chinese economy expanded 10.4 per cent in the third quarter, down from a decade-high 11.3 per cent recorded in the second quarter.
"Prospects for the Chinese economy remain robust," the bank said.
"Looking ahead, underlying domestic economic conditions remain favourable to rapid growth," it said, pointing to 30 per cent annual corporate profit growth, ample liquidity in the banking system and robust enterprise investment growth.
Although the government's macroeconomic control measures to slow down investment growth have already had a significant impact, government-led investment in "bottleneck" infrastructure such as transport and energy is likely to remain buoyant, the lender said.
The bank noted domestic consumption "should continue to benefit from rising incomes, particularly in urban areas."
In addition, the external environment, where prospects for a soft landing of the world economy remain good, is also favourable for the Chinese economy in the next year.
China's retail sales surge 14.3% in October
November 15th, 2006BEIJING -- China's retail sales surged 14.3 percent from the previous year to 699.8 billion yuan in October, the National Bureau of Statistics (NBS) said on Tuesday.
The retail sales of oil and oil products registered the highest growth of 32.7 percent, with that of construction and decoration materials second with 30.4 percent. Retail sales of home electrical appliances increased by 25.8 percent.
The NBS said retail sales had been on the increase ever since the beginning of the year.
The growth of retail sales for the first half of the year was 13.3 percent. It rose to 13.7 percent in July, 13.8 percent in August and 13.9 percent in September.
The retail sales for the first 10 months stood at 6.2089 trillion yuan, up 13.6 percent on the previous year.
Although the growth of retail sales has risen, analysts said it was still far behind the growth of investment. The country's fixed assets investment shot up by 27.3 percent in the first three quarters.
This means China still has a long way to go if it wants consumption to replace investment as the main engine of its economic growth, the analysts said.
ICBC makes gains after world-record listing
November 13th, 2006Shares of the Industrial and Commercial Bank of China (ICBC) have posted modest gains two weeks after investors scrambled to get in on the world's largest ever initial public offering.
The dual listing of the bank's shares in Hong Kong and Shanghai, the first of its kind for China, sparked frenzy as top rank foreign and domestic investors sought to get a piece of the Chinese growth miracle.
The demand was so intense that the lender, China's largest, decided to exercised its over-allotment option this week, increasing the number of shares on offer to raise a world record-breaking 21.1 billion dollars.
While the state-owned ICBC staged a strong debut in Hong Kong last month with Shanghai lagging behind, two weeks on, its shares have only managed to score modest gains, analysts said.
They have risen 19 percent from their offer price in Hong Kong and 12 percent higher than the issue price in Shanghai with many individual investors having taken profit, they said.
Although fresh fund inflows are flooding the Chinese and Hong Kong stock markets, pushing them to record highs as investors bet on a further strengthening of the Chinese yuan, the money has also gone to other China-related stocks.
"I am a little disappointed with its performance," said Francis Lun, general manager of Fulbright Securities. "It's a big bank. I expected it would perform better."
In Shanghai however, Gu Junlei, banking analyst with Orient Securities, said ICBC's performance matches its expectations: "It offered a lower initial public offering price, which paved the way for further steady increase."
Kitty Chan, director of Hong Kong-based Celestial Asia Securities Holdings, said its performance was "acceptable" and remained within her expectations given the many problems that have dogged the sector.
International investors have jumped at the chance to buy into a piece of the Chinese financial sector despite mountains of bad debt, poor management and a lack of transparency.
But Chan said: "Investors will continue to be attracted by a country that has good economic growth and that will go for its banks."
ICBC is the third of China's big four banks to go offshore after Bank of China and China Construction Bank as part of government-driven sector reform.
(Source: AFP)
Millions more jobless expected in Chinese cities
November 13th, 2006BEIJING: Employment pressure is building in China with an additional 50 million people expected to be hunting for a limited pool of jobs in cities by 2010, state media reported on Friday.
Only 40 million new jobs will be created for urban residents between 2006 and 2010, leaving an additional 10 million people without work, according to a new report by the Ministry of Labor and Social Security, the China Daily said. It said the government was striving to maintain the unemployment rate among registered city residents at below five percent.
However, the jobless problem has been exacerbated by a massive influx of rural job seekers who are not registered in cities. China population of migrant workers is estimated at 150 million, or 11.5 per cent of the population, double the figure for a decade ago, the newspaper said.
The migrant workers plus other factors ensure that unemployment would remain a problem for the world most populous country in the years to come, it said.
Project names 'top employers'
November 13th, 2006A project was launched in Beijing on Friday aiming to build employer brands by naming China's "top employers" in a new publication and on TV.
The China Top Employers project was also launched in Shanghai in May by the Corporate Research Foundation (CRF), a Netherlands-based independent publishing company.
"Its format is unique in China. It aims to help companies build an employer brand," said Cai Rong, chief representative of CRF China. She added the project is currently active in nine countries.
Jobseekers, MBAs, EMBAs and graduates returning from overseas will be able to get information about companies selected by the CRF through books and TV shows.
"But each company has to pass a rigorous selection process to become one of the 'top employers' in China," Cai said.
After registering, companies complete a questionnaire and a CRF journalist interviews one of their senior human resources managers and two employees from the firm.
"Our questions vary from country to country and region to region covering a wide area from salary, welfare and corporate culture," Cai said. She added questions for each region are designed by a panel comprising experts from human resources companies, universities and the media.
"The information provided by the questionnaire is fully confidential and will be used to evaluate the participant and generate benchmark data," she said.
The CRF determines whether a company meets the minimum criteria to become one of China's "top employers," determining the top three reasons to work for the firm and a confidential report.
If a company fails the final selection and publication, all research material and CRF reports are returned. The whole process is then free of charge.
If the participating company is selected as one of China's "top employers," the company profile as written by a CRF journalist is submitted to the firm. Companies are only able to make factual changes to the text.
The companies will be listed in a book, which is to be directly delivered to jobseekers. The book describes the advantages of the companies through information gleaned from the interviews.
"We will also take them (the selected companies) to seminars and TV shows to discuss with young talents issues concerning employer branding," Cai said.
Companies are charged US$5,800 in Shanghai and US$7,800 in Beijing to cover research, writing, editorial, production and marketing costs.
The programme attracted 48 companies in Shanghai, including DHL, Alibaba, China Mobile and Home Inns. Thirty-eight have been selected as China's Top Employers for 2007.
But Cai said domestic companies only make up a tiny proportion of the firms about 10 per cent of the total.
"We hope Chinese companies will attach more significance to building an employer brand," she said.
The concept of employer brand was put forward by Western enterprises. Human resources departments play an important role in Western companies, but this is not the case in China.
"Human resources directors are not given enough rights in China and some roles that should belong to the department are played by other departments," Cai said. "China's human resources departments always remain at the operational level rather than at the strategic level."
In many Chinese companies human resources departments are responsible for recruiting but not for retaining people. For this reason job turnover in Chinese companies is two to three times higher than in Europe.
Cai said it is also an initiative that drove them to bring the project to China
A reader's toolbox:
70-536 as well as 70-290 are necessary to meet the eligibility criteria of 640-822 and 642-812 as well as EX0-101. Eventually all this experience matters in ccie.
51job.com Gets Q3 Job Done
November 13th, 2006Total revenues increased 12.5% over Q3 2005 to US$22.9 million for 51job.com (JOBS). The online job recruitment website tofday announced its unaudited financial results for the third quarter of 2006 ended September 30, 2006.
Print advertising revenues for the third quarter of 2006 increased 5.7% to US$12.4 million compared with the same quarter in 2005. The company says the increase was primarily due to a greater volume of advertisements in 51job Weekly and higher average revenue per page.
The estimated number of print advertising pages generated in the third quarter of 2006 was 3,217 compared with 3,115 pages in the same quarter in 2005. Average revenue per page in the third quarter of 2006 increased 2.3% over the third quarter of 2005.
Online recruitment services revenues for the third quarter of 2006 were US$7.3 million, representing a 29.6% growth from RMB44.4 million for the same quarter last year. The increase was principally attributable to growth in the number of employers using the company's online services. Unique employers using the company's online recruitment services increased to 44,969 in the third quarter of 2006 compared with 34,407 in the same period last year.
Gross profit for the third quarter of 2006 was US$12.1 million, representing an increase of 15.9% from the same quarter last year.
As of September 30, 2006, the company's cash balance was US$104.5 million compared with RMB830.6 million at December 31, 2005 and RMB812.5 million at June 30, 2006.
Recruit Holdings Joins Forces With Netease For Job Portal
November 10th, 2006Hong Kong-listed recruitment advertising group, Recruit Holdings Ltd, is going to cooperate with Netease.com (NTES) to launch a job-seeking portal 1010job.com.
1010job will not only provide job related information to the huge traffic of viewers generated by NetEase, but will also provide 'Elite Job Forum' in association with 'NetEase Forum'. A unique 'CV Through Train Service' will be provided to the 160 million NetEase mailbox users to facilitate their needs in job application. Apart from that, Netease and 1010job will produce more value-added service to jobseekers based on their shared 'jobseeker-centred' concept.
The potential of the online recruitment market in China has been attracting steadily increasing foreign investment. Major online recruitment providers from Europe, America and Japan have already devised and actioned a variety of strategies enabling them to participate in exploiting the Chinese market.
2006 is seen as being a landmark year for foreign investments coming into China. Following Monster's acquisition of a major stake in ChinaHR, Japan Recruit, Japan's largest recruitment service provider became a significant shareholder of 51job. Enjapan, the second largest online recruitment website in Japan announced it had agreed to cooperate with 800HR, a segmental recruitment website in Beijing. The largest recruitment website from Ireland, Keyland, has been even more aggressive in merging two local recruitment websites in Shanghai and Beijing, respectively. Meanwhile, major players from Taiwan and Hong Kong have also expedited their expansion into the mainland market. Taiwan's biggest recruitment website, 104 HR bank has already entered Shanghai.
China's Online Q1 Recruitment Market Reaches RMB148 Million
November 10th, 2006Analysys International's recently released report ''China Online Recruitment Market Quarterly Tracker Q1 2006'', shows that China's online recruitment market reached RMB148 million in the first quarter of 2006, increasing 6.59% quarter-over-quarter.
Analysys says the market pattern of China's online recruitment industry remained unchanged in the first quarter of 2006. 51job.com (JOBS), ChinaHR.com and Zhaopin.com firmly occupied the top 3 positions in the market.
51job.com kept excellent growth momentum in the first quarter of 2006, with online recruitment revenue reaching RMB 48.53 million, representing an increase of 9.35% quarter-over-quarter. Both its registered users and companies increased greatly. ChinaHR.com also carried out frequent market activities, with website traffic increasing sharply.
According to the report, in the first quarter of 2006, nationwide recruitment websites accounted for 77% of the total online recruitment market in China, and provincial websites accounted for 19.1% of the total market.
By the end of the first quarter of 2006, total registered users of online recruitment reached 37.34 million in China, increasing 23% quarter-over- quarter. Number of registered companies reached 3.93 million, increasing 10% compared with that of the first quarter of 2005.
Manpower Looks To China, India, Europe For Growth
November 9th, 2006BY MARILYN ALVA
INVESTOR'S BUSINESS DAILY
Since it went to France nearly 50 years ago, it has been hard to keep temporary staffing firm Manpower (MAN) home in Milwaukee.
Besides Paris and other French locales, it has gone to Germany, the Netherlands, Belgium, Italy, Mexico, Argentina, Japan, India, China and scores of other foreign countries for a total of 4,400 offices in 72 nations.
In and around Paris alone, Manpower runs 220 offices. Today, France accounts for almost 36% of overall revenue. While France is Manpower's biggest single market, Europe is its top region.
"We have a long history of being truly global," said Chief Executive Jeffrey Joerres.
Geographic diversification is one of Manpower's key strengths, analysts say.
The staffing industry is notoriously cyclical, depending much on economic winds. So if one country or region slumps, Manpower is apt to see another region offset it.
That is now the case with Europe, where robust revenue growth on the Continent offset the past quarter's anemic 2% growth in the U.S., where the economy is slowing. The economy is still growing in Europe, and Manpower's revenue there grew about 19% over last year excluding France. French revenue rose 12%.
"You've got a secular growth story in Europe that you don't have here," said analyst Jeffrey Silber of BMO Capital Markets.
Manpower has long been known as a staffing firm for employers looking for short-term workers, especially in light industrial and clerical jobs.
Though Manpower has been moving up the job ladder to more skilled personnel and permanent placements, temporary staffing is still its core strength, accounting for about 70% of the company's gross profit.
The temp market is still far from saturated. Temp workers make up only 2% of the working population in the U.S. In Europe the percentage is higher ¡ª double in some countries ¡ª and apt to get higher still. That's due largely to Europe's restrictive pro-labor laws, which make it more difficult or costly for employers to downsize.
Cautious Employers
"You're in an environment where companies have to be cautious and thoughtful before they take someone on," CEO Joerres said. They increasingly are looking to flexible temporary workers to fill holes.
In the large and fragmented U.S. temporary staffing market, Manpower's biggest rivals are Troy, Mich.-based Kelly Services (KELYA) and Switzerland-based Adecco International, (ADO) which has struggled recently and has new management. Adecco is Manpower's top rival in Europe.
Manpower employs 1,500 permanent recruiters in Europe alone. "This is a market we really want to go after and go after hard," Joerres said.
Italy didn't allow companies to use temporary workers until 1997. That same year, Manpower moved in. It counts 450 offices in Italy and expects revenue there, which is growing 25% annually, to reach $1 billion this year.
All of Manpower's offices are staffed mostly with locals who understand local job markets and labor laws. "It's by design and strategy. We have one expat in all of Europe," Joerres said.
Though its presence in India and China is relatively small, those are two of Manpower's most promising emerging markets. In both countries, Manpower focuses more on management and professional positions than entry-level jobs.
Joerres says Manpower is the largest recruitment firm in India. The firm works for Indian and U.S.-based companies, including some of the top back-office and software outsourcers. It has about 10,000 people on temporary assignments in India on a given day. That's still well below France's 175,000.
"Manpower is in the investment mode in those countries, building out operations with the idea that five to 10 years from now they'll bear fruit the same way Italy is bearing fruit," said analyst Mark Marcon of Robert W. Baird.
Many of Manpower's largest overseas clients are U.S.-based multinationals such as Honeywell, (HON) IBM, (IBM) Hewlett-Packard, (HPQ) Motorola (MOT) and Abbott Labs. (ABT)
Over the last few years Manpower has expanded into specialty and permanent job placements and career counseling. The firm's Jefferson Wells division, which focuses on high-end accountants, and career and outplacement unit Right Management are still small, however. Sales slowed in both divisions in the last quarter, partly because of the loss of two large accounts for non-recurring work tied to Hurricane Katrina and Sarbanes-Oxley.
Nevertheless, Silber credits Joerres, who became CEO in 1999, for spearheading acquisitions that moved the company into higher margin businesses.
Stock Buybacks
Under Joerres, shareholder-friendly policies such as stock buybacks and rewards for achieving higher returns on invested capital were implemented.
Investment in new technology enables the firm to increase revenue without corresponding growth in expenses. Productivity has increased in branch offices. The firm also has been able to raise prices without much customer resistance.
Even though the U.S. business grew only 2% in the third quarter, U.S. operating profits jumped 26.7%.
Earnings in the quarter soared 33% from last year to $1.16 a share on revenue of $4.6 billion, which was up 12% from the year earlier period. Analysts estimate earnings will rise 27% for the full year to $3.71 a share and grow an additional 16% next year.
Growth often slows when a company gets big, according to the law of large numbers. That's not been the case with Manpower, which has shown 20% to 30% earnings growth over the past few years and an average 13% top-line growth.
"We are a very large company that still keeps an entrepreneurial and growth attitude," Joerres said. "We're 60 years old and the core part of our business ¡ª temporary staffing ¡ª is still fast-growing."
Recruitment firms boost investment in China
November 9th, 2006Recruitment companies have increased their investments in China, according to a new study by the1, merger and acquisition (M&A) specialists for the human capital sector. The study identified a cumulative total of 156 investments in China by 106 foreign recruitment or human-capital groups over a 20-year period.
China as a whole - including deals made in Hong Kong - has seen a steady rise in the number of investments over the years. It saw a 70% boost in investments, from 40 transactions in the 1995-99
period to 68 in the post-2000 period.
However, the growth was faster (132%) for investments in mainland China (58 post-2000 versus 25 in the prior period), the first empirical evidence that foreign human-capital companies have stepped up their investment on the mainland.
"China is the human-capital sector's number [one] opportunity long-term," said Mark Dixon, a director of the1. "With a population of 1.3 billion, you don't have to be a rocket scientist to do the math. It's a numbers game, with some very big numbers."
Explaining this shift in investor attitude, Dixon said, "People have been aware of the potential of the Chinese job market but most viewed 'M&A for people businesses' as too theoretical - the country, the culture and the prospect of profits all being too far off.
"But now we now seem to have passed a tipping point. Although the Chinese recruitment industry is nascent and impeded by red tape, profits are already being made. This has negated the old excuse in the industry that China should be left as a challenge for the next generation."
Commenting on the maturity of the investment flow, Dixon said, "We haven't entered a land-grab phase yet. In coming years, investors will move on from toe-hold investments to building national brands and large office networks across China. We'll see them pour in real capital.
"Larger recruitment groups are starting to feel pressure from clients, institutional investors and boardrooms," he said. "The result is clear. The attitude to China is moving from opportunity to obligation. Obsession may not be far away."
Hong Kong
Hong Kong, which saw most of the early investment, has been receiving less attention. It attracted 10 transactions post-2000, compared with the 58 on the mainland during the same period. Hong Kong now is viewed more as a market in its own right rather than as the gateway to China. Companies wanting to capitalize on "the China opportunity" are discovering they need to be in China proper.
Cumulatively, Hong Kong has received 51 deals, compared with 105 on the mainland. Before Britain handed Hong Kong back to China in July 1997, the small territory attracted more human-capital-sector investments (53%) than the entire mainland. It is no longer where the action is. After the handover, a period that coincided with an investment flow into China from many countries and industries, the balance has switched - mainland China has attracted 82% of all deals.
This move inland is even seen among the pre-handover investors in Hong Kong themselves, who made 35 deals. Some 77% of these groups have subsequently expanded into mainland China.
Commenting on this trend, Dixon said, "Hong Kong used to be King Kong - the 800-pound gorilla on the Chinese human-capital stage, a sort of bouncer standing outside the stage door of China. Kong has now gone, at least in that capacity."
Legal structures used
A range of different legal structures is being used by investors to operate in China, some on a solo basis and some with partners.
More than half (55%) of the investments involve the foreign company setting up a new subsidiary in China. This compares with 28% of investments in the form of representative offices. Just 17% are new joint ventures with a local partner or the partial acquisition of an existing local company (which results in effect in a joint venture after the transaction).
Regulations have allowed 100% foreign ownership of some categories of human-capital investment, notably human-resources consulting, rather than headhunting or recruitment, which have found it difficult to get licenses at any level of ownership.
Since October 2000, rules have been loosened, allowing 49% foreign participation of all categories. Joint ventures are thus becoming more popular. Just 17% of the total investment count for all periods, joint ventures accounted for 35% of investments since 2002 compared with a negligible 9% prior.
China to become world¡¯s 2nd largest market for capital management
November 9th, 2006Chinanews, Shanghai, Nov. 9 - In a recent report released by Mercer Oliver Wyman, the company predicts that over the next nine years, financial assets will increase sixfold in China and by 2015, the newly increased financial assets owned by Chinese individuals will account for 10% of the total newly increased financial assets in the world, making China the world¡¯s second largest financial management market next to the United States.
The report analyzes that Chinese people have a high tendency to save money. In China, the deposit rate exceeds 20%, nearly ten times that of the United States. The high deposit rate coupled with Chinese robust economy will make the total financial assets expand rapidly in China. Related information shows that at present, Chinese people¡¯s total financial assets reach nearly 3 trillion US dollars (excluding real estate properties). Since most Chinese people like to buy things in cash, the scale of financial assets managed by financial institutions is still relatively small at present.
Based on experiences learned from other developing countries, Mercer Oliver Wyman predicts that as the per capita GDP rises, the proportion of cash in Chinese people¡¯s assets composition will become smaller in future. As a result, the financial assets management market will boom. In addition, changes of policies in regulating the floating assets in China are also likely to change the developmental mode of the assets management market in China fundamentally.
Looking from global range and the situation of the Asian-Pacific region, the report envisions a prospective market for Chinese financial management in future. It says that by 2015, the capital asset in the investment management sector will increase from 300 billion US dollars at present to 2 trillion US dollars by then and the investment products will include funds, pensions and insurance
The Leading Job Search Engine in Asia, Recruit.net, Announces a Partnership with JOBcentral and DirectEmployers Association USA
November 9th, 2006HONG KONG, Nov. 9 /Xinhua-PRNewswire/ -- Recruit.net, the leading
vertical job search engine in Asia, today announced that it will be working
with the U.S.-based DirectEmployers Association to bring almost two million
job listings in Asia indexed by Recruit.net to the job listing site
JOBcentral.com. Using one simple search a user looking for job
opportunities on the JobCentral site will now also be able to find
additional job opportunities in China, Hong Kong, Japan, Australia,
Singapore and India provided by Recruit.net.
"This is a great first step in our cooperation with the DirectEmployers
Association and is a win-win for all parties. Jobcentral users get access
to millions of new jobs in Asia and Recruit.net integrates with the
National Labor Exchange and their network of over 200 leading US
Corporations" said Maneck Mohan, founder of Recruit.net.
Bill Warren, executive director of DirectEmployers Association states,
"We are excited about the opportunity to work with Recruit.net which has
quickly become the leading vertical search engine for jobs throughout Asia.
Our member companies, all leading U.S. corporations including many with
operations in Asia, have been extremely impressed with Recruit.net's
vision, development and rapid expansion in the Asian market."
About DirectEmployers Association
DirectEmployers Association is a nonprofit organization formed by human
resource executives from leading U.S. corporations to meet the latest
challenges in corporate recruiting. The Association created and maintains
JobCentral.com ( http://www.JobCentral.com ), the Internet's only cooperative,
employer-owned search engine dedicated exclusively to employment.
About Recruit.net
Recruit.net http://www.recruit.net is a Hong Kong-based tri-lingual (English,
Chinese & Japanese) vertical job search engine focused on jobs in Mainland
China, Hong Kong, Japan, Australia, Singapore and India. The search engine
indexes millions of job listings around Asia from multiple sources
including job recruitment sites, newspapers, companies and executive search
firms and enables job seekers to instantly search multiple web sites via
one simple search free of charge. Recruit.net provides a range of features
to its users including powerful search functionality, the ability to upload
resumes and to receive job alerts via email or RSS feed.
As barriers fall in auto business, China jumps in
November 9th, 2006Wednesday, November 08, 2006
By Gordon Fairclough, The Wall Street Journal
NINGBO, China -- The first cars to roll off the line at Geely Group's sprawling plant here six years ago were crudely built hatchbacks, powered by Toyota Motor Corp.-designed engines. Annual production was less than 5,000.
Today, Geely makes 180,000 cars a year, with models including sedans and a sports car. It has engineered its own six-cylinder engines and is selling cars not just in China, but in Latin America, the Middle East and Russia as well. Geely even signed a joint-venture deal recently to build London's iconic black taxicabs for sale in England.
"How to make cars is no longer a big secret," says Li Shufu, Geely's chairman. "The technologies are widely used and shared."
Major changes in how the world's biggest auto makers operate -- outsourcing everything from design to component manufacturing -- are making it easier for China to join the ranks of globally competitive car producers in far less time than it took Japan and South Korea.
The result: In many ways, cars are becoming a commodity. And the manufacturing of vehicles is starting to shift to China, in much the same way that production of garments, televisions and computers did. The development is likely to pose a serious challenge to established car companies around the world.
"China is coming," says Michael Laske, head of Austrian engine-technology firm AVL List GmbH's China operations. "It's inevitable. The business is different today."
China is already the world's second-largest vehicle market, and it is growing fast. China's government is working to promote the growth of domestic auto manufacturers, including Mr. Li's Geely, whose cars will be on display this month at the Beijing Auto Show.
Plenty of obstacles remain to China's becoming a true world player. China's domestic brands still often fall short of the quality and reliability standards expected in Western markets. And many in the industry say Chinese car companies don't yet have the skill and experience needed to run a global business that can distribute, market and repair vehicles in countries around the world.
"It's easy to build a car," says Ford Motor Co. Chairman Bill Ford Jr. "It's harder to build a brand."
Geely's Mr. Li, a 43-year-old engineer, wants to be China's Henry Ford, making affordable autos for the Chinese masses and exporting them around the world. The son of poor farmers, he has created an empire of auto plants in four cities, and expects to make two million cars annually by 2015.
Mr. Li also has built a university -- with a library modeled on the U.S. Capitol -- and a chain of technical schools that teach young Chinese how to make cars.
Geely buys fuel-injection systems from Robert Bosch GmbH of Germany. Interior parts come from a Chinese company that also supplies Volkswagen AG and General Motors Corp. Its steel plate comes from the same mill that sells to Ford, GM and Volkswagen. Dies and other manufacturing equipment come from a Taiwanese company.
Plenty of Advantages
Chinese auto companies already have plenty of other advantages. Many of them have learned a lot from joint ventures with the world's biggest car manufacturers -- from GM and Toyota to DaimlerChrysler AG and Volkswagen.
As big international manufacturers have moved to China, many of their main suppliers have followed them, and are now working for Chinese manufacturers too. The big car makers have also cultivated a host of suppliers and helped them get up to speed, something which has big spillover effects for local assemblers.
Upheaval in the global auto industry is also helping China. Chinese companies have managed to buy designs and equipment and hire talented executives from struggling competitors.
Shanghai Automotive Industry Corp., which has long-running joint ventures with GM and Volkswagen, bought blueprints for sedans from now-defunct MG Rover Group Ltd. of Britain and hired many of the company's engineers. It launched the first of its own Rover-based vehicles last month and plans to begin selling the cars abroad next year.
Western companies looking to cut costs are also looking to China. DaimlerChrysler is in talks with Chinese state-owned Chery Automobile Co. about a joint venture to produce compact cars under Chrysler's Dodge brand name for sale globally. The negotiations are at an advanced stage, people familiar with the situation say. Fiat SpA of Italy recently announced plans to buy engines from Chery to power some of its cars.
U.S. private-equity investors are also betting on Chinese car makers. Capital Corp. of America has a deal with Hebei Zhongxing Automobile Co. to sell its pickup trucks and sport-utility vehicles in North America. A Capital Corp. unit, China America Cooperative Automotive Inc., or Chamco, is helping Hebei Zhongxing meet U.S. safety and environmental standards.
"We're outsourcing the manufacturing of cars," says Bill Pollack, executive vice president of Parsippany, N.J.-based Chamco. Building cars in China will help Chamco "have a significantly different cost structure from what's in place today" in the U.S., he says. Chamco pickups will be priced starting at $13,250 and will arrive in the U.S. by late 2007 or early 2008, Mr. Pollack says.
A Chamco ad recruiting dealers that appeared in a recent issue of trade magazine Automotive News compares the arrival of the Chinese autos to the Japanese. "If you didn't move fast enough to get a Toyota or Honda dealership, here is the next opportunity of a lifetime," the ad says.
It will likely be years before Chinese cars arrive en masse in the U.S. market, but the country's car makers already are exporting to price-conscious customers in the developing world -- an area vital to the prospects of U.S. and European firms.
Mr. Li says the Chinese are determined to make a big splash. "Autos stand for a country's image, its power and its economy."
Woven into the carpet on the floor of Mr. Li's meeting room is a poem he wrote last year. It exhorts Geely's employees to be diligent. "The freezing wind is gone, Spring comes," the poem says. "We bury our heads to work." The poem ends by promising that, "After ten years' endeavor, Chinese cars will become powerful."
Mr. Li was born on a farm in rural China in 1963 and grew up amid the upheaval of the Cultural Revolution. He alternated years in school with work in the fields, depending on the state of his family's precarious finances. When he finished middle school at age 17 in 1980, he used his graduation gift of 100 yuan, worth about $12 today, to buy a camera.
The camera launched his career as an entrepreneur. He used it to take pictures of villagers for a fee. In time, he opened a studio and raised enough money to go into a totally new line of business: stripping precious metals out of discarded appliances and machinery. That led to an enterprise making refrigerator parts.
Then, in June 1989, the Chinese military cracked down on pro-democracy protesters in Tiananmen Square. "We felt very insecure," Mr. Li says now. It wasn't clear whether the government's market-friendly policies were going to be rolled back, he says. "For the sake of safety, I gave up everything."
He turned over his factory and his savings to the local government. Mr. Li finally went back into business a few years later. He started a company making building supplies. In the early 1990s, he decided his real ambition was to build cars. "Chinese people were starting to have money. Families would be able to afford cars," he says.
But the Chinese government -- which at the time barred private companies from the auto business -- wouldn't give him a license. So Mr. Li made motorcycles. But he also built a pilot automobile plant, and he and his engineers began experimenting with car production.
Mr. Li and his cohorts bought a series of cars then available in China and started dissecting them to learn how they were built. Then they started trying to assemble their own. They finished the first prototypes for their own cars in 1998, based -- loosely, Geely says -- on competitors' models. Geely finally got government approval to sell cars in 2001.
Some plants made cars based on a Toyota model that was being produced by a state-owned company and sold under the name Xiali, according to industry analysts. Toyota sued Geely in 2002 for trademark infringement and unfair competition, saying that the company implied in ads that some of the parts were made by Toyota.
The court ruled in favor of Geely in 2003. A Geely spokesman, Zhang Xiaodong, says the early Geely Haoqing model was developed by "learning and imitating" the design of the Xiali.
Critics of Geely say that another of the company's early models bore a striking resemblance to a small car made by PSA Peugeot Citroen. Mr. Zhang, the Geely spokesman, denies that the company copied a PSA Peugeot Citroen car. But he says that Geely did buy parts from suppliers that made components for both the Xiali and PSA Peugeot Citroen vehicles. Many suppliers were based in the same province, Zhejiang, where Mr. Li was born and where some of Geely's factories are located.
As Geely's engineers became more sophisticated, they started work on a series of other models. The company contracted with local and foreign design firms, and Mr. Li began to hire engineers from other companies.
In 2005, Geely launched the CK-1, a compact sedan designed by the former design arm of Daewoo Motor Corp. of South Korea. It has since sold nearly 100,000 of the cars. Two more models, including a midsize sedan, have been introduced this year, and others are being developed to launch in 2007.
The company now makes its own engines and transmissions, examples of which sit on plinths in the lobby of Geely's headquarters in Hangzhou, about 110 miles south of Shanghai. Interiors are fancier, too. Some have leather seats and DVD players. On a dais sits a Jinggang sedan, dubbed the "King Kong." "Some people say the rear end looks like a Cadillac," one employee, taking a visitor on a tour, says with pride.
Shim Bong Sup, a veteran engineer with Daewoo, joined Geely in 2004, charged with improving its engineering and vehicle-development skills. His main focus has been to force engineers and designers to focus first and foremost on improving quality.
When Mr. Shim first arrived at Geely, he says the company was having serious problems with its interiors, which were too easily deformed in high temperatures because parts weren't made to exacting-enough specifications. That problem and others have been resolved, he says.
"In design and development, there is still room for improvement," says Mr. Shim. But he adds that manufacturing is improving quickly.
At the Geely factory in Ningbo, car bodies move along the assembly line in yellow cages suspended from a cableway in the ceiling. Robots do the most critical work: welding chassis and bodies. But workers do much more of the assembly by hand than in Western auto factories.
Assembly-line workers in Geely's plants tend to be in their early to mid-20s. And they are paid an average of about $150 a month -- roughly 80 cents an hour. To insure quality, workers use small stamps to imprint their names in a book attached to each car as it passes their station on the line.
"First it was Japan, then Korea. Now it's our turn. We're ready," says Liu Lei, 24, dressed in Geely's blue factory uniform. "We are learning from our mistakes. We have a lot of confidence."
Geely has exported more than 20,000 cars to 42 countries, mostly in the developing world. "This is our first step. We want to sell the cars, test them out and get some experience," says Jie Zhao, head of international operations.
Soon, the company plans to start selling in richer Asian countries and in Eastern Europe. "In the last step, we will go into Western European countries, as well as the U.S.," Mr. Jie says. Mr. Jie refuses to give a timeline for exports to America, saying it is hard to predict how quickly the company will be able to get ready.
In an effort to gain experience for entering the U.S. market, Geely started selling some cars in Puerto Rico this year. The company said it couldn't provide sales figures.
For Mr. Li, China's emergence as an automotive powerhouse is an unavoidable result of the flow of economic history. "Globalization is changing the world distribution of industries. Industry here is developing from the simple to the sophisticated," says Mr. Li. "China will become a base for car production."
Ford Motor's Mr. Ford agrees that auto business and other manufacturing industries in the U.S. are going to be affected by the growing sophistication of Chinese companies. Ford, along with Japanese partner Mazda Motor Corp. and ChangAn Automobile Group of China, has one assembly plant operating in Chongqing and is finishing construction on two additional factories -- one for cars, the other for engines, in Nanjing. This is happening as Ford is cutting thousands of jobs in the U.S.
"Americans don't get it. They don't understand what's going to happen," Mr. Ford says.
More 'Boomerangs' Return To Their Former Employers
November 8th, 2006If you're looking for a new job, don't rule out companies where you worked before. They might be more interested than you would think.
Former employees, once spurned as damaged goods or disloyal, are increasingly getting a warm reception -- or even a recruiting call -- from many companies. The attitude shift is prompted by an unemployment rate that's been below 5% all year, a shortage of skilled workers and the need to control labor costs in the face of globalization.
Managers have come to appreciate that returning employees generally require less training and are likely to get up to speed more quickly than a fresh hire. So-called boomerangs already know a company's systems, policies and culture.
The odds of a good fit between the worker and job are also enhanced because current managers or other employees can usually vouch for the person's past performance. "When you know a person and you know the caliber of their ethics, their personality and attitude, it's invaluable," says Daniel Solomons, chief executive at Hyrian, a Los Angeles recruiting firm.
'Not Mount Everest'
The bottom line for job seekers: If you pine for a former employer, you can do something about it -- and you don't have to return with your tail between your legs. "This isn't Mount Everest," says Philadelphia career coach Julie Cohen. "This is feasible."
Ms. Cohen says one benefit of being a boomerang is that you already have contacts within the company. Use them. Former co-workers can advise you of jobs before they're available to the public -- and give you the lowdown on the responsibilities and the people involved.
Sacramento career coach and author Kathy Sanborn advises people to make contact a few months before they're ready to send in a resume. Ms. Sanborn suggests emailing an article that could help the boss address a business concern. A friendly call or even a lunch invitation to an acquaintance who's in a position to lobby for you is also appropriate.
If it's been a while since you were in touch, that first call or visit is an ideal time to catch up on what's happening at the company and to relate a few experiences that show how you've developed. During the second contact, a couple of months later, you can fish for job openings or suggest you'd be interested in returning to the firm.
My, How I've Grown
When you're ready to apply, the experts suggest clearly explaining how you're more valuable than you were when you jumped ship.
Matthew Whipple left accounting giant Ernst & Young in 1998 and returned this year. In the interim, he went to work for a smaller accounting firm that had a contract with the United Nations; he got promoted and moved to Geneva, Switzerland, for part of the term. He was called upon to manage large projects and work with government officials, and he learned new accounting skills.
Back at Ernst & Young, "I can draw on all those experiences now," he says.
Mr. Whipple had stayed in touch with his colleagues and participated in Ernst & Young's alumni program. The company has 32,000 registered alumni in the U.S. who participate in volunteer events, workshops and networking sessions. This year, 26% of the people Ernst & Young hired to be managers or above were boomerangs.
Back After a Break
Boomerangs don't always return from working somewhere else. Some had opted out of the work force because of illness or to manage family responsibilities.
Workers who are ready to return after an extended absence may find that old bosses are among the most receptive to their resumes, because the past relationship compensates for uncertainty about employment gaps.
Many of the usual guidelines for re-entering the work force still apply: You should consider refreshing your skills with a class or two and should join a professional association to build new contacts and learn the latest in industry news and terminology. But re-entering as a boomerang can make the transition easier.
Brad Sugars, who regularly hires boomerangs for his consulting firm, Action International, based in Las Vegas, says people shouldn't hesitate to sell the boss on the quirky skills they learned while outside the work force.
Mr. Sugars personally spent three years at home with his kids. When he returned, he found he had more patience and understanding than ever before -- two qualities that can help immensely on the job.
If an employer is inclined to hire you back, but seems skeptical about your ability to pick up where you left off, consider starting at a lower level, with the understanding that you'll return to your old job or level if you pass a six-month or one-year review.
Negotiate that "onboarding" program the same way you negotiate salary and benefits, says Eva Har-Even, a coach with executive consulting firm WJM Associates, in New York.
Be Realistic -- and Cordial
But Ms. Har-Even also advises clients to avoid the temptation to idealize the past. Make an effort to recall the negatives as well as the positives of your time at that employer. And do some research to ensure the company and the work environment are still as good as you remember.
The more time has passed, the more things might have changed. "You can't step into the same river twice," Ms. Har-Even says.
The increasingly warm welcome for boomerangs also holds a message for anyone getting ready to quit a job: Even if you don't think you would want to return, maintain your relationships and be courteous when you leave.
"It's kind of like a date," says Mr. Sugars of Action International. "The kiss goodnight is important."
Email your comments to cjeditor@dowjones.com.
Infiniti Officially Launched in China
November 8th, 2006Beijing, China - The Chinese introduction of the Infiniti Coupe concept car occurred earlier this month to make Infiniti's official debut in China. Sales are scheduled to begin next year, and Infiniti began recruiting car dealers late last year.
How Job Hunters Can Protect Themselves from Identity Theft
November 7th, 2006Online job boards have become hot spots for identity thieves.
The U.S. Federal Bureau of Investigation said in July that it is investigating a variety of cases involving online job scams. In one scenario the FBI cites, people are finding resumes posted online with Social Security numbers and other personal details, and using the information to apply for fake credit cards and loans in the job hunters' names. In another, people send a job hunter an email claiming to be from a recruiter or company seeking personal details for a pre-employment background check, and use the information for identity theft.
Margaret Davis, 36 years old, of Chicago, says she was a victim of identity theft in 2001. After applying for a position on a job board, she exchanged emails and had a phone interview with someone whom she thought was from a recruiting agency.
Ms. Davis opened the employment forms emailed to her as attachments and later noticed several attempts to hack into her personal computer. She traced them to the emails, she says, discontinued contact with the person, and reported the incident to the job board. But two years later, she says, she learned that around the time of the correspondence, her Social Security number had been stolen and used to rack up $3,600 through an online account with a large electronics retailer. She then reported the problem to a credit bureau and the police.
Ms. Davis says she was able to restore her credit. But identity-theft problems often aren't easy to resolve, so prevention -- by keeping personal information private and taking precautions to make sure you're dealing with legitimate companies and recruiters -- can save you money and time.
When you post a resume, clear it of personal information. Cyberthieves have been able to gain access to resume databases and troll for Social Security numbers and other personal information, such as where you live and your contact information, says Pam Dixon, executive director of the World Privacy Forum, a public interest research group in San Diego.
Some job boards offer posting options to keep your personal information anonymous, allowing users to check a box to "hide" contact information from employers. Ms. Dixon suggests keeping your name, address, date of birth and phone number hidden, and never posting your Social Security number or any other information that could help a criminal set up a bank or other customer account. On job board CareerBuilder.com, for example, if you "hide" all your contact information, employers can contact you only by email by choosing a "Send email" option.
Since scam artists have been known to post fake job ads, also remove personal information from resumes you submit to potential employers, says Ms. Dixon. Sometimes phony job postings can be spotted by checking for their misspellings and grammatical errors, she says. Ms. Dixon suggests creating a temporary phone number or email address for your job search.
Think twice before revealing personal information by email or phone. Con artists "phishing" for information through fake interviews may ask for, say, information such as your Social Security number or a scan of your driver's license or passport, says Ms. Dixon, and claim it will expedite the application process.
Jennifer Sullivan, spokeswoman for job board CareerBuilder.com, also cautions against providing your marital status, eye color or financial information such as bank-account or credit-card numbers.
Two popular phishing methods are asking job seekers to complete a pre-employment background check or to create a direct-deposit account with the company, according to John Kane, acting manager of the Internet Crime Complaint Center in Fairmont, W.Va., which is funded by the FBI, and run in partnership with the FBI and the National White Collar Crime Center. In most circumstances, you shouldn't agree to a background check until you have had an interview in person, or set up direct deposit until you've been hired.
There are legitimate work-at-home positions, as well as freelance and contract work, for which you may need to share personal information with an organization before meeting with hiring managers in person, but before you do, look for signals that it might not be above-board. You can start by searching on the company's name on the Better Business Bureau's Web site. Another helpful Web site is Lookstoogoodtobetrue.com, maintained by a joint federal law-enforcement and industry task force.
"The victim community tends to be very vocal in terms of warning people about scams," says Mr. Kane.
When Shelley Cardenas, 51, posted her resume on a large job board after her employer relocated from Fort Lauderdale, Fla., she received an email offering her a financial post -- though she hadn't applied for the job. When she did an online search for the name of the person who contacted her, nothing came up in affiliation with the company. The same thing happened when she searched online for the names of executives she found on the Web site the email cited. Growing skeptical, Mrs. Cardenas posted her concern on a Web site dedicated to exposing scams online, and a discussion participant sent her a link to user complaints on the site about the company. After receiving six emails that she suspects were scams via the same job board within two months, she pulled her resume from the job board.
"I think it's unfortunate in this day and age that there are so many people out there that just want to hurt other people," says Mrs. Cardenas.
If the company that contacts you appears to be a well-known employer, don't think you're in the clear. Criminals are copying company Web sites and tweaking the contact information or links, says Ms. Dixon of the World Privacy Forum. Although a Web site may look credible, do an Internet search of the company to make sure the URL of the official Web site matches the address the employer refers you to. If there's a mismatch, find the phone number of the company's corporate headquarters on the official Web site to verify that the hiring manager who contacted you is an employee.
-- Ms. Mattioli is an editorial assistant at CareerJournal.com.
America¡¯s Job Bank Gets Laid Off
November 7th, 2006The Labor Department sent a notice to state officials earlier this year saying the benefits of America¡¯s Job Bank "no longer outweigh the costs of operating and maintaining this system. Therefore, AJB will be phased out during the next 18 months and cease to be operational on June 30, 2007."
The notice argued that maintaining and improving the site no longer makes sense "given that AJB duplicates what is already available in the private sector."
That logic rings true to Peter Weddle, recruiting analyst and executive director of the International Association of Employment Web Sites industry group. Weddle says the Labor Department is wise to shutter America's Job Bank because it replicates services offered by a range of private-sector sites. These include sites targeted at lower-wage and blue-collar workers, says Weddle, whose association includes the major job boards CareerBuilder.com, Monster.com and Yahoo HotJobs.
"Why should the government duplicate what the private sector is providing already?" Weddle says.
But shutting down America¡¯s Job Bank will be a major blow to employers and job seekers, says Gerry Crispin, co-founder of job-site consulting firm CareerXroads. Crispin says the site has been a way to aggregate all the job postings of some 2,000 state employment offices around the country, giving smaller, local employers the ability to broadcast their jobs nationwide for free. And the AJB site is often used by lower-skilled people who turn to state employment offices, he says. Those people may have to rely on a fragmented network of state job sites or private-sector job boards that will not have all the job listings that employers currently give to America¡¯s Job Bank, Crispin says.
"We are basically losing a public resource that provides job seekers a more convenient and easy way to identify the employers who were local and had smaller budgets," he says.
America¡¯s Job Bank dates to 1995, and the free site currently lists more than 2.1 million jobs and more than 682,000 r¨¦sum¨¦s. But it has been criticized as difficult to use. The Labor Department said in a notice that the cost of operating AJB has been as high as $27 million a year, but that "AJB has not been able to keep up with private-sector job boards or industry standards regarding up-to-date technology."
The slated closure of America¡¯s Job Bank could force both companies and states to change the way they do business. Idaho, for example, enticed employers to list jobs on its state job bank with the promise that the listings would get on the better-known America¡¯s Job Bank site.
"We¡¯ve used the national distribution of job postings through AJB as a promotion," says Bob Fick, communications manager at the Idaho Commerce and Labor Department.
America¡¯s Job Bank also has been used by companies as a way to abide by the guidelines of the U.S. Equal Employment Opportunity Commission, Weddle wrote in an online newsletter last month.
"Because this site was operated in conjunction with state employment agencies and open to all U.S. citizens, posting an opening there was a de facto commitment by the organization to consider any qualified person, regardless of their race, ethnicity, age, gender, religion or sexual orientation," Weddle wrote. "The openings may have also been posted on other job boards or on the employer¡¯s own Web site, but as long as candidates from America¡¯s Job Bank were considered, the government was (usually) content that the company had made a conscientious effort at compliance."
An alternative for demonstrating a good-faith effort at EEOC compliance, Weddle wrote, is posting jobs on a variety of sites, including general-purpose employment sites and "diversity" sites such as those that specialize in candidates of a particular race.
The notice sent to state officials said that during the past two years, the Labor Department's Employment and Training Administration had reviewed and evaluated the ongoing viability of maintaining a national job site. "Since the launch of AJB, the number of private-sector Internet-based job boards (Career Builder, Monster, Yahoo! Hot Jobs, etc.) has proliferated, calling into question the need for a Federal government-sponsored job board," the notice said.
The notice, titled "The Phase Out of America¡¯s Job Bank," also said: "The cost of operating AJB has been as high as $27 million per year, with a current operating budget for maintenance-only of $12 million per year¡ . The cost to maintain AJB and constantly upgrade the foundational technology and make improvements to the site is no longer justifiable given that AJB duplicates what is already available in the private sector."
The notice said the Labor Department has developed an initial transition plan "to ensure that states and other entities, which currently utilize the AJB platform as part of their suite of services, are able to plan and make changes accordingly."
It also indicated that the federal government could contract with a private-sector employment Web site to create some kind of national job board in the future.
"The (Labor) Department recognizes there will be a periodic need for a national job board due to unique circumstances, such as the recent dislocations related to the hurricanes in the Gulf Coast," the notice said. "It is the Department¡¯s assessment that it will be more cost effective to contract for this type of service with the private sector on an ¡®as needed basis.¡¯ "
In addition to the notice, the Labor Department also sent state officials a set of questions and answers about the phase-out.
Workforce Management received copies of the two documents from Ted Daywalt, president of private-sector job board VetJobs. Daywalt said he received them from a contact who works in the U.S. Labor Department, and that the documents were sent to state officials. Daywalt declined to identify his contact.
The U.S. Labor Department confirmed the documents were authentic and sent to state workforce administrators in March. In a statement, the department also said a conference call on the subject was held with state workforce administrators on March 17. The department did not respond to a request for further comment.
Although the demise of AJB amounts to a headache for Idaho state officials, it is a relatively minor one, Fick says. Of greater concern, he says, are cutbacks in federal grants for programs such as unemployment insurance and workforce training. "It¡¯s another problem, but in a long list of problems," he says.
In Crispin¡¯s opinion, the loss of America¡¯s Job Bank adds to the economic insecurities faced by many Americans, and is likely the result of political lobbying.
"It¡¯s simple greed on the part of job boards and newspapers who have always feared that a free site will hurt them," he says.
Weddle, though, says he had no knowledge that the decision to close America's Job Bank was based on any lobbying. He also noted that there still are other free job-posting sites, such as Craigslist.
Weddle gives the government credit for launching the site more than a decade ago and helping to spark the online job board field. "It was so successful that it spawned a $2 billion industry," he says.
China to provide 500,000 USD for human resource development in Central Asia
November 6th, 2006China will give half a million U.S. dollars to Central Asian countries to support their human resources development, said China's Vice Finance Minister Li Yong.
The money will come from the Regional Cooperation and Poverty Reduction Fund (RC Fund) set up by China at the Asian Development Bank (ADB), said Li at the Ministerial Conference on Central Asia Regional Economic Cooperation (CAREC) in Urumqi.
"China actively supports regional economic cooperation in Central Asia," said Li.
China provides technological aid for the area's agricultural development, environmental protection and capacity building through the RC Fund, and supports cooperation in prevention and control of AIDS and bird flu, said Li.
China is committed to providing 20 million U.S. dollars to Central Asian countries between 2005 and 2009. It established the RC Fund last March to promote regional cooperation in reducing poverty among the developing member countries of the ADB.
In June 2004, China gave Kyrgyzstan 60 million yuan (7.5 billion U.S. dollars) in aid to build a 937-kilometer highway linking the country with China and Uzbekistan.
From 2006 to 2008, the ADB, together with the European Bank for Reconstruction and Development, the International Monetary Fund, the Islamic Development Bank, the United Nations Development Program and the World Bank, will invest 2.3 billion U.S. dollars in regional transport, energy and trade infrastructure in Central Asia, with 1.4 billion coming from the ADB.
Created by the ADB in 1997, CAREC is a regional cooperation mechanism focusing on transport, trade and energy initiatives that are critical to the economic performance of the region.
It is also financing infrastructure projects in order to improve living standards and reduce poverty in CAREC countries.
Source: Xinhua
China-Africa trade expected to top US$100 bln
November 6th, 2006China and Africa should fully tap cooperation potential and strive to bring their trade volume to US$100 billion by 2010, Premier Wen Jiabao proposed here Saturday afternoon at the High-level Dialogue and 2nd Conference of Chinese and African Entrepreneurs.
The figure will more than double the 2005 level, about $39.7 billion. In the first nine months, China-Africa trade surged to $40.6 billion, up 42% year-on-year.
"Although China's trade has been running a deficit against Africa in recent years, China still hopes to further expand its import from African countries," Wen said.
At the opening ceremony Saturday morning of the Beijing Summit of Forum on China-Africa Cooperation, Chinese President Hu Jintao made fresh pledges to facilitate bilateral trade and cooperation, saying China will double its aid to Africa by 2009, increase from 190 to over 440 the number of tariff-free import items from the least developed African countries having diplomatic ties with China.
China will also provide 3 billion dollars in preferential loans and $2 billion of export credits over the next three years and establish a special fund of $5 billion to encourage Chinese investment in Africa.
Calling these measures "pragmatic and simulative," Wen made five proposals to entrepreneurs from both and Africa.
He said both sides should work closer in service sectors, tourism, finance and telecommunications in particular, to cultivate new economic growth points and facilitate trade in a more balanced and healthier manner.
Wen said China would encourage capable and reputed indigenous companies to invest in Africa and spread their technology and management experiences. "We will also encourage capable Chinese companies to invest in the trade and economic cooperation zones inAfrica," he said.
"African companies interested in investing in China are welcome," Wen said.
Nortel ramps up China R&D staff
November 6th, 2006Beijing — After two years of slashing jobs at home, Nortel Networks Corp. has revealed another big increase in its engineering staff in China, accelerating a trend that has seen it shifting to lower-cost countries for its manufacturing and R&D.
Nortel disclosed Thursday that its R&D staff in China has grown by almost 30 per cent in the past year. The company now has about 1,800 research and development employees in China, compared with about 1,400 last year. This means that China now accounts for 15 per cent of Nortel's worldwide R&D jobs, up from 12 per cent last year.
Canadian politicians have criticized Nortel for shifting jobs overseas. The company announced in 2004 that it was cutting 950 jobs in Canada, including a large number at its R&D headquarters in Ottawa. It announced another 1,900 job reductions worldwide this year, and some of those job losses will be in Canada.
Four months ago, in another cost-cutting move, Nortel shifted its procurement office from Ottawa to Hong Kong. And within three years it plans to buy 80 per cent of its components and materials from low-cost countries, primarily in the developing world, compared with 30 per cent last year. The company has announced that it is adding about 800 new jobs in two low-cost countries — Mexico and Turkey — by 2008.
“China is becoming much more important for Nortel — not just in revenues but also in employment, as an R&D centre,” Nortel chief executive officer Mike Zafirovski said Thursday at the official opening of its new China headquarters in Beijing. “We have more and more operational responsibilities for all of Asia now being handled out of Beijing. It's a very good commitment to China but also very smart from a Nortel perspective.”
He would not rule out the possibility of further job cuts in North America as the company focuses more on opportunities in the developing world.
“We are not as competitive as we need to be,” he said. “Our costs are not at world-class levels, but they will be. Nothing will stop us in our pursuit of being the most competitive enterprise out there.”
Most of the planned cost savings, however, are likely to be from efficiencies such as better on-time delivery and improved systems, rather than shifting jobs to low-cost countries, he said.
The state-of-the-art office in Beijing is an example of the trend toward low-cost countries. With 180,000 square feet of space in the high-tech Wangjing industrial zone, the gleaming glass-and-steel campus is making it easier for Nortel to recruit China's new generation of R&D engineers. About 1,000 of its 1,800 R&D staff are based at the new Beijing campus, which was built as part of a $200-million investment announced in China in 2003.
China is also an increasingly important centre for Nortel's operations in Asia. A growing share of its Asian executives and R&D staff are based in China with a mandate to serve all of Asia. “We're utilizing the skills here for the benefit of Asia,” said Michael Pangia, president of Nortel's Asia division.
As it expands its operations here, Nortel is hoping for steady revenue growth from China, which accounts for the biggest share of the Asian division that now provides almost 14 per cent of Nortel's global revenue. China is also likely to benefit from Nortel's plans for greater investment in Asia.
“China would be a logical place for that to happen,” Mr. Zafirovski said Thursday. “We view China to be a major growth opportunity. We'd love to be twice as big in China.”
Intel to train 1 million Chinese teachers
November 3rd, 2006Chinanews, Beijing, November 3 ¨C Intel announced yesterday that it will help train 1 million Chinese teachers in the field of information technology to enable them to improve their teaching quality.
Intel has already helped with the training of about 72 thousand Chinese teachers and a large number of undergraduates.
This is Intel¡¯s biggest educational project ever, which will work as a supplement to its current educational cooperation program with the Ministry of Education.
Besides the training project, Intel will donate 10,000 PCs to schools in Chinese rural areas. With the help of Microsoft software and the effort of the MOE, all these PCs will be able to get access to the Internet before 2008. MOE will also provide courseware programs to these schools.
¡°Now our cooperation with the MOE is complete,¡± said Craig Barrett, CEO of Intel. Wu Qidi, Vice Minister of Education, was vocal in expressing China gratitude to the company.
Sound monetary policy remains key
November 3rd, 2006China will continue to pursue a sound monetary policy, which will be more closely linked to its industry, taxation and foreign exchange policies, a top central bank official said Thursday."
In order to maintain stable and healthy national economic growth, we will continue to stick to a sound monetary policy," Su Ning, deputy governor of the People's Bank of China, said yesterday.
"And we will seek more and effective co-ordination with industry, taxation and foreign exchange policies when drafting our monetary policies," the deputy central bank governor said, without elaborating.
The central bank would continue, as it did before, to employ a host of measures to curb expansive money supply and credit growth.
The measures may include open market operations, as well as interest rate and bank reserve ratio adjustment, Su told the BusinessWeek CEO Forum in Beijing.
The central bank has so far raised the interest rate twice and bank reserve ratio deposits that commercial banks are required to make with the central bank once this year in a bid to cool the sizzling economy.
Su said that macroeconomic tightening measures had already succeeded in reining in red-hot economic growth.
The Chinese economy grew 10.9 per cent in the first half of this year, with this growth slowing to 10.4 per cent in the third quarter.
But the economy still faces several challenges if it is to maintain robust yet healthy growth, Su said, pointing to slumping consumption, the soaring trade surplus and escalating fixed-assets investment.
The overall proportion of consumer spending in the national economy has been on a downward spiral for some time, which may pose problems for economic development, Su told the forum.
The proportion, Su said, has slid from 62 per cent in the 1980s to 52 per cent last year.
Problems related to the international balance of payments remain serious, with the foreign trade surplus continuing to soar this year, he said.
And the risk still remains that fixed-assets investment, which is "still bigger than it should be," may rebound again, as local governments and enterprises continue to invest more money in projects, the deputy central bank governor said.
China's fixed-assets investment grew by a spectacular 29.8 per cent in the first half of this year and increased 27.3 per cent in the first nine months of 2006.
The central bank, Su said, will put expanding domestic consumption high on its policy agenda.
The bank will also work to improve the credit structure, Su said.
Google seen setting up China joint venture with Ganji.com by yrend - report
November 3rd, 2006BEIJING (XFN-ASIA) - Google Inc is expected to set up a new China joint venture with Ganji.com by the end of the year, in order to qualify under Chinese rules governing Internet Content Provider (ICP) licensing, Sina.com reported, citing an unidentified source.
The two companies have already started recruiting staff for the joint venture, the report said.
The rules bar foreign companies from providing Internet services in China without an ICP license.
Google has a partnership with Ganji.com, using the latter's ICP license to operate the Google.cn service in China.
Skilled labor shortage in China
November 3rd, 2006U.S. companies in China continue to make some nice profits, but they are increasingly finding that it's difficult to staff their operations there with qualified workers. Ruth Kirchner reports.
SCOTT JAGOW: U.S. companies in China have a staffing problem: They can't find the right people to work for them. Ruth Kirchner reports from Beijing.
--------------------------------------------------------------------------------
RUTH KIRCHNER: For the first time in five years, the skills shortage has emerged as the No. 1 headache for companies doing business in China.
The American Chamber of Commerce says recruiting and retaining capable Chinese managers has become a real problem. Even finding suitable entry-level staff is difficult.
Most experts put the blame squarely on the Chinese education system which does not teach independent thinking or real-world skills.
Andrew Grant of McKinsey says China's university system needs a radical overhaul .
ANDREW GRANT: "A lot of learning is very individual in the Chinese system. There's not a lot of learning in teams, which again is much more akin to real life and what we particularly see in business where you're solving problems in teams".
Grant says the universities churn out millions of graduates every year, but only a tiny fraction has the skills to work for international companies.
In Beijing, I'm Ruth Kirchner for Marketplace.
Recruitment firms boost investment in China
November 2nd, 2006Recruitment companies have increased their investments in China, according to a new study by the1, merger and acquisition (M&A) specialists for the human capital sector. The study identified a cumulative total of 156 investments in China by 106 foreign recruitment or human-capital groups over a 20-year period.
China as a whole - including deals made in Hong Kong - has seen a steady rise in the number of investments over the years. It saw a 70% boost in investments, from 40 transactions in the 1995-99 period to 68 in the post-2000 period.
However, the growth was faster (132%) for investments in mainland China (58 post-2000 versus 25 in the prior period), the first empirical evidence that foreign human-capital companies have stepped up their investment on the mainland.
"China is the human-capital sector's number [one] opportunity long-term," said Mark Dixon, a director of the1. "With a population of 1.3 billion, you don't have to be a rocket scientist to do the math. It's a numbers game, with some very big numbers."
Explaining this shift in investor attitude, Dixon said, "People have been aware of the potential of the Chinese job market but most viewed 'M&A for people businesses' as too theoretical - the country, the culture and the prospect of profits all being too far off.
"But now we now seem to have passed a tipping point. Although the Chinese recruitment industry is nascent and impeded by red tape, profits are already being made. This has negated the old excuse in the industry that China should be left as a challenge for the next generation."
Commenting on the maturity of the investment flow, Dixon said, "We haven't entered a land-grab phase yet. In coming years, investors will move on from toe-hold investments to building national brands and large office networks across China. We'll see them pour in real capital.
"Larger recruitment groups are starting to feel pressure from clients, institutional investors and boardrooms," he said. "The result is clear. The attitude to China is moving from opportunity to obligation. Obsession may not be far away."
Hong Kong
Hong Kong, which saw most of the early investment, has been receiving less attention. It attracted 10 transactions post-2000, compared with the 58 on the mainland during the same period. Hong Kong now is viewed more as a market in its own right rather than as the gateway to China. Companies wanting to capitalize on "the China opportunity" are discovering they need to be in China proper.
Cumulatively, Hong Kong has received 51 deals, compared with 105 on the mainland. Before Britain handed Hong Kong back to China in July 1997, the small territory attracted more human-capital-sector investments (53%) than the entire mainland. It is no longer where the action is. After the handover, a period that coincided with an investment flow into China from many countries and industries, the balance has switched - mainland China has attracted 82% of all deals.
This move inland is even seen among the pre-handover investors in Hong Kong themselves, who made 35 deals. Some 77% of these groups have subsequently expanded into mainland China.
Commenting on this trend, Dixon said, "Hong Kong used to be King Kong - the 800-pound gorilla on the Chinese human-capital stage, a sort of bouncer standing outside the stage door of China. Kong has now gone, at least in that capacity."
Legal structures used
A range of different legal structures is being used by investors to operate in China, some on a solo basis and some with partners.
More than half (55%) of the investments involve the foreign company setting up a new subsidiary in China. This compares with 28% of investments in the form of representative offices. Just 17% are new joint ventures with a local partner or the partial acquisition of an existing local company (which results in effect in a joint venture after the transaction).
Regulations have allowed 100% foreign ownership of some categories of human-capital investment, notably human-resources consulting, rather than headhunting or recruitment, which have found it difficult to get licenses at any level of ownership.
Since October 2000, rules have been loosened, allowing 49% foreign participation of all categories. Joint ventures are thus becoming more popular. Just 17% of the total investment count for all periods, joint ventures accounted for 35% of investments since 2002 compared with a negligible 9% prior.
Heidrick & Struggles Reports Third Quarter 2006 Financial Results
November 1st, 2006Consolidated net revenue of $124.6 million increased 13.7 percent from $109.6 million in the 2005 third quarter. The positive impact of changes in foreign currency exchange rates in the quarter, primarily in Europe, represented 1.8 percentage points of the growth. Net revenue grew 4.1 percent in the Americas, 23.4 percent in Europe (18.2 percent on a constant currency basis) and 42.8 percent in the Asia Pacific region. The total number of confirmed executive searches increased seven percent from the 2005 third quarter, and decreased seven percent sequentially, compared to the 2006 second quarter. The number of consultants increased to 343 as of September 30, 2006, compared to 335 at June 30, 2006, and 306 at September 30, 2005. Productivity, as measured by annualized revenue per executive search consultant, remained strong at $1.4 million and the average fee per executive search increased to $108,100.
Operating income was $17.6 million, representing an operating margin (measured as a percentage of net revenue) of 14.1 percent. This compares to operating income of $12.9 million in the 2005 third quarter. Excluding restructuring charges in both periods, which management believes more appropriately reflects core operations, operating income in the 2006 third quarter was $17.4 million and the operating margin was 14.0 percent, compared to 2005 third quarter operating income of $14.5 million and an operating margin of 13.3 percent. The year-over-year improvements in operating income and operating margin reflect continued efforts by the company to improve its operating cost structure, as well as the increase in operating leverage inherent in the company's business model at higher net revenue levels.
Kevin Kelly, chief executive officer, said, "We are pleased with the solid results achieved in the third quarter and for the first nine months of 2006 and believe that we are in a good position to meet our objectives for revenue growth and profitability for 2006. We welcomed the employees of Highland Partners on October 2 and we are actively managing a comprehensive plan for their integration, where the focus is on realizing revenue and operating synergies."
Net income in the 2006 third quarter was $11.2 million and diluted earnings per share were $0.60, reflecting an effective tax rate of 41.9 percent. Comparisons to third quarter 2005 net income of $30.4 million and diluted earnings per share of $1.58 are not meaningful as those results reflected a significant non-cash tax benefit as a result of reversing a portion of the valuation allowance on certain U.S. deferred tax assets.
Consolidated salaries and employee benefits expense was $83.7 million, an increase of 17.4 percent from $71.3 million in the comparable quarter of 2005. As a percentage of net revenue, salaries and employee benefits were 67.2 percent for the quarter, compared to 65.0 percent in the year-ago period. The increase in compensation-related expenses in the 2006 third quarter is primarily a function of an increase in the number of consultants added during the last year, and also reflects higher bonus accruals based on the year-over- year increase in net revenue levels. Total stock-based compensation expense was $7.1 million during the quarter, including $0.7 million in stock option expense, compared to $3.9 million in last year's third quarter.
Consolidated general and administrative expenses were $23.5 million, down 0.9 percent from $23.7 million reported in the comparable prior year period. As a percentage of net revenue, consolidated general and administrative expenses declined to 18.9 percent from 21.7 percent in the 2005 third quarter. The improvement reflects a continued focus on cost control, and operating leverage from higher revenue levels.
The company was limited from repurchasing any of its common stock during the third quarter due to the discussions with Hudson Highland Group to acquire Highland Partners. As of September 30, 2006, $40.9 million remains authorized under the current $50 million stock repurchase program authorized in May 2006.
Regional Review for the 2006 Third Quarter
The Americas reported net revenue of $67.9 million, up 4.1 percent over the third quarter of 2005. The Consumer, Financial Services and Industrial groups were the largest contributors to revenue in this region. Operating income of $14.9 million was up 2.8 percent over last year's third quarter. The 2006 third quarter operating margin was 22.0 percent compared to 22.3 percent last year, primarily reflecting higher fixed compensation cost related to increased consultant hiring in the last year. Consultant headcount in the Americas was 182 at September 30, 2006, an increase of 24 consultants since September 30, 2005.
In Europe, net revenue of $42.3 million increased 23.4 percent from the prior-year quarter, driven by strong performance in the Financial Services, Consumer and Industrial groups. On a constant currency basis, year-over-year net revenue growth in Europe would have been 18.2 percent. Operating income of $5.9 million increased 57.4 percent from last year's third quarter and the operating margin improved to 13.8 percent from 10.9 percent in last year's third quarter, reflecting continued cost containment initiatives and higher revenue levels. Consultant headcount in Europe was 121 at September 30, 2006, an increase of 14 consultants since September 30, 2005.
In Asia Pacific, record net revenue of $14.5 million increased 42.8 percent from the prior year quarter, driven by continued strong business across the region with especially strong growth in the Financial Services, Industrial, and Consumer industry groups. Operating income of $4.5 million was up 68.3 percent over last year's third quarter and the operating margin of 30.7 percent increased from 26.1 percent in last year's third quarter. Consultant headcount in the Asia Pacific region was 40 at September 30, 2006, compared to 41 consultants at September 30, 2005.
Nine Month Results
For the nine months ended September 30, 2006, net revenue was $346.3 million, an 11.1 percent increase from $311.6 million in the first nine months of 2005. The effect of changes in foreign currency exchange rates on nine-month revenue results was negligible. Operating income in the first nine months of 2006 was $41.5 million, representing an operating margin of 12.0 percent, compared to operating income in the first nine months of 2005 of $11.5 million. Excluding restructuring charges in both periods, operating income for the first nine months of 2006 was $41.9 million and the operating margin was 12.1 percent, compared to operating income of $33.9 million in the 2005 period with a 10.9 percent operating margin. Net income for the first nine months of 2006 was $27.5 million and diluted earnings per share were $1.45, reflecting an effective tax rate of 40.3 percent. For the comparable period of 2005 net income of $32.3 million and diluted earnings per share of $1.62 included $22.4 million in restructuring charges and a non-cash tax benefit resulting from the reversal of a portion of the company's valuation allowance on certain U.S. deferred tax assets.
2006 Annual Outlook Reflects Acquisition of Highland Partners' Assets
The company has revised its 2006 annual guidance to reflect the integration of Highland Partners' operations. For 2006, the company expects net revenue of between $465 million and $475 million, representing growth over 2005 net revenue of between 12.8 percent and 15.2 percent. The company expects the 2006 full-year operating margin to be in the range of 11 percent and 12 percent, reflecting the timing of spending associated with the integration, and the amortization of cash and equity retention bonuses for the former Highland consultants. Net income and earnings per share are expected to reflect a full-year effective tax rate of approximately 40 percent. The quarterly and full-year tax rate estimates can be significantly impacted by country-level results and can vary significantly by reporting period, as well as by discrete items that require immediate recognition in a particular quarter.
Kelly added, "Looking beyond 2006, we are very excited about opportunities for accelerating profitable revenue growth. We have invested in the past year in strategic hiring and in our acquisition of Highland Partners, and we are committed to maximizing our return on those investments, which in turn should enhance our market leadership position around the world. In addition, we will be driven to find innovative ways to build upon our established executive search experience, to expand the distribution of our intellectual capital, to leverage our C-suite relationships through new partnerships, and to enhance our service offerings. Working closely together as one global firm, our common goal is to optimize how we service our clients in helping them to build world-class leadership teams."
Quarterly Conference Call
About Heidrick & Struggles International, Inc.
Safe Harbor Statement
This press release contains forward-looking statements. The forward- looking statements are based on current expectations, estimates, forecasts and projections about the industry in which we operate and management's beliefs and assumptions. Forward-looking statements may be identified by the use of words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "projects," "forecasts," and similar expressions. Forward-looking statements are not guarantees of future performance and involve certain known and unknown risks, uncertainties and assumptions that are difficult to predict. Actual outcomes and results may differ materially from what is expressed, forecasted or implied in the forward-looking statements. Factors that may affect the outcome of the forward-looking statements include, among other things: our ability to attract and retain qualified executive search consultants; the condition of the economies in the United States, Europe, or elsewhere; social or political instability in markets where we operate; the impact of foreign currency exchange rate fluctuations; price competition; the ability to forecast, on a quarterly basis, variable compensation accruals that ultimately are determined based on the achievement of annual results; delays or difficulties in integrating the Highland Partners search operations; an inability to achieve the planned cost savings from our cost-reduction initiatives; an inability to sublease or assign unused office space; our ability to realize our tax loss carryforwards; the timing of any deferred tax asset valuation allowance reversals; the mix of profit and loss by country; an impairment of our goodwill and other intangible assets; and delays in the development and/or implementation of new technology and systems. Our reports filed with the U.S. Securities and Exchange Commission also include information on factors that may affect the outcome of forward-looking statements. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Heidrick & Struggles International, Inc. Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) Three Months Ended September 30, 2006 2005 $ Change % Change Revenue: Revenue before reimbursements (net revenue) $124,636 $109,605 $15,031 13.7% Reimbursements 6,268 4,339 1,929 44.5% Total revenue 130,904 113,944 16,960 14.9% Operating expenses: Salaries and employee benefits 83,697 71,291 12,406 17.4% General and administrative expenses 23,525 23,732 (207) -0.9% Reimbursed expenses 6,268 4,393 1,875 42.7% Restructuring charges (149) 1,580 (1,729) Total operating expenses 113,341 100,996 12,345 12.2% Operating income 17,563 12,948 4,615 35.6% Non-operating income (expense): Interest income 1,412 1,539 Interest expense (18) (18) Net realized and unrealized gains on equity and warrant portfolio 319 426 Other, net (83) 43 Net non-operating income 1,630 1,990 Income before income taxes 19,193 14,938 Provision for (benefit from) income taxes 8,042 (15,458) Net income $11,151 $30,396 Basic earnings per common share $0.64 $1.63 $(0.99) NM Basic weighted average common shares outstanding 17,462 18,694 (1,232) -6.6% Diluted earnings per common share $0.60 $1.58 $(0.98) NM Diluted weighted average common shares outstanding 18,455 19,269 (814) -4.2% Salaries and employee benefits as a percentage of net revenue 67.2% 65.0% 2.2% General and administrative expense as a percentage of net revenue 18.9% 21.7% -2.8% Operating income as a percentage of net revenue 14.1% 11.8% 2.3% Operating income as a percentage of net revenue (excluding restructuring) 14.0% 13.3% 0.7% Effective tax rate 41.9% NM NM Heidrick & Struggles International, Inc. Segment Information (In thousands) Three Months Ended September 30, 2006 2005 Margin Margin 2006 2005 $ Change % Change * * Revenue: Americas $67,855 $65,181 $2,674 4.1% Europe 42,278 34,267 8,011 23.4% Asia Pacific 14,503 10,157 4,346 42.8% Revenue before reimbursements (net revenue) 124,636 109,605 15,031 13.7% Reimbursements 6,268 4,339 1,929 44.5% Total revenue $130,904 $113,944 $16,960 14.9% Operating Income: Americas $14,919 $14,511 $408 2.8% 22.0% 22.3% Europe 5,852 3,718 2,134 57.4% 13.8% 10.9% Asia Pacific 4,456 2,648 1,808 68.3% 30.7% 26.1% Total regions 25,227 20,877 4,350 20.8% 20.2% 19.0% Corporate (7,813) (6,349) (1,464) -23.1% Operating income before restructuring charges 17,414 14,528 2,886 19.9% 14.0% 13.3% Restructuring charges 149 (1,580) 1,729 Operating income $17,563 $12,948 $4,615 * Margin based on revenue before reimbursements (net revenue). Heidrick & Struggles International, Inc. Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) Nine Months Ended September 30, 2006 2005 $ Change % Change Revenue: Revenue before reimbursements (net revenue) $346,290 $311,560 $34,730 11.1% Reimbursements 16,835 15,735 1,100 7.0% Total revenue 363,125 327,295 35,830 10.9% Operating expenses: Salaries and employee benefits 234,841 207,257 27,584 13.3% General and administrative expenses 69,529 70,375 (846) -1.2% Reimbursed expenses 16,835 15,735 1,100 7.0% Restructuring charges 406 22,417 (22,011) Total operating expenses 321,611 315,784 5,827 1.8% Operating income 41,514 11,511 30,003 260.6% Non-operating income (expense): Interest income 4,666 3,960 Interest expense (39) (359) Net realized and unrealized gains on equity and warrant portfolio 434 230 Other, net (534) 1,161 Net non-operating income 4,527 4,992 Income before income taxes 46,041 16,503 Provision for (benefit from) income taxes 18,574 (15,786) Net income $27,467 $32,289 Basic earnings per common share $1.52 $1.70 $(0.18) NM Basic weighted average common shares outstanding 18,024 18,957 (933) -4.9% Diluted earnings per common share $1.45 $1.62 $(0.17) NM Diluted weighted average common shares outstanding 18,957 19,886 (929) -4.7% Salaries and employee benefits as a percentage of net revenue 67.8% 66.5% 1.3% General and administrative expense as a percentage of net revenue 20.1% 22.6% -2.5% Operating income as a percentage of net revenue 12.0% 3.7% 8.3% Operating income as a percentage of net revenue (excluding restructuring) 12.1% 10.9% 1.2% Effective tax rate 40.3% NM NM Heidrick & Struggles International, Inc. Segment Information (In thousands) Nine Months Ended September 30, 2006 2005 Margin Margin 2006 2005 $ Change % Change * * Revenue: Americas $191,766 $179,060 $12,706 7.1% Europe 118,141 102,679 15,462 15.1% Asia Pacific 36,383 29,821 6,562 22.0% Revenue before reimbursements (net revenue) 346,290 311,560 34,730 11.1% Reimbursements 16,835 15,735 1,100 7.0% Total revenue $363,125 $327,295 $35,830 10.9% Operating Income: Americas $40,775 $39,174 $1,601 4.1% 21.3% 21.9% Europe 12,614 5,789 6,825 117.9% 10.7% 5.6% Asia Pacific 9,926 7,389 2,537 34.3% 27.3% 24.8% Total regions 63,315 52,352 10,963 20.9% 18.3% 16.8% Corporate (21,395) (18,424) (2,971) -16.1% Operating income before restructuring charges 41,920 33,928 7,992 23.6% 12.1% 10.9% Restructuring charges (406) (22,417) 22,011 Operating income $41,514 $11,511 $30,003 * Margin based on revenue before reimbursements (net revenue). Heidrick & Struggles International, Inc. Condensed Consolidated Balance Sheets (In thousands) September 30, December 31, 2006 2005 (Unaudited) Current assets: Cash and cash equivalents $137,399 $203,689 Short-term investments 60,000 - Accounts receivable, net of allowance for doubtful accounts 84,570 53,334 Other receivables 5,181 4,463 Prepaid expenses 10,614 8,178 Income taxes recoverable, net 5,777 3,536 Deferred income taxes, net 7,090 8,579 Total current assets 310,631 281,779 Non-current assets: Property and equipment, net 18,413 21,104 Assets designated for retirement and pension plans 29,807 26,727 Investments 3,173 1,839 Other non-current assets 6,465 5,216 Goodwill 47,717 46,655 Other intangible assets, net 5,831 6,239 Deferred income taxes, net 22,001 21,363 Total non-current assets 133,407 129,143 Total assets $444,038 $410,922 Current liabilities: Accounts payable $5,293 $6,019 Accrued salaries and employee benefits 111,516 84,169 Other accrued liabilities 28,996 25,314 Current portion of accrued restructuring charges 3,279 6,313 Total current liabilities 149,084 121,815 Non-current liabilities: Retirement and pension plans 35,442 31,446 Non-current portion of accrued restructuring charges 10,287 12,297 Other non-current liabilities 8,231 7,879 Total non-current liabilities 53,960 51,622 Stockholders' equity 240,994 237,485 Total liabilities and stockholders' equity $444,038 $410,922 Heidrick & Struggles International, Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three Months Ended September 30, 2006 2005 Cash flows from operating activities: Net income $11,151 $30,396 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,289 2,672 Deferred income taxes 303 (18,512) Net realized and unrealized gains on equity and warrant portfolio (319) (426) Stock-based compensation expense, net 7,100 3,947 Restructuring charges (149) 1,580 Cash paid for restructuring charges (1,006) (8,546) Changes in assets and liabilities: - Trade and other receivables (6,207) 850 Accounts payable 363 (548) Accrued expenses 29,760 27,308 Income taxes recoverable and payable, net 1,069 542 Other assets and liabilities, net (52) (975) Net cash provided by operating activities 44,302 38,288 Cash flows from investing activities: Capital expenditures (2,229) (1,343) Proceeds from sales of equity securities 532 456 Payments to consultants related to sales of equity securities (413) (198) Proceeds from sales of short-term investments 12,501 20,050 Purchases of short-term investments (22,501) (10,050) Other, net 17 71 Net cash provided by (used in) investing activities (12,093) 8,986 Cash flows from financing activities: Proceeds from stock options exercised 1,239 2,590 Purchases of treasury stock (3,924) - Excess tax benefits and accruals related to stock-based compensation 507 - Other (68) - Net cash provided by (used in) financing activities (2,246) 2,590 Effect of foreign currency exchange rates on cash and cash equivalents (2,329) 371 Net increase in cash and cash equivalents 27,634 50,235 Cash and cash equivalents: Beginning of period 109,765 83,676 End of period $137,399 $133,911 Supplemental schedule of noncash financing activities: Total value of treasury stock purchases $- $- Cash paid for treasury stock purchases (3,924) - Change in accrued treasury stock purchases $(3,924) $- Heidrick & Struggles International, Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited) Nine Months Ended September 30, 2006 2005 Cash flows from operating activities: Net income $27,467 $32,289 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 7,361 8,628 Deferred income taxes 850 (16,366) Net realized and unrealized gains on equity and warrant portfolio (434) (230) Stock-based compensation expense, net 18,271 10,074 Restructuring charges 406 22,417 Cash paid for restructuring charges (5,450) (28,625) Changes in assets and liabilities: Trade and other receivables (29,932) (23,680) Accounts payable (849) (5,182) Accrued expenses 25,485 31,188 Income taxes recoverable and payable, net (2,393) (11,485) Other assets and liabilities, net (1,409) (5,043) Net cash provided by operating activities 39,373 13,985 Cash flows from investing activities: Capital expenditures (3,556) (4,468) Proceeds from sales of equity securities 929 1,769 Payments to consultants related to sales of equity securities (625) (18,202) Proceeds from sales of short-term investments 72,500 176,925 Purchases of short-term investments (132,500) (112,600) Other, net 64 112 Net cash provided by (used in) investing activities (63,188) 43,536 Cash flows from financing activities: Proceeds from stock options exercised 4,023 8,050 Purchases of treasury stock (49,460) (27,498) Excess tax benefits and accruals related to stock-based compensation 2,289 - Other 247 - Net cash used in financing activities (42,901) (19,448) Effect of foreign currency exchange rates on cash and cash equivalents 426 (2,590) Net increase (decrease) in cash and cash equivalents (66,290) 35,483 Cash and cash equivalents: Beginning of period 203,689 98,428 End of period $137,399 $133,911
Heidrick & Struggles International, Inc.
China's GDP to grow by 7.5 pct annually
November 1st, 2006China's gross domestic product (GDP) is expected to grow by about 7.5 percent annually in the next five years, said Ma Kai, Minister of the National Development and Reform Commission (NDRC), on Monday.
Ma told the World Industrial and Commercial Organizations Forum in Beijing that GDP would reach 3.2 trillion U.S. dollars under the current foreign exchange rate.
He said the macro-control policies had started to take effect this year, while the consumer price index (CPI) remained very low.
In the first nine months, GDP grew at 10.7 percent, down 0.2 of a percentage point from the first half, and CPI stood at 1.3 percent, down 0.7 of a percentage point from the previous year.
Ma said the government would further strengthen macro-control efforts by implementing more stringent financial and monetary policies and using administrative means.
"China will strive to make its economy to grow in a more healthy way by focusing on reining in the fast growing investment, loans and trade surplus."
He also said the booming economy would create new jobs for 45 million urban people and migrant workers between 2006 and 2010.
The government would further strive to reduce the widening income gap. The per capita net income of urban people would rise to 13,390 yuan (1,699 U.S. dollars) in 2010 from 10,493 yuan (1,332 U.S. dollars) in 2005, while that of rural people would rise to 4,150 yuan (527 U.S. dollars) from 3,255 yuan (413 U.S. dollars).
Renewed focus of trade
October 31st, 2006The adjustment of customs duties that is to take effect tomorrow marks a significant change in the way China prioritizes its trade sector.
As a fast-developing economy, China has benefited tremendously from its export-led growth during most of the past quarter of a century. However, no longer will the country put trade growth before everything.
The Ministry of Finance recently announced that the country decided to impose temporary tariffs on 110 exported goods and cut tariffs on 58 imported products since the beginning of November.
Clearly, this move shows that the Chinese authorities now attach more importance to external trade balance and domestic industrial restructuring than merely double-digit trade growth.
On the one hand, the hike of export taxes and the cut in import duties will definitely put a drag on the country's soaring trade surplus.
Along with China's rise as a global manufacturing power in recent years, value-added processing trade fueled by an accelerated inflow of foreign direct investment has hugely inflated the country's trade surplus.
In the first nine months of this year, the country's imports and exports increased by nearly one-fourth to hit US$1.27 trillion, generating a trade surplus of US$109.85 billion. This three-quarter net export exceeded that record-high annual trade surplus of US$102 billion in 2005, which had already more than tripled the US$32 billion in the previous year.
Given intensifying trade tensions with major trade partners like the United States and the European Union, which suffer a huge trade deficit with China, it is fairly reasonable for the Chinese Government to rein in the rapid growth of the trade surplus.
Such efforts will both help reduce imbalances in global trade and ease pressure a soaring trade surplus and inflow of foreign investment exert on the country's monetary policy. The Chinese central bank has been trying to squeeze the credit supply to cool down economic growth, but a ballooning foreign exchange reserve has kept pumping liquidity into the domestic market.
On the other hand, by controlling the export of goods, the production of which involves the mass consumption of energy and resources as well as heavy pollution, the Chinese Government is sending a clear-cut signal to domestic industries that they must bid farewell to the extensive growth pattern for now.
In the past, as long as the trade sector could serve as a growth engine by creating jobs and a trade surplus, local governments did not pay much attention to the environment and resource costs of extensive trade growth.
Nonetheless, as the country is shifting away from a growth strategy that stresses speed towards a new one that focuses on sustainability, the country's trade pattern also needs to undergo a fundamental change.
A customs duty that discourages energy-and-resource-intensive export is a needed step to push domestic enterprises to raise their energy efficiency and environmental awareness.
China Daily
China's biggest air show set to open
October 30th, 2006ZHUHAI, China The world's major aircraft makers gather this week for China's biggest air show, looking to the booming Chinese market to drive sales in coming decades as their industry's growth elsewhere slows.
Boeing, Airbus and companies from 18 other countries including Russia and Brazil are displaying aircraft, radar equipment and other technology at the five-day show, which opens Tuesday in this southern town near Hong Kong.
China is expected to be the fastest- growing market for commercial aircraft over the next two decades. Boeing said last week that it expected carriers to purchase 2,900 new planes worth $280 billion over that period.
Held every two years, the Zhuhai show is the premier showcase for competitors hoping to break into China's aircraft market and for the fledging Chinese industry to attract customers.
China signed a deal last week to buy 150 Airbus A320 planes, in a boost for the European aircraft maker, which has suffered costly delays with the A380 superjumbo jet. At the same time, Airbus signed agreements to open a final-assembly line in China, its first outside Europe.
At the Zhuhai show, Airbus was displaying a scale model of the A380 but no full-size aircraft.
Other exhibitors include Embraer, a Brazilian maker of smaller regional jets, which in 2004 became the first foreign aircraft maker to open a factory in China. Dozens of companies from China's state-run aerospace industry also are showcased at the exhibition.
Displays include a model cabin of an ARJ-21, which is meant to be China's first contender in the market for mid-range jets. The plane, which reportedly is to seat 78 to 105 passengers, is made by China Aviation Industry, also known as AVIC I. The company has not said when it expects to bring its first models to market.
Russian manufacturers are showing off fighter jets and military cargo planes, reflecting China's importance to Russian arms exporters. The United States and the European Union have barred arms sales to China since its 1989 crackdown on pro-democracy activists.
Russian aircraft on display in Zhuhai included supersonic Sukhoi fighters, but there was no indication Monday that Moscow would be showing its most advanced aircraft. Russian military planners are reportedly uneasy about selling their best technology to China.
ZHUHAI, China The world's major aircraft makers gather this week for China's biggest air show, looking to the booming Chinese market to drive sales in coming decades as their industry's growth elsewhere slows.
Boeing, Airbus and companies from 18 other countries including Russia and Brazil are displaying aircraft, radar equipment and other technology at the five-day show, which opens Tuesday in this southern town near Hong Kong.
China is expected to be the fastest- growing market for commercial aircraft over the next two decades. Boeing said last week that it expected carriers to purchase 2,900 new planes worth $280 billion over that period.
Held every two years, the Zhuhai show is the premier showcase for competitors hoping to break into China's aircraft market and for the fledging Chinese industry to attract customers.
China signed a deal last week to buy 150 Airbus A320 planes, in a boost for the European aircraft maker, which has suffered costly delays with the A380 superjumbo jet. At the same time, Airbus signed agreements to open a final-assembly line in China, its first outside Europe.
At the Zhuhai show, Airbus was displaying a scale model of the A380 but no full-size aircraft.
Other exhibitors include Embraer, a Brazilian maker of smaller regional jets, which in 2004 became the first foreign aircraft maker to open a factory in China. Dozens of companies from China's state-run aerospace industry also are showcased at the exhibition.
Displays include a model cabin of an ARJ-21, which is meant to be China's first contender in the market for mid-range jets. The plane, which reportedly is to seat 78 to 105 passengers, is made by China Aviation Industry, also known as AVIC I. The company has not said when it expects to bring its first models to market.
Russian manufacturers are showing off fighter jets and military cargo planes, reflecting China's importance to Russian arms exporters. The United States and the European Union have barred arms sales to China since its 1989 crackdown on pro-democracy activists.
Russian aircraft on display in Zhuhai included supersonic Sukhoi fighters, but there was no indication Monday that Moscow would be showing its most advanced aircraft. Russian military planners are reportedly uneasy about selling their best technology to China.
ZHUHAI, China The world's major aircraft makers gather this week for China's biggest air show, looking to the booming Chinese market to drive sales in coming decades as their industry's growth elsewhere slows.
Boeing, Airbus and companies from 18 other countries including Russia and Brazil are displaying aircraft, radar equipment and other technology at the five-day show, which opens Tuesday in this southern town near Hong Kong.
China is expected to be the fastest- growing market for commercial aircraft over the next two decades. Boeing said last week that it expected carriers to purchase 2,900 new planes worth $280 billion over that period.
Held every two years, the Zhuhai show is the premier showcase for competitors hoping to break into China's aircraft market and for the fledging Chinese industry to attract customers.
China signed a deal last week to buy 150 Airbus A320 planes, in a boost for the European aircraft maker, which has suffered costly delays with the A380 superjumbo jet. At the same time, Airbus signed agreements to open a final-assembly line in China, its first outside Europe.
At the Zhuhai show, Airbus was displaying a scale model of the A380 but no full-size aircraft.
Other exhibitors include Embraer, a Brazilian maker of smaller regional jets, which in 2004 became the first foreign aircraft maker to open a factory in China. Dozens of companies from China's state-run aerospace industry also are showcased at the exhibition.
Displays include a model cabin of an ARJ-21, which is meant to be China's first contender in the market for mid-range jets. The plane, which reportedly is to seat 78 to 105 passengers, is made by China Aviation Industry, also known as AVIC I. The company has not said when it expects to bring its first models to market.
Russian manufacturers are showing off fighter jets and military cargo planes, reflecting China's importance to Russian arms exporters. The United States and the European Union have barred arms sales to China since its 1989 crackdown on pro-democracy activists.
Russian aircraft on display in Zhuhai included supersonic Sukhoi fighters, but there was no indication Monday that Moscow would be showing its most advanced aircraft. Russian military planners are reportedly uneasy about selling their best technology to China.
ZHUHAI, China The world's major aircraft makers gather this week for China's biggest air show, looking to the booming Chinese market to drive sales in coming decades as their industry's growth elsewhere slows.
Boeing, Airbus and companies from 18 other countries including Russia and Brazil are displaying aircraft, radar equipment and other technology at the five-day show, which opens Tuesday in this southern town near Hong Kong.
China is expected to be the fastest- growing market for commercial aircraft over the next two decades. Boeing said last week that it expected carriers to purchase 2,900 new planes worth $280 billion over that period.
Held every two years, the Zhuhai show is the premier showcase for competitors hoping to break into China's aircraft market and for the fledging Chinese industry to attract customers.
China signed a deal last week to buy 150 Airbus A320 planes, in a boost for the European aircraft maker, which has suffered costly delays with the A380 superjumbo jet. At the same time, Airbus signed agreements to open a final-assembly line in China, its first outside Europe.
At the Zhuhai show, Airbus was displaying a scale model of the A380 but no full-size aircraft.
Other exhibitors include Embraer, a Brazilian maker of smaller regional jets, which in 2004 became the first foreign aircraft maker to open a factory in China. Dozens of companies from China's state-run aerospace industry also are showcased at the exhibition.
Displays include a model cabin of an ARJ-21, which is meant to be China's first contender in the market for mid-range jets. The plane, which reportedly is to seat 78 to 105 passengers, is made by China Aviation Industry, also known as AVIC I. The company has not said when it expects to bring its first models to market.
Russian manufacturers are showing off fighter jets and military cargo planes, reflecting China's importance to Russian arms exporters. The United States and the European Union have barred arms sales to China since its 1989 crackdown on pro-democracy activists.
Russian aircraft on display in Zhuhai included supersonic Sukhoi fighters, but there was no indication Monday that Moscow would be showing its most advanced aircraft. Russian military planners are reportedly uneasy about selling their best technology to China.
China-ASEAN summit to focus on regional trade
October 30th, 2006NANNING, Oct. 30 - China and ASEAN leaders are gathering here for a high-level summit meeting on Monday, with the aim to pursue regional free trade and enhance political mutual trust.
Leaders of eight ASEAN countries arrived in Nanning Sunday for the summit include prime ministers of Cambodian, Singapore, the Laos, Myanmar, Malaysia, president of the Philippines, Indonesian President Susilo Bambang Yudhoyono and Brunei Sultan Hassanal Bolkiah. Leaders of the remaining ASEAN members are expected to arrive here Monday.
This is the first time leaders from China and the ten ASEAN member countries to convene in China. They are widely expected to chart a future direction of China-ASEAN relations in the coming years.
Chinese Premier Wen Jiabao will hold bilateral meetings with the ASEAN countries leaders respectively on the sidelines of the summit.
A joint statement is expected to be inked by China and ASEAN countries upon the conclusion of the summit, charting the future China-ASEAN cooperation blueprint.
The third China-ASEAN Expo and China-ASEAN Business and Investment Summit are to kick off on Tuesday.
Chinese experts on international studies believe that the summits and Expo will push the China-ASEAN strategic partnership to a new level.
Shen Shishun, an expert with China Institute of International Studies, said Chinese and ASEAN leaders will probably review the development and achievements of the bilateral relations and set out the future China-ASEAN cooperation.
BLUEPRINT FOR CHINA-ASEAN FREE TRADE AREA
The upcoming commemorative summit is widely believed to lay a solid foundation for accelerating the establishment of China-ASEAN free trade area, which will realize free flow of goods, services and investment.
China-ASEAN free trade area, which will comprise China, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, encompass 1.8 billion population and realize a combined gross domestic product of 2 trillion U.S. dollars when completed in 2010. It is expected to be the most populous free trade area of the world and the largest free trade area amid developing countries.
To fulfill the scenario, a series of measures have been taken.
Beginning from July 1, 2005, China and ASEAN countries started their tariff reduction process. The two sides will gradually reduce or cancel tariffs on 7,000 kinds of products.
By 2010, China and six old ASEAN member nations -- Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand -- will impose zero tariffs on most normal products, while China and the other four new ASEAN members -- Cambodia, Laos, Myanmar and Vietnam -- will do the same in 2015.
China and ASEAN's ambitious free trade area project is based on their 15-year-long comprehensive and brisk trade development. According to Chinese statistics, China-ASEAN bilateral trade grew over 20 percent annually over the past 15 years, reaching 130 billion U.S. dollars last year, 15 times the figure in 1991. China is now ASEAN's fourth largest trading partner and ASEAN is China's fourth largest as well.
The trade volume between the two sides is expected to reach 200billion US dollars by 2008, two years ahead of schedule, as construction of the China-ASEAN free trade area is surging ahead.
The World Bank has predicted that China-ASEAN free trade area, upon completion, will turn to be one of the most influential economic powers in the Asia-Pacific region.
ENHANCED MUTUAL POLITICAL TRUST
The upcoming commemorative summit is believed to enhance the mutual political trust between China and ASEAN.
By 1991, China established diplomatic ties with all members of ASEAN. It became ASEAN's all-around dialogue-partnership country in 1996. Currently, China and ASEAN are bent on cementing the "strategic partnership oriented to peace and prosperity".
China has established a multi-level and regular dialogue mechanism with ASEAN with the "ASEAN plus China summit" as the core.
Shen Shishun said the China-ASEAN summit demonstrated that ASEAN countries have put ASEAN-China relations at a more prominent position and the China-ASEAN relations has ushered into a new stage characterized with dialogue, cooperation and common development.
A latest report released by the ASEAN-China Eminent Persons Group (EPG) pointed out that on the political front, the establishment of a strategic partnership for peace and prosperity has laid a solid foundation for the long-term ASEAN-China dialogue partnership.
In the security area, the report said China and ASEAN countries are carrying out cooperation in eight important areas including in the fight against drug trafficking, trafficking of people, illegal immigration, piracies, terrorism, arms smuggling, money laundering and international economic crimes.
The political and security relationship between ASEAN and Chinais relatively new and developing. The report said ASEAN and China should focus on confidence-building measures to create a climate conductive to engagement and cooperation.
ACCELERATED CULTURAL EXCHANGES
"Well implementation of policies hammered by China and ASEAN state leaders requires understanding and support from common citizens. Cultural exchanges is one of important channels to promote mutual understandings and trust among peoples of China and ASEAN," said Zhai Kun, an expert with the China Institute of Contemporary International Relations.
China and ASEAN countries are taking various measures to promote cultural exchanges, including holding personnel training, promoting tourism and holding art festivals.
The China Guangxi International Youth Exchange Institute has trained more than 200 young officials from ASEAN countries.
China and ASEAN countries are becoming the major tourism destinations and tourist sources for each other.
Some grand art festivals, such as Nanning International Folk Song Festival, are held annually to showcase the splendid arts and culture of China and ASEAN countries.
China now has 150 million migrant workers: report
October 29th, 2006BEIJING (Reuters) - Chinese officials estimate the migrant population has reached 150 million, doubling over the past decade as poor rural residents flocked to cities to take part in the country's economic boom, state media said on Sunday.
The figure for migrants now amounts to 11.5 percent of the population of China, the world's most populous nation, Xinhua news agency reported, citing Wang Guoqiang, deputy director of the State Population and Family Planning Commission.
More than 80 percent are rural migrants seeking jobs and would make up the majority of the floating population for a long time, Wang told a national conference in Shanghai.
In Shanghai one third of the city's population of 5.81 million people were from other places, Xinhua cited statistics from last year as showing.
Farmers from vast rural China have flocked into cities since market reforms started in 1980s, contributing to the country's economic boom by staffing construction sites, factories and restaurants.
But they have met barriers in getting social benefits such as health care and education for their children.
China interested in hiring RP nurses
October 28th, 2006MANILA -- China is interested in hiring around 500 Filipino nurses to teach there, the Commission on Higher Education (CHEd) said on Friday.
CHEd Chair Carlito Puno said that two big nursing schools in China have expressed interest in hiring Filipino nurses. “I can’t disclose yet the names of these schools pending the signing of an agreement between our government through CHEd and the China government through its education ministry,” Puno said.
He said that China has “high regard” for the country's nurses as compared with its own nurses. “China admitted that the quality of their nursing education is not good compared with those of other countries such as Philippines. China’s nursing graduates could barely pass the National Licensure Examination,” he said.
Puno announced the news as a result of his recent visit to China where he met with 41 education ministers from all over the world to discuss trends and improvements in cross-border education programs.
He also said the country will be sending to China next year the first batch of 1,000 nursing students who will share their knowledge with their counterparts on nursing care and hospital work.
“This (student exchange) is part of a cross-border education program between our country and the education ministry of the China government that would be formalized soon between the two governments,” Puno said.
Puno said that those who will be sent to China for a one-year tour-of-duty in the student exchange program are 4th year nursing students from two prestigious schools in the country.
“These nursing students will spend their last year of practicum in different hospitals in China. "That’s the initial agreement that has still to be signed by both governments. CHEd is already considering two top schools where the 4th year nursing students would be tapped to be sent to China ,” Puno explained.
Puno also expressed confidence that the nursing profession in the country will continue to produce more competent and qualified nurses in the future.
“Despite the leakage controversy wreaking havoc in our nursing profession, some countries are still interested to share and impart knowledge with us. This is a very positive development for our Filipino nurses who should also try to go to other countries other than the United States and Europe,” he said.
Puno believes that the controversy over the licensure exams leakage that hit the Philippine nursing education in 2006 will “die down naturally.” “I’m hoping the issue will be resolved soon and let our new nurses move on with their life and future,” he said.
On Friday, the Philippine Regulation Commission (PRC) started to administer the oath to those who passed the last nursing board exams last June.
Out of around 43,000 examinees, 41.24 percent or 17,323 passed.
China's ICBC launches record IPO, shares soar
October 28th, 2006Chinese lender raises $21.9 billion, while shares climb 15 percent in market debut.
October 27 2006: 6:53 AM EDT
HONG KONG (Reuters) -- Shares in Industrial & Commercial Bank of China, which is raising up to $21.9 billion in the world's largest IPO, ended 15 percent higher in their Hong Kong debut on Friday after its stock sale generated huge investor demand.
The debut values the largest Chinese lender, making the first simultaneous Hong Kong and mainland China listing, at about US$139 billion, ranking it fifth among global banks, behind JPMorgan Chase & Co. (Charts) and ahead of Mitsubishi UFJ
China began listing its banks overseas last year, and all five mainland lenders trading in Hong Kong have drawn huge demand for their shares as investors downplay worries about the legacy of decades of state-directed lending.
Yang Liu, managing director at Atlantis Investment Management, bought ICBC's IPO shares as a play on the Chinese economy, a rising currency and growing middle class, despite her preference for China Merchants Bank and China Construction Bank
"It's too big to be ignored," she said.
The stock leapt as high as HK$3.63, or 18 percent above its offer price, shortly after the Hong Kong market opening, compared with an IPO price of HK$3.07, before closing at HK$3.52.
ICBC was the most active stock in Hong Kong, but fell short of expectations for a first-day gain of as much as 20 percent.
"It's better than what the average investor expected, given the size of the offering," said Kent Yau, deputy research director at Core Pacific Yamaichi in Hong Kong.
ICBC's domestically listed A-shares, however, disappointed investors by ending with just a 5.13 percent gain to 3.28 yuan, compared with an offer price of 3.12 yuan. The Shanghai shares rallied early by 10 percent before easing.
The Hong Kong debut was crimped by a 0.31 percent dip in the Hang Seng Index, which earlier on Friday hit a record high.
Big and bigger
ICBC raised $19.1 billion and is expected to expand the offering to $21.9 billion by exercising an overallotment option.
The stock sale was the most popular in Hong Kong and China history, and unmet demand for shares, combined with a surging Hong Kong market and an offering priced at a discount to peers, helped lift its first-day trading performance.
"Investors foresee China's economy maintaining 10 percent growth every year before the 2008 Olympics in Beijing, so they're buying mainland bank shares now to access that growth," said K.C. Chan, executive director at money management firm KDB International, which bought ICBC shares for its clients.
The IPO, about 75 percent of which was sold to Hong Kong and global investors and the remainder in the mainland, surpasses Japan's NTT Docomo, which raised US$18.4 billion in 1998, as the world's largest share sale.
"This is the world's largest IPO ever with the biggest ever subscription rate. That speaks volumes for the quality of the offer and for global investor confidence in China," said Damian Chunilal, president of Pacific Rim global markets and investment banking at Merrill Lynch, one of ICBC's underwriters.
Among its rivals, Bank of Communications trades 132 percent above its IPO price, while China Construction Bank and Bank of China are up 50 percent and 13 percent, respectively. On their Hong Kong debuts, Construction Bank closed flat and Bank of China ended up 15 percent.
Billions in bailouts
China has scrambled to get its creaky banks into better shape ahead of increased foreign competition set to kick in at the end of this year under its World Trade Organization obligations.
ICBC's IPO attracted share orders worth about $400 billion for the Hong Kong portion of its deal and 780.7 billion yuan ($99 billion) for its domestic deal.
That should hearten another mainland lender, China CITIC Bank, which plans to raise as much as US$2 billion in a Hong Kong and mainland share sale by early 2007.
ICBC's share sale was a bonanza for foreign institutional investors led by Goldman Sachs (Charts), which paid $2.58 billion in April for about 16.5 billion ICBC shares -- a stake that is now worth $7.45 billion. Allianz and American Express (Charts) also bought stakes alongside Goldman that are now worth a combined $3.5 billion.
All three investors have three-year lockups on their shares.
ICBC's IPO values the lender at 2.23 times its forecast book value. By comparison, No. 2 mainland lender Bank of China trades at 2.35 times 2006 book, No. 3 China Construction Bank trades at 2.66, and No. 5 Bank of Communications trades at 3.04 times book.
At the end of June, ICBC had total assets of 7.05 trillion yuan, 360,000 staff and more than 18,000 branches all over China.
China's "Big Four" state-run banks have received billions of dollars in government bailouts to help ease their bad loan woes.
ICBC received a US$15 billion capital injection from Beijing in April 2005, helping lower its non-performing loan ratio to 4.1 percent as of June 30 this year, compared with Bank of China's 4.2 percent and 3.51 percent for Construction Bank.
ICBC's investors will be rewarded with dividends of 45 to 60 percent of net profit for 2007 and 2008, compared with 35 to 45 percent for both Construction Bank and Bank of China.
ICBC's global IPO was sponsored by Merrill Lynch, China International Capital Corp., ICEA, Credit Suisse and Deutsche Bank