Recruiting in China

When Wayne Ho was growing up in southern California, his father, a first-generation Chinese-American, wanted him to become one of the "usual three"-- a doctor, lawyer or banker. In his sophomore year at the University of California, Berkeley, Mr. Ho decided to switch majors from pre-med to English and ethnic studies and to pursue his passion in public policy. His father wasn't happy about it.

"He basically told me how can I get a job if I get these majors," recalls Mr. Ho, who is now executive director of the coalition for Asian American Children and Families, a non-profit organization. Degrees in social science might not help him find a high-paying job, said his father, who passed away three months after their long conversation on his career choice.

Non-profit director Wayne Ho talks to WSJ's Li Yuan about why he pursued a career that he loved over one that promised financial well-being, against his Chinese father's will. (Feb. 26)
If the idea that a father needs to tell his son what to do with his life seems peculiar to some, it's because career choice plays out differently in China than in the U.S.

At some point in their lives, many Americans ponder what to do with their lives. You can pursue your ideals or settle down in a more stable and financially rewarding job. You may consult with your parents, but ultimately it's your decision. You don't need to justify it to anybody but yourself.

In China, what you do with your life is a family affair. If you're smart and hard-working, you will be expected to pursue a stable and high-paying job -- whether you like it or not. The fear of poverty is so ingrained in society that the first order of family business is financial security. The pressure can be huge. Snobbish relatives may laugh at the parents for allowing a child to become a struggling artist. So, sacrificing your passion for arts and literature to take a "respectable" job is considered normal. Otherwise, we can be considered stupid, selfish and disrespectful of our parents.

That's not to say Chinese people never follow their career dreams. But those who do, I'd argue, are exceptions to the rule. Their parents are either very open-minded - like mine, who let me have my head and become a journalist -- or have deep faith in their children's talents. There's no shortage of stories about Chinese parents devoting their entire lives to their children's musical career. Chasing your dreams, especially when they don't lead to stable or lucrative jobs, remains more of a dream than reality for the average Chinese.

It's not unusual for Chinese parents to decide what their children should study in college. For example, my older Chinese friends often ask me what their sons and daughters should major in at college. They never believed me when I said they should study whatever they feel passionate about. At 18, they argue, the children will forget about their hobbies and ideals in a few months anyway. And passion doesn't put food on the table.

I've seen many high-school kids leave the choices of college and major to their "wiser" parents, jump for the highest-paying jobs they can find right after graduation, and then, as young professionals, torment themselves because they hate their high-paying jobs.

Sometimes even when the children know what they want to do with their lives, they won't rebel against their parents.

During one of my recent Chinese New Year phone greetings, I asked a friend about her 29-year-old son. "He's doing well, working at a large mutual fund in Beijing," my friend said. "But what about his passion for drama?" I asked, remembering that he co-wrote and directed a play a few years ago.

"He knew that he had to make money, like everyone else," my friend said. "He's making between 200,000 to 300,000 yuan ($28,000 to $42,000) a year (after tax). He's happy about that."

I'm not saying that most Americans would have made a different choice than my friend's son. There are plenty of Americans who choose careers largely based on how much money they can make. But at least they made a choice and knew what deal they made with themselves.

I believe there are no right or wrong choices as long as you are honest with yourself. Some bankers and lawyers I know thrive at their challenging jobs, while others hate the long hours and can't wait to quit as soon as they pay off student loans or save enough security money.

The idea that there's a choice between life's passion and financial rewards is also relatively new in China. My parents' generation, and even my generation, were taught to serve as "a brick in the building of socialism," wherever the party wanted us to go.

Then, about 10 years ago, college graduates were allowed to find jobs on their own. But quickly, everybody marched into the great competition of getting rich. Survival of the fittest became the game of the whole country. With a close-to-none social safety-net, even those who are making decent salaries by American standards feel they're far from being financially secure. They have to save to pay for education, healthcare, retirement and unemployment. And not just for themselves, but also for their children, parents and in-laws.

Economic prosperity has often been followed by increased appreciation of arts and literature. Take Florence during the Renaissance, Elizabethan England and New York in early 20th century. I'm hoping the same is true for China. Perhaps one day not too far in the future the country's burgeoning middle class will attach more value to career satisfaction that has nothing to do with how much you make.

BEIJING, Feb. 12 (Xinhua) -- There is something strange regarding the emerging occupation of male nurses in China. Advertisements claim they are in demand, yet many well-trained male nurses are looking for employment; some are trying to change their job, according to media reports.

In big cities such as Shanghai and Guangzhou, in fast-developing areas, as well as in less-developed provinces, male nurses are scarce. It's exceedingly difficult for hospitals to recruit them.

Many people attribute the scarcity to society's view point that nursing is a women's job. Women are seen as more careful and patient than men, while as nurses they take great care of patients, providing injections and dispensing medicine.

In fact, there are many reasons hospitals need male nurses. In general, they are physically stronger or more energetic than women. Male nurses are particularly needed in emergency departments, men's departments and psychiatric hospitals, to name but a few, according to some experts.

According to some media studies, many students and their parents hold the wrong concepts about the profession. This is the main reason very few males are likely to take nursing when they choose a subject for their secondary or higher learning.

According to a staff member of Jinan Health School in the Shandong provincial capital, in 2002, the institute recruited more than 130 students for its nursing program. Among them, only eight were male. What's worse, four later transferred to other specialties.

Although hospitals claim a scarcity of males in nursing specialties leads to the recruitment difficulty, those seeking employment see it rather differently.

In a recent employment poll of male nurses conducted by China's Male Nurse Forum (www.malenurse.cn/bbs/), the 31 nurses participating gave surprising responses.

The results showed only five were still on the job, two had changed occupation, and the other 24 were looking for employment.

A male nursing high school graduate who asked to remain anonymous said it was extremely difficult to find a hospital job if you have no money or connections with hospital leaders. A bribe of at least 50,000 yuan (about 6,670 U.S. dollars) is needed to secure employment, the man claimed.

While an overwhelming majority of male nurses chose their specialty due to the introduction of teachers and parents, many were now regretting their decision.

Another unidentified male nursing student in Shanghai who claimed he was inveigled into the profession, said "It's really a shame for a man to do nursing".

Feng Hongsheng, a Jinan Air Force Hospital nurse, said when he was a hospital intern his teacher told him, "Get a move on. You'd better change your occupation while you are young".

Feng said his base monthly salary is 800 yuan (about 106.67 U.S.dollars). One of his teachers at the hospital who has worked for more than 30 years, earns only 1,000 yuan a month.

He added nurses were at a disadvantage and their social status and pay were not good. He is planning to leave the hospital and do nursing for private households in his own business.

Chen Zengchuan, an employee with a labor agency for health professionals in the southwest Chongqing Municipality, said the scarcity of male nurses doesn't directly mean a pressing need as "there are enough female nurses in every hospital".

The main reason for the scarcity lies in the low payment for nurses. He suggested the salary and social status for male nurses be enhanced so as to ensure a sustainable development of this emerging occupation.

By Sol E. Solomon, ZDNet Asia
Monday, February 11, 2008 09:05 PM

Skills in business application and software development, amongst other fields, are expected to be in high demand across the Asia-Pacific region's more developed markets. However, it could take as long as three years in some countries to train enough talent to meet today's demands, according to industry watchers.

As the region sees increased development work, and with more functions being undertaken in-house by companies, there will be further boost in demand for .Net and J2EE developers, networking engineers and professionals with SAP enterprise resource planning (ERP) implementation skills, DP Search director Andrew Sansom said in an e-mail interview.

Kelly Chua, consultant for IT and telecommunications (IT&T), Hudson Singapore, said the country's hot IT jobs continue to be in the field of business applications.

"The high demand for SAP expertise and business-specific applications is mainly due to the constant need for organizations to align their businesses to market changes. This, in turn, affects the related IT applications," Chua explained.

According to Roger Olofsson, associate director at RobertWalters recruitment services' IT division, regional growth has further spurred more organizations to upgrade older ERP systems.

"Most firms were holding back in the difficult years [of] 2003 and 2004," Olofsson said in a phone interview. "When the economy recovered, they found they needed to expand [their IT capabilities] to compete [since] IT raises their competitive advantage."

"In Singapore, demand for IT expertise is growing as greatly as it did in the 1990s. Lots of companies are moving from the United States, Tokyo, Europe and other higher-cost areas," he said.

Big demand in big money
The region's financial sector continues to be a big employer of tech professionals.

In Hong Kong, for example, IT roles that specialize in investment banking such as frontoffice support, risk management, business analysis, development and project management, are high in demand, said Ellis Seder, manager for IT&T, Hudson Hong Kong.

"Increased volatility in the banking world will lead banks to review market- and credit-risk processes and systems," said Seder. "As such, they will invest heavily this year to update risk systems.

In Japan, sales and pre-sales roles are also highly sought after by both local small and medium businesses (SMBs) as well as multinational corporations.

"We forecast that in 2008, we will see steady demand for candidates strong in pre-sales, sales and project development," Mike Armstrong, head of IT&T for Hudson Tokyo said in a phone interview.

"There is still a war for talent," he added, noting that for candidates, "being bilingual in English and Japanese would help" secure their ideal jobs.

As for China, jobs in OS (operating system) kernel development with low-level system programming such as C coding, look set to be high in demand this year, said Raymond Wong, general manager for Tony Keith, a subsidiary of Hudson China. "An increasing number of kernel and system-level projects are being moved to China from the R&D (research and development) headquarters of major multinational companies," said Wong.

"In the early days of software development in China, most development projects coming from overseas were limited to application-level or quality assurance and localization projects. The kernel technical aspects were controlled and finished in the home countries," he explained. "Now, due to the maturity of the Chinese IT environment and current availability of IT talent in China, more OS kernel development projects are being transferred to China."

Competing for talent
However, Chua noted that the supply of IT expertise in the region is unable to meet the current demand. "It is always a challenge to find individuals with specific application background," she said.

Singapore, for example, is not producing enough IT professionals, Olofsson said. "Our clients in Singapore are recruiting more from overseas."

Chua added that Hudson is seeing demand for candidates in the financial services sector, with companies competing with Singapore, Hong Kong and Tokyo for the limited talent pool.

Wong said the job market in mainland China, too, lacks enough suitable technology candidates to satisfy employer needs.

"We forecast that it will take two to three years to train enough talent to meet the demands we face today," he said. "China is largely short of suitable talent for more senior positions, especially candidates with strong English skills and related experience in their fields."

Because of a lack of available talent in China, some organizations have had to recruit people with technical skills that are related, but not specific, to their roles.

Companies have also taken to hiring candidates who have potential and training them on the job, Wong said. "This creates more openings for tech talent who would not ordinarily find jobs," he noted.

In addition, China companies have often resorted to recruiting candidates overseas for senior positions.

"This can present a good opportunity for local engineers to gain knowledge and experience from their foreign counterparts," Wong said. "It is also a challenge as they are forced to integrate and work closely with foreign supervisors and colleagues."

"[At the end of the day], more [work] experience is what's required to bring our domestic talent up to speed, and this is something that will only improve with time," he added.

And while DP Search's Sansom noted that the current demand-supply situation is "balanced right now", he added that high-quality hires are not available on the market for long "so employers have to be quick to catch the good ones".

HONG KONG -- Executive hiring by multinationals in Japan is set to reach a six-year high this quarter but a global credit squeeze will affect staffing plans at IT and finance firms in Hong Kong, according to a survey by recruitment firm Hudson.

The report was slightly less upbeat than a previous survey three months ago because hiring expectations in China and Singapore have dipped. Hudson said rising concern that the United States is heading for a recession would make banks and finance firms in the region more cautious about hiring.

Still, 66 percent of managers at multinationals in Japan expect to increase recruitment this quarter, according to the survey released on Thursday, up from 65 percent three months ago and the highest level since the Hudson report was launched in late 2001.

In China, 61 percent of managers at multinationals plan to increase headcount in the next three months, down just slightly from 64 percent in the previous quarter.

The survey by Chicago-based Hudson Highland Group Inc. covered responses from 2,500 managers at multinational companies across industry sectors in China, Hong Kong, Japan and Singapore.

"The market in Asia is still looking buoyant and it is quite separate from issues in the United States," said Gina McLellan, Hong Kong manager for the US firm.

"But from February to April we'll start to see the actual size of bonuses and whether recently announced global headcount cuts by some investment banks will come in Asia."

Asia's financial services sector is booming, helped by China's and India's rapid economic development, and international finance companies are expanding in the region.

JP Morgan says it could hire up to 1,900 people in Hong Kong in the next three years and Credit Suisse plans to hire at least 70 bankers in the Asia-Pacific this year.

However, there could be job losses too in financial centres Hong Kong, Singapore and Tokyo as investment banks including Citigroup, Lehman Brothers and UBS have announced plans to lay off thousands of staff worldwide in the wake of the credit squeeze, even though those cuts are likely to focus on the United States and Europe.

In Hong Kong, 58 percent of managers surveyed plan to add staff this quarter, up from 54 percent three months ago, but nearly a third of IT&T companies and 23 percent in finance and banking say the global credit squeeze triggered by problems in the US subprime mortgage sector would have an impact on hiring.

In Japan, 12 percent of managers across sectors say hiring plans will be affected by the credit squeeze compared with less than 10 percent in Singapore and China.

"Hiring expectations remain at a high level in all the markets surveyed and the outlook is positive," McLellan said. "But employers are caught between sharply rising salaries and bonuses on one hand and high staff turnover rates on the other. This is most marked in China."

The survey showed a third of managers in China expect to increase managers' starting salaries by more than 20 percent to attract candidates and 47 percent reported turnover rates above 10 percent.

In Singapore and Hong Kong, 19 to 20 percent of managers said they had to offer pay increases of more than 20 percent but in Japan only 4.0 percent of managers saw such a need.

Atkins has started recruiting in Mandarin to attract Chinese engineering undergraduates studying in the UK

The country's biggest consultant takes on nearly 400 graduates a year - a third of them civil engineers.

Now Atkins head of recruitment Karen Wallbridge said the company had hit on the idea of recruiting directly in Mandarin to make sure it was reaching the widest possible audience.

Atkins has decided to use native Mandarin-speaking recent graduates within the company to address students from China who are studying for engineering degrees in the UK.

Wallbridge told a skills conference organised by Construction News: "Many people in India and China view engineering as a blue riband qualification, the way it used to be viewed in the UK. There are a lot of good young people coming to this country that we would like to bring on board."

She said the events had been extremely popular among Chinese students pleased to be addressed in their first language and that rooms had been filled with undergraduates keen to find a high-profile job.

She said: "It's made us review our policy on communication altogether. We look at recruiting good communicators.

"But now we are re-thinking whether this is the same thing as being able to speak good English."

The firm has already held a number of events at UCL in London and one in Manchester, the largest centre for Chinese students in the UK. It is planning more events at other universities.

Wallbridge said the Chinese recruits would be used not just in the UK but back in their native China where Atkins employs several hundred consultants.

She added the company had not ruled out expanding the plan to cover speakers of other languages.

Sourced from Construction News

By Maureen Fan

CAOTANG, China - This week in Caotang village, members of the Huang family were preparing for the Chinese New Year by making traditional dishes, scrubbing their already spotless homes and paying their respects to the family patriarch.

They were also discussing the fortunes of one of their most promising members, Huang He, a film and television student. In 2006, after 10 years of study in Northern Virginia and Michigan, Huang returned to China. Now, at the dawn of the Year of the Rat -- a symbol of prosperity -- he is contemplating heading back to the United States for work.

"I'm caught in between. My friends think I should set my feet firmly in the U.S. because I have already spent so much time there," said Huang, who wonders who will look after his parents if he leaves. "I'm not really lost. I'm not panicked. I'm just looking for my next opportunity and my next home."

Huang, 36, is a "sea turtle," one of the thousands of students who return to China each year after spending time abroad. For many of them, a visit to their family villages during the Lunar New Year, or Spring Festival, is near mandatory. But such visits also force them to confront changes in modern China -- changes that may prompt them to swim away again.

A rising tide of sea turtles

More than 1 million Chinese have studied abroad since this country began opening up in 1978, with just over a quarter of them returning after their studies. As the number of Chinese studying in the United States has risen over the years, so, too, has the number of sea turtles, so named because "overseas returnee" in Mandarin sounds like the word for the animal. According to the official New China News Agency, 42,000 students came back to this country in 2006, up 21 percent from the previous year.

But the China those students return to is not always the China they left. The phenomenal economic growth here has led not only to the development of villages and towns, but to a shift in Chinese values and priorities. Meanwhile, the sea turtles have experienced changes of their own.

After a decade studying communications, broadcasting and cinematic arts at Shenandoah University in Northern Virginia and Central Michigan University, Huang is a faithful mimic of President Bush, a regular viewer of "The Daily Show With Jon Stewart," a fan of the Green Bay Packers and a lover of steak. But he is also a citizen of China who misses his hometown dishes and his aging parents.

Caught in between

Fluent in two cultures, he is not quite at home in either.

"After living in the U.S. for so long, all sea turtles have to relearn their own culture," said Huang, who has been working in Beijing for a company that makes historical television dramas. "China is not the same China I remember. People's values have changed."

The media business that he recalls focusing only on propaganda is now driven by ratings. Deals that depended only on relationships now also require creativity and money. "People think in a more complicated way. I'm more straightforward now, but they're all zigzagging," said Huang, who also goes by Derek.

Even the village here of his father and grandfather, just 20 miles outside the central Chinese city of Xian, where his parents now live, has been marked by change. Most of the old-style houses with gently sloping roofs and mud walls have been replaced by modern brick and tile boxes. The street named after his late grandfather, a village leader who helped build the local irrigation system, is now just a numbered road.

Caotang used to be blessed by three crops a year. But graffiti attest to the recent sale of village land to a developer who has cut off water pumps, reducing the harvest to two crops a year. Across the main road from the village, residents can glimpse brand-new townhouses that overlook a golf course. The houses start at $280,000 -- to most villagers, an unthinkable sum.

"A cousin told me many of the young people in the village did not want to be farmers anymore, so they didn't oppose the sale of the land," Huang said. "Many who received money spent it on motorcycles."

Annual culture clash

At Chinese New Year, the village's population of 5,000 can grow to up to 10 times that number. Some traditions persevere: On Wednesday, a New Year's address from village officials will be carried to homes by loudspeaker. Officials will make their rounds delivering liquor and pastries to dozens of village elders.

Next week, the village square will fill with people selling paper and silk lanterns, plastic toys, cold rice noodles and sweet desserts. A sign above an outdoor stage, erected during the 1966-76 Cultural Revolution, declares that art and literature should be for the common people, not the bourgeoisie. But traditional opera performances are now supplemented by amplified pop music. For the first time, there will be a village-wide basketball tournament, to make the traditional holiday more relevant for younger residents.

For Huang, going home means visiting his village relatives whenever he returns to his parent's apartment in Xian. He has been trying to persuade a poor cousin to go out and find work.

"My plan this year is to add a few rooms to the house and then go out to look for a construction job," said the cousin, Huang Gang, 35, from the bed where he spends most of his time. "Can you tell me where I should go look for work?" he asked his more successful cousin.

Huang He, meanwhile, has difficult career decisions of his own. He has walked away from his Beijing job and plans to return to the United States in order to make more use of his valuable green card.

Some parents lose faith in foreign studies

That's a prospect that worries his father, Huang Ruike, a music professor who has changed jobs only twice in his life. He can't quite understand how his amply educated son has switched jobs four times already.

"Many years ago, I was very proud of sending both my children out to the U.S. to study. Many of my friends were jealous. But now that feeling has faded," Huang Ruike said over a lunch of fish and scallops.

Turning to his son, he added, "The American education you and your sister received is no doubt very positive. But many of your peers who did not study overseas, they all seem to be better off. Many of them were not as outstanding as you were in school. But those who didn't leave got caught up in the fast-paced development of China. If you didn't choose to go out, you'd probably have a car, a house, a wife."

Those are crucial barometers of success to most Chinese families, as opposed to the abstract ideas that Huang has in mind: a dream career and job satisfaction. His father, after all, gave up conducting and composing for the stability of teaching.

Nevertheless, Huang's parents are proud of him and his sister. And this being a new year, they tell him so.

"When your sister used to say, before the 1990s, that she wanted to study in the U.S., I always said, 'Stop dreaming!' " Huang's mother, Wang Lianyun, chimed in. "But now look at her. She didn't stop dreaming, and it happened."

Source: CCTV.com

Employers in China are facing the highest staff turnover rate in Asia topping 20 percent last year. A survey by leading international recruitment and staff management company Hudson, reveals Chinese employees are seeking the highest salary increases in Asia this year.

Sara Lee, a Fortune 500 company, recently solicited advice from employees about what the company could do to make their jobs more enjoyable.

Ruan Weihua, Marketing Director of Sara Lee (China) Co. said "We quite often organize such events among our staff, and want them to know that the company regard them not only as employees, but also as a whole family. This is part of our efforts to reduce the staff turnover rate, however the figure doesn't stay as low as we expect. "

A growing number of companies recognize the importance of team-building and are offering more training opportunities to nurture loyalty. The efforts have had mixed success, however, as recent reports show salary is still the number on concern for Chinese employees, when choosing a job.

Angie Eagan, General Manager of Hudson Shanghai said "Many markets in the world give salary adjustments that are related to. And all this investment and all this economic activities is creating the demand of people. And that drives up people's value in the economy. "

A survey conducted by Hudson China suggests nearly one-third of all local employees plan to ask for pay rises of more than 20 percent this year. And two-thirds expect their annual bonus to rise by at least ten percent. Fitting into this picture is also a turnover rate, especially in the service sector, which has held firm between 10 and 20 percent over the last 12 months.

Dissatisfied staff, increasing job mobility, rising wage demands – no, it's not Europe or the U.S. but Asia, where the booming economies of the region are fuelling an increasingly fierce war for talent.

Asian workers are becoming happier to dump their old employers and chase the best jobs and money, in the process creating a talent and retention crisis for both local and Western employers in the region.

A study by recruitment firm StepStone has found companies looking to tap into Asia's rapidly expanding economies are reporting growing difficulties when it comes to recruiting and retaining skilled employees.

What's more, the wage bill – once one of the biggest attractions for Western companies moving operations to the region – has been rising sharply.

The company's Talent Report 2008 has concluded that the notion as a "low-cost utopia with an abundance of labour" is now long gone.

Senior managers in Asia reported facing four major recruitment and retention obstacles.

These were: rising wage and pay demands among potential candidates, a lack of suitable candidates and skills, a perceived lack of career opportunities among workers and employee increasingly believing they could snap up better pay and benefits elsewhere.

The expectations of workers in the region were also rising, with workers no longer prepared to settle for second best and feeling they deserved more than they were getting.

Employees were now much more likely to jump ship if a better offer came along.

Job hopping was set to become one of the biggest talent headaches for organisations over the next three years, StepStone predicted.

Despite these difficulties, more than four out of 10 business leaders surveyed globally believed the Asia-Pacific region offered their business the best opportunities for revenue growth over the next three years.

The region has been much less affected than Europe or the U.S. by the sub-prime led credit crunch and in areas such as financial services is looking particularly strong at the moment.

Nearly nine out of 10 global business leaders expected either slight or significant improvement in their company's growth prospects over the next three years, with fewer than three out of 10 saying the rising cost of credit had caused them to be less optimistic.

"While recent surveys and financial analyst predictions indicate a drop in business confidence in the next year, it's clear that most business executives are still bullish on Asia as the growth machine in the longer term," said StepStone chief executive Colin Tenwick.

"While the credit crunch might be dismissed in boardrooms as a short-term speed bump, it would be folly for Western businesses rushing to invest in high-growth Asian economies such as China and India to ignore the clear signs of longer-term talent shortages in Asia," he added.

"This research shows that many companies will have to prepare themselves for a huge battle for talent, one that is even tougher than in Europe and North America," he continued.

"Asia is seen as the engine for growth but without the right people, businesses will see their engine splutter and may not get out of first gear. Without a clear, formal talent management strategy in place, companies will find it difficult to get – and more importantly, keep – the people they need and may struggle to realise the growth they are promising their shareholders," added Tenwick.

Globally, too, business leaders were unanimous in agreeing that recruiting and retaining talented employees was getting tougher.

Nearly half felt it was becoming slightly more difficult and four out of 10 believed it was becoming significantly more difficult.

Yet, despite this, only a quarter of organisations surveyed had a formal, company-wide talent management strategy in place and 16 per cent did not have a talent management strategy at all.

"To compete for the best people it is clear from this report that many organisations need to address how they are going to manage their talent in a far more structured way or they place their ability to grow under serious threat," said Tenwick.

"Given the low number of businesses with a formal talent management strategy in place, it' s unsurprising that a third of respondents said their organisation was poor at forecasting talent requirements and retaining talent in the organisation," he added.

While it was in Asia where recruitment and retention difficulties were most acute, business leaders in Western Europe and North America also agreed that employee career switching would be a major issue in fuelling talent shortages there.

However, business leaders in the U.S. and Europe were in general more concerned at the effects of an ageing population and lack of education and development opportunities.

"The difficulty in finding talent coupled with an ageing workforce presents a serious challenge particularly to businesses in developed economies in Western Europe and North America," Tenwick pointed out.

"With almost half of executives in those regions viewing an increased use of older workers in a positive light, it appears likely that we will see more older workers returning to the workforce or perhaps postponing retirement to fill skills gaps," he added.

By Alexandra Harney
For CNN

Editor's note: Alexandra Harney is a Hong Kong-based writer and the author of the forthcoming book "The China Price: The True Cost of Chinese Competitive Advantage" (Penguin Press, 2008).

HONG KONG, China (CNN) -- In the crowds still stranded by snow at train stations around China stand some of the country's most valuable economic assets: migrant workers.

A migrant worker, right, joins a queue waiting to board trains this past week in Shanghai, China.

more photos » This group of 150 million to 200 million farmers -- more than the population of the United Kingdom, France and Australia combined -- account for the majority of employees in China's world-beating manufacturing sector, the bulk of its coal miners and most of its construction workers.

During the past two decades, according to a conservative estimate from UNESCO and the Chinese Academy of Social Sciences, migrants have contributed 16 percent of gross domestic product growth.

Living for years at a time in coastal cities, China's migrant workers have built the country's skyscrapers and assembled its exports, sending tens of billions of dollars in earnings home to their families in poor inland provinces. For the workers known as "factories without smoke," the Chinese New Year holiday is often their only annual vacation.

The forces that brought these smokeless factories to the cities took shape in the early 1980s, when Beijing, as part of an easing of central controls on the economy, loosened internal mobility regulations. Farmers have been pouring out of the countryside ever since, in what is believed to be the world's largest internal migration.

They leave for mostly economic reasons: wages in the cities are higher than what workers could earn at home. And life there, many find, is more exciting than back on the farm.

Today, migrants dominate the Chinese labor force in dirty and dangerous trades: 70 percent of construction workers, 68 percent of manufacturing employees, and 80 percent of coal miners are migrant workers. But not all are on their hands and knees. More than 60 percent of staff in the service trade, according to state media, are migrants as well.

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On average, migrants tend to be among the best educated people in their villages. Still, many have little more than a junior high school diploma. Many migrate as teenagers, often with friends or neighbors, leaving behind their family in the countryside. More than half are men, but the toy and shoe factories of southern China prefer women -- they are easier to control, managers say, and their fingers more nimble.

Wages vary by city and company, but many migrants in export factories in the south take home about Rmb1,000 a month ($139) -- or even more. They sleep 12 to a room in bunkbed dormitories furnished by their employers, working six and sometimes seven days a week for months at a time. Wages are not always paid on time, occasionally not at all. Watch more about migrant workers' living conditions in dormitories »

Victims of occupational disease, lacking of insurance

As little as a fifth of migrant workers in southern China's Guangdong province, according to one Hong Kong non-governmental organization, have medical insurance. China's household registration or hukou system links social benefits to the place where one is registered, and most migrants are still registered in their rural hometowns, hundreds of miles away from where they work. About 90 percent of the victims of occupational disease in China are migrants.

These migrants' schedules are dictated by the fluctuations of demand from their foreign customers: winter is peak season for lawn furniture factories, for example. But most of the factories in southern China are busiest in summer, as they fill orders for the Christmas season.

Many of these plants close for the first months of the year and take the Chinese New Year holiday off, triggering an exodus of migrants as those who can afford the train and bus tickets travel home to see their families. Watch a migrant worker's 1,000-mile journey home »

Much has changed since Chinese farmers began arriving in the cities two decades ago. Some of today's migrant workers are "second generation" -- the sons and daughters of the first generation of migrant workers. Most were born after China introduced a family planning policy in 1979, so they come from smaller families. Second generation migrants tend to be more demanding employees: they are pickier about where they work, preferring factories with better facilities and wages.

Their preferences, along with a rapid growth in factories in the Yangtze River Delta around Shanghai and a rise in rural incomes, have contributed to labor shortages in Guangdong province in the last several years. In response, the government is raising the minimum wage and strengthening labor laws. Forced to compete for workers for the first time in more than a decade, factory managers are building basketball courts and libraries, installing air conditioners and improving their cafeteria menus.

Beijing, too, is realizing the importance of migrant workers as a political constituency. The state-controlled labor union, the All-China Federation of Trade Unions, is targeting migrants in a recruitment drive. The government is expanding insurance coverage for migrant workers.

State media cover their hardships regularly. "Migrant Workers: We Need Them Just Like They Need Us," read one headline in the China Daily last March. As the recent appearance of premier Wen Jiabao at the packed Guangzhou train station illustrated, migrants are crucial to keeping China's economic development on track.

Fast and personal customer service is what I insist is core to being an effective 21st century recruiter. Every candidate should receive a personal response customized to their questions and needs. Candidates should be sold positions on the basis of the goodness of their fit in the position and to the degree they exhibit the skills and competencies needed.

Yet, many recruiters are challenged to provide this level of service. Here are a few quotes from recruiters: "I have received almost 500 resumes. Over 90% of these people are not qualified or not what my company is looking for." Another said, "I have been overwhelmed with candidates. Some fit our needs, but most don't even take the time to read the job description...I wish I could reply to every candidate, but if I did, I would not be doing my job!"

Candidates, on the other side of the fence, say, "Now, as a candidate going through a very bad dry spell in finding recruiting work, I rarely experience this common courtesy among recruiters who post jobs that don't exist and fail to follow simple due diligence." And this: "I'm a downsized corporate executive who has been repeatedly appalled by the way companies and recruiters are treating candidates."

We all, I believe, want to provide candidates with great service, and we all know that those who have been ignored, dismissed as not qualified, and otherwise treated with discourtesy will not forget and may never recommend our firm to friends or apply again, even when they may be excellent choices.

Every act of discourtesy will eventually be incorporated into the overall reputation that our firms have about people and how they are treated. As they say in the customer satisfaction business, for every customer that tells you they are satisfied, there are at least 3 dissatisfied customers who have said nothing. The same applies for candidates.

So, what does the overworked, overwhelmed recruiter do? How can you provide responsive service in the face of huge numbers of resumes? Here are three tips:

Don't Post Job Descriptions, But If You Do, Make Them Precise and Specific

I have taken an excerpt from a job description I found on a website that is representative of many I see every day. The question I ask is who, with even a modicum of technical ability and a dash of experience, will not feel qualified for this job? There are no specifics, no details, and no firm requirements. I almost feel that I could apply for this and justify why if asked.

You're looking for more than just a job in Information Technology. You want a career that challenges your IT experience while giving you the freedom and support to succeed. Look no further than [company name]. Our Professional Services offerings span the entire application life cycle, giving our customers a complete solution and our employees the opportunity to excel on all platforms.
With our technical focus and emphasis on delivery, we strive to hire experienced Information Technology professionals with broad skill sets and the desire and versatility to learn new businesses and skills. We are selective in hiring and serious about retaining those we do hire.
We are looking for candidates with the following attributes:

Oracle Financials experience
Oracle 11i application development experience
Strong PL/SQL
I am sure that this has generated many hundreds of unqualified resumes. Unfortunately, most job descriptions are written this way deliberately so that they will generate a large number of responses. When we lacked technology and reach, this was a marginally acceptable approach. But today, it creates big problems. Most candidates are very concerned with applying for an appropriate job, but how can they really tell from the way descriptions are written? Are the specific requirements spelled out? Are you using technology to screen for these?

We need to focus on a building a new mindset. We do not need mass marketing for most positions, we do not need to generate hundreds of responses to make sure we've "covered the field," and we can't ignore hundreds of applicants because of our own inadequacies. Many of us have attitudes that would be similar to those of a store clerk who, when overwhelmed with customers, simply walks off and leaves them.

We Need to Use Technology, and Use it Better
The new recruiting tools and systems have built-in tools for communicating, screening, and maintaining relationships with candidates. These candidate relationship management tools are not magical, but they ease the burden and automate a portion of the task. However, the sad fact is that after these systems are purchased, only a fraction of recruiters utilize their powerful communication and screening features. Most recruiters are still focused on the zero value-added backend "administrivia" and don't see as clear a connection between the candidate experience and the type of response they get from recruiters.

Salesforce.com and all the larger Applicant Tracking Systems can automate the responses candidates get to various actions they take on the website. They can periodically send e-mails and newsletters, and they can be better programmed to send intelligent responses to candidates' questions.

The bottom line is that all recruiters need to do a better job letting candidates know where they stand in the recruiting process by sending regular updates and letting them know as soon as possible that they are no longer being considered. Even automatic bounce-back responses can be more intelligently written and distributed.

Relationships and Referrals Are Keys to Your Success
I am more and more convinced that posting job descriptions is an archaic process. While I have no doubt that the practice will live on for a long time, it is not the best, cheapest, or faster way to find good people.

Using technology to develop relationships and to communicate regularly with a selected and screened pool of candidates is the key to your real success. By developing and using tools that allow candidates and hiring managers to co-create requirements and refine requirements as needed, more good people will find jobs that fit them better. Posting jobs on job boards and pushing descriptions that seem to have been written by a PR firm out to wary candidates is no longer effective.

Recruiters have to use social networks, referrals, Internet search, and face-to-face conversation to build trust and establish a relationship with candidates that can be leveraged whenever needed. Unfortunately, face-to-face relationship building is slow, expensive, and clumsy. Social networks allow you do this with much greater ease and gracefulness at a lower cost in time and money.

Base your recruiting on the customer service mindset, go for quality (not volume), and do that by building relationships and asking for referrals. If you are generating hundreds of responses to a job posting, you are doing something terribly wrong.

BEIJING, Jan. 12 (Xinhua) -- More than 40 percent of employees in China were unsatisfied with their salaries in 2007 amid rising costs of living, said a latest online survey.

Covering more than 8,000 people of various professions nationwide, the survey was conducted earlier this month by www.zhaopin.com, one of China's leading job-hunting websites.

When the respondents were asked to rate their degrees of satisfaction on salary, 21.5 percent ticked 70-100 points representing "very satisfied and satisfied," 36.4 percent chose 60-70 points indicating "an average degree," with the remaining 42.1 percent opting for 60 points below to express their strong dissatisfaction.

Only one fifth of the employers have taken financial measures to increase employees' income to reduce the effect of price hikes in the past year, according to the survey.

Most respondents said they hoped their salary could be raised this year, with 30 percent of them hoping for a 20 percent increase, 36 percent for a 50 percent rise, and 21 percent for a doubling of their salary.

At the same time, more than half of the people surveyed said they were looking to change jobs.

The consumer price index, a major gauge of inflation, is likely to climb 4.7 percent in 2007, Yao Jingyuan, chief economist of the National Bureau of Statistics (NBS), said in late December 2007.

SHANGHAI -- Multinationals in China face more serious challenges than anywhere else in Asia, paying more to attract talent but facing the region's worst turnover levels, a survey said Thursday.
Across all sectors of China's roaring economy, 32 percent of employers said job seekers expect salary increases of at least 20 percent over their previous position, a report by human resources firm Hudson said.

Yet despite higher salaries, Chinese employers have a harder time than anyone else in Asia holding onto people, with 13 percent of firms reporting turnover rates of more than 20 percent of staffing levels.

"Employers are having to give both the highest salary increases and the largest bonuses in the markets surveyed in Asia," said Angie Eagan, general manager for Hudson.

Hudson surveyed the expectations of 737 executives in China for the first quarter of the year.

In regards to higher pay it concluded: "This strategy does not seem to be working, as they are also facing the highest staff turnover rates."

Media, public relations and advertising were especially vulnerable to losing employees, with 56 percent reporting a turnover rate of more than 10 percent, and 27 percent of companies averaging a turnover rate of more than 20 percent.

Limited career progression was also a major issue, mentioned by 22 percent of respondents, also more than any other market in Asia, Hudson said.

"With the current buoyant market, employees who feel that they are not progressing in their career fast enough know that they can obtain other job offers fairly easily," the report said.

Employers also expect to pay much higher year-end bonuses this year. Across all industries 66 percent of respondents say they plan to pay bonuses of more than 10 percent, the highest figure for any market surveyed in Asia.

Moreover, nearly 24 percent propose paying bonuses of over 20 percent.

Adding to the bottom lines were strong expectations for expanded staff.

By Rolf D. Cremer

Published: January 28 2008 05:59 | Last updated: January 28 2008 05:59

Before the mid-1980s, there was virtually no management education in China capable of preparing managers for a new, market-oriented, and increasingly international business environment.

There were no business schools in the western sense, and the MBA was practically unknown.

The business departments of local universities lacked both the quality and the quantity of faculty to offer credible programmes, and they lacked faculty capable of working with senior executives in an EMBA or executive education programme.

Meanwhile, the foreign MBA providers in China did have faculty, and brought them into the country. Their lack of in-depth knowledge of China and lack of real involvement with management did not hinder enrolment because at the time, there were no adequate substitutes.

During this initial stage, the emphasis was almost exclusively on teaching, and foreign providers using western teaching methods. Their market-orientated course enjoyed a competitive edge over rival programmes offered by domestic institutions.

But China’s MBA business has changed fundamentally during the past five years.

The number of domestic universities approved by the Ministry of Education to offer advanced business education programmes has quickly increased.

Today more than 100 universities have been approved for MBA degrees. They offer around 250 MBA and EMBA programmes, roughly 40 of which operate in co-operation with, or as host to, a foreign provider.

During this growth, China’s management schools have become much more competitive. The financial and administrative ability of the leading universities in recruiting internationally qualified faculty has increased.

The economic rise of China has attracted back the so-called “sea-turtles”, Chinese graduates and faculty with world-class management degrees and teaching or research experience. China’s potential students are now better prepared than ever before.

Employers now also realise the limited value of degree programmes and executive education courses that lack China-relevant content and context.

The time of importing management programmes and faculty into China is now coming to an end. Business schools in China are re-positioning themselves.

China is no longer a passive recipient of knowledge and know-how, but is developing into a power centre for influencing management teaching content and research methodology. In this respect, the world of education mirrors the rising influence of China on world affairs.

The success of China’s re-positioning over the next decade or two within the business education arena depends on three factors.

First, a handful of China-based business schools will need to emerge as an internationally-recognised elite – on a par in performance and reputation with the world’s leading schools.

At present, this is not yet the case, even though a small number of leading Chinese schools are prominent within the country, and are highly respected.

The rise of these schools into the elite will be led by the School of Economics and Management at Tsinghua, by the Guanghua School of Management at Peking University, and by the China Europe International Business School (CEIBS).

Second, China-based schools will need to align themselves with practical priorities of business.

At present, Chinese and foreign faculty in China are reluctant to commit their research to the region.

With one eye on the faculty market in North America and Europe, they consider publication in leading international (that is, US-based) academic journals as necessary for career development.

But with abundant and exciting research opportunities, good funding sources, and an emerging group of elite business schools in China itself, the future will bring greater alignment with the region.

Third, China-based faculty will need to emerge as leaders in education and research.

This will reduce the passive import of knowledge into the Chinese classroom and will gradually alter the world perception of business. The challenge for education will no longer be: “How can we teach (and sell) western knowledge and know-how to Chinese students in China and abroad?”

Instead it will be: “What can we learn (and apply) from the sustained success of China’s economy, and Chinese businesses?” This development may be hindered by the need to change the Western mindset to embrace the goal of learning from China, rather than lecturing to China.

Co-operation between the leading Chinese business schools and their international counterparts is an important means to overcoming this obstacle.

Rolf D Cremer is dean of the China Europe International Business School

SINGAPORE : Asian universities are gaining a foothold in the Financial Times' Top 100 MBA list.

China Europe International Business School (CEIBS) from China moved up by three spots to 11th position and the French-Singapore collaboration - Insead - was up a notch to 6th position.

At the same time, the Hong Kong UST Business School and the Indian School of Business are making their debut in the upper half of the list.

Jumping 21 spots to 46th position is the Nanyang Business School, the first Singapore university to make it to the top 50.

Not only is the Nanyang Technological University's MBA programme the top 46th in the world, it is also the 15th best in terms of value-for-money.

While the current fees average about US$21,000 (S$30,000), annual salaries earned by its students three years after graduation have gone up by a whopping 111 per cent to an average of US$89,836.

When it comes to finding work anywhere in the world - or international mobility as the survey calls it - the Nanyang Business school is ranked 9th best.

The University's MBA programme has about 100 students and almost 80 per cent of them come from over 20 countries. The school says it expects a spike of 20 to 30 percent in terms of enrolment for its July intake.

One of the driving factors not just for NTU, but also other Asian universities is the rising economic power in the region.

Professor Jitendra Singh, Dean, Nanyang Business School, NTU, said: "One of the primary reasons they have done so well in the FT rankings is that the salaries in China and India, in particular, are increasing dramatically as these economies are opening more and more to global competition."

The school will also be trying to improve the salary rankings of its students, which still fall behind their western counterparts. For example, students from top ranking Wharton School of the University of Pennsylvania earn nearly US$76,000 more annually than the NTU alumni.

In terms of global ranking, NTU hopes to be in the top 25 within the next six years. It says it will be constantly recruiting top professionals and reaching out more to global recruiters for its students.

In October last year, the Economist Intelligence Unit placed NTU's MBA as the top three in Asia. - CNA/ch

Skills Shortages and High Wage Demands Greet Companies Expanding in Asia – On Top of Credit Crunch

LONDON--(BUSINESS WIRE)--Companies looking to expand in Asia are bracing themselves for significant difficulties in recruiting and retaining skilled employees and a high wage bill as the war for talent in the region intensifies, according to a major global research report of business leaders’ views released today by StepStone (OSE:STP), one of the world’s largest providers of on-demand, talent management solutions.

The StepStone Total Talent Report 2008, researched and prepared by the Economist Intelligence Unit, concludes that “the idea of Asia as low-cost utopia with an abundance of labour is long-gone”.

Executives in Asia cited four major recruitment and retention obstacles which businesses faced:

rising wage and pay demands among potential candidates

a lack of suitable candidates to recruit and a lack of appropriate skills among potential candidates

a perceived lack of career opportunities among current employees

employee perceptions that pay and benefits could be better elsewhere

Asian business leaders also feared an increasing expectation among employees to switch careers and jobs as the most likely cause of talent shortages in their organisation over the next three years.

Sub-prime be damned: Asia remains the long term growth prospect

Despite the difficulties, 44 per cent of all business leaders surveyed globally believed the Asia-Pacific region offered their business the best opportunities for revenue growth over the next three years, shaking off short-term fears of the sub-prime led credit crunch for a positive longer-term view. Eighty-seven per cent of global business leaders expected either slight or significant improvement in their company’s growth prospects over the next three years, with only 29 per cent saying the rising cost of credit had caused them to be less optimistic about their organisation’s future prospects.

“While recent surveys and financial analyst predictions indicate a drop in business confidence in the next year, it’s clear that most business executives are still bullish on Asia as the growth machine in the longer term,” StepStone CEO, Colin Tenwick, said.

“While the credit crunch might be dismissed in boardrooms as a short-term speed bump, it would be folly for Western businesses rushing to invest in high-growth Asian economies such as China and India to ignore the clear signs of longer-term talent shortages in Asia. This research shows that many companies will have to prepare themselves for a huge battle for talent, one that is even tougher than in Europe and North America.

“Asia is seen as the engine for growth but without the right people, businesses will see their engine splutter and may not get out of first gear. Without a clear, formal talent management strategy in place, companies will find it difficult to get – and more importantly, keep – the people they need and may struggle to realise the growth they are promising their shareholders.”

Recruitment grows tougher globally

Globally, business leaders unanimously agreed that recruiting and retaining talented employees was getting tougher – 46.5 per cent saying it was becoming slightly more difficult and 41 per cent believing it was becoming significantly more difficult. Yet only a quarter of organisations surveyed had a formal, company-wide talent management strategy in place and a staggering 16 per cent did not have a talent management strategy at all.

“To compete for the best people it is clear from this report that many organisations need to address how they are going to manage their talent in a far more structured way or they place their ability to grow under serious threat,” Mr Tenwick said.

“Given the low number of businesses with a formal talent management strategy in place, it’s unsurprising that a third of respondents said their organisation was poor at forecasting talent requirements and retaining talent in the organisation.”

While it was in Asia where recruitment and retention difficulties were most acute, business leaders in Western Europe and North America agreed that employee career switching would be a major issue in fuelling talent shortages. However, they were more concerned than their Asian counterparts of the effects of an ageing population and a lack of alignment between education and the needs of business.

Older workers will return

“The difficulty in finding talent coupled with an ageing workforce presents a serious challenge particularly to businesses in developed economies in Western Europe and North America. With almost half of executives in those regions viewing an increased use of older workers in a positive light, it appears likely that we will see more older workers returning to the workforce or perhaps postponing retirement to fill skills gaps,” Mr Tenwick said.

The report found that organisations are also building their own online recruitment portals, turning to headhunters and outsourcing work to cover skills gaps. Middle management is the talent ‘pain point’ for most businesses – finding commercial and business unit heads was the number one recruitment headache, followed by staff in operations, sales and marketing, and information technology.

Employees in operations and sales and marketing were cited as the hardest to retain, with organisations using money as their greatest weapon in keeping staff – 64 per cent increasing pay and 48 per cent improving benefits to hang on to key employees. Other popular strategies included improving training, introducing mentoring programmes and flexible working hours.

The credit crunch – still a factor

“With most economies growing and shortages of talent becoming common, candidates and employees have held the upper hand in workplace negotiations in recent years. However with the fallout from the sub-prime financial crisis taking root and speculation that a U.S. recession could trigger a global business slowdown, the position of power in employment negotiations may soon change,” Mr Tenwick said.

While recent business surveys and financial analyst speculation around the world have pointed to reduced business confidence as a result of the credit crunch, executives who responded to the EIU research had a more positive long-term view. In September/October 2007 (during the first stage of the sub-prime impact), 87 per cent of executives polled believed their organisation’s growth prospects would improve over the next three years, and this view still held true in December when the wider impact of the credit crunch was being felt: 90 per cent believed growth prospects would improve over next three years.

“In potentially volatile economic conditions, not only is a talent management strategy vital but so is technology which allows an organisation to put the strategy into action and identify where talent gaps exist, or where headcount could be reduced. Whichever way the world economy turns, having the knowledge and agility to make swift decisions on the company’s employee base could make all the difference in being able to retaining the best people and maintaining business momentum.”

The StepStone Total Talent Report 2008 is available to download at www.stepstone.com.

About the research

The Economist Intelligence Unit surveyed 392 senior executives from the around the globe during September/October 2007, with most respondents from Asia (29%), Western Europe (28%) and North America (21%). The survey sample was extremely senior: all were management, with 67% operating as board members, CEOs and other C-level executives, or as senior vice-presidents, heads of business units and heads of departments. The executives surveyed represented all key employer sectors, including financial services (20%), professional services (14%), IT and technology (8%), manufacturing (7%), energy and natural resources (7%) and healthcare (5%). The organisations that the respondents worked for were predominantly large: 34% had annual revenues between $500m and $10bn, with 20% generating revenues of $10bn or more. In December 2007, the Economist Intelligence Unit re-surveyed senior executives to gauge the impact of the sub-prime credit crunch on business outlook.

The Economist Intelligence Unit's editorial team executed the online survey, conducted the interviews and wrote the report.

About the Economist Intelligence Unit

The Economist Intelligence Unit is the business information arm of The Economist Group, publisher of The Economist. Through our global network of more than 700 analysts and contributors, we continuously assess and forecast political, economic and business conditions in 200 countries. As the world's leading provider of country intelligence, we help executives make better business decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies.

About StepStone

StepStone is one of the world’s largest providers of on-demand, talent management solutions, offering a portfolio of technology, software and online services that enable organisations to attract, recruit, develop, retain and manage the best available talent.

StepStone Online operates some of Europe’s largest and most successful Total Talent Communities, covering 13 countries and attracting 1.9million visitors each week. StepStone’s Total Talent Management Software Solutions are a range of on-demand services which enable organisations to manage the entire employee lifecycle, from initial attraction, through pre-hire online recruitment, on-boarding and post hire performance management including compensation management, skills and competency management and employee training and development. StepStone recently completed the acquisition of ExecuTRACK, a global leader in strategic Talent Management, which extends StepStone's Total Talent Management solutions portfolio.

Thousands of organisations including Aviva, Amey, Royal Bank of Scotland, AXA, British Airways, Xerox and Fiat use StepStone's products and services to help them recruit qualified staff globally. Founded in Norway in 1996, StepStone was the only European-headquartered vendor to be recognised as a ‘leader’ by Gartner, Inc’s recent "Magic Quadrant for E-Recruitment Software, 2006” report.

China's employers have dual problems on the hiring front as they face the biggest salary increases in Asia needed to attract talent and the region's highest turnover, according to a survey.

The findings appeared in the Friday edition of the China Youth Daily.

Nearly one-third, or 32 percent, of the employers surveyed planned to raise salaries by at least 20 percent to attract badly-need talent, said the survey by human resources company Hudson.

The survey covered employers' first-quarter plans and expectations.

Year-end bonuses are expected to rise significantly, with 66 percent of the respondents planning to increase year-end bonuses at least 10 percent and almost one-fourth planning raises of more than 20 percent.

But despite significant increases in compensation, staffing turnover has been heavy.

Across all industries, 47 percent of companies surveyed had turnover rates of more than 10 percent in the past 12 months, and 13 percent said that the rate was more than 20 percent.

China's staff turnover rate was highest in Asia, more than twice that of Japan, the Youth Daily report said. Unsatisfactory compensation and limited career progression were blamed for China's high turnover level.

Among respondents, 22 percent agreed that limited career progression was a major cause of high turnover, while 18 percent believed it resulted from dissatisfaction over money.

The report predicted a persistent increase in salary levels in China because of limited talent resources.

By Han Dongfang

From a legal standpoint, the protection of workers' rights in China is systematically improving, with the government adding another major component, the Labor Contract Law, to its already substantial canon of labor legislation at the start of the year.

Since the promulgation of the Trade Union Law in 1992 and Labor Law in 1994, the government has regularly introduced new legislation and regulations designed to protect the rights and interests of workers.

However, while the interests of workers are increasingly enshrined in law, their rights on the factory floor remain precarious and are

routinely ignored or violated by management. The cause of this apparent contradiction is not hard to find: put simply, workers in China still do not have the right to collective bargaining.

There is a labor union in China, the All China Federation of Trade Unions (ACFTU), which could potentially represent workers in collective bargaining with management. The ACFTU, however, is first and foremost a servant of the Chinese Communist Party (CCP) and therefore an instrument of the party-state - representing labor and protecting workers’ rights is secondary.

ACFTU chairman Wang Zhaoguo freely admitted in a speech in December 2006 that China's unions "cannot blindly copy union models in Western countries". The ACFTU sees itself as a "bridge" between labor and management, not merely as an advocate for labor. As such, it does not actively defend workers' interests in negotiations with management but seeks to facilitate a compromise between the two sides.

The ACFTU's approach may seem attractive on paper, but in reality it has categorically failed to protect workers' rights and interests. Take the minimum wage for example. Because there is no freedom of association or genuine collective bargaining in China, employers can get away with paying the minimum wage to all employees regardless of the profits they make or the productivity of the workers.

Indeed, in the vast majority of enterprises across China today the minimum wage mandated by law has become the basic flat wage paid by employers by default. In other words, the minimum wage regulations designed to protect workers' interests have become the legal foundation of management's exploitation of labor.

China's Trade Union Law mandates the ACFTU to represent workers' interests in wage negotiations. Since, however, in the majority of enterprises, ACFTU branch union officials are appointed by or in some other way beholden to management, they would not dare raise an effective challenge to management on behalf of the employees. There is a mechanism - the "collective consultation and collective contracts system" - developed by the government and ACFTU over the past two decades, through which workers' demands for higher wages can in theory be discussed.

Yet because there is no genuine collective bargaining between labor and management, most of the collective contracts that the ACFTU has announced do not represent the workers but are rather the results of a "collective contracts production line". These mass-produced contracts are typically copied from the provisions of relevant labor laws and regulations and are of little or no help to workers on the factory floor.

There are also strict rules and regulations covering work hours and overtime. However, because of the excessively low wages paid by employers, workers very often cannot earn a living wage by working eight hours a day. Because they cannot bargain collectively, individual employees will certainly not dare to ask for a pay rise on their own. Their only option is to ask to work longer hours. In the majority of incidents where employees work long hours, it is because they requested it, and as such, the labor bureaus - who are supposed to monitor breaches of work hour regulations - are powerless to intervene.

The Labor Contract Law has numerous provisions designed to protect workers' rights and enhance job security. One key provision is that workers who have been employed at the same enterprise for 10 years or more will be legally entitled to an "unlimited" labor contract, which should guarantee them adequate financial compensation should they be made redundant.

Many employers have panicked on learning of this provision and urged, bribed or coerced long-serving employees to take early retirement or voluntary redundancy. The most noted example of this tactic was the move by Huawei - the former state-owned enterprise and now privately owned telecommunications conglomerate based in Shenzhen - to persuade about 7,000 employees who had been with the company for more than eight years to resign. In return, the employees received a lump sum of one month’s salary for every year of employment, plus one additional month’s salary, and were allowed to rejoin the company on a short-term contract.

Huawei's reaction to the new legislation was rational in a system where laws are largely theoretical and all the power inside enterprises resides with management. China's numerous labor laws are like swords suspended above the heads of factory owners and managers. They can all see the swords but none of them can really be sure what will happen if one falls.

Huawei's management could not be sure if the Labor Contract Law would hurt them or not, and so they did everything in their power to minimize the potential damage. Management had the power to persuade long-serving employees to give up their contracts, so it did. Yet again, a new law - intended to protect workers - instead led to the violation of workers' rights.

The Huawei case begs the question: do the workers really want long-term contracts or is this just something that legislators and concerned academics think they want or should have? In the Huawei case, if the workers had the right to free collective bargaining, this situation would not have arisen. Even without a new law requiring employers to give employees unlimited contracts, workers and management could have sat down together as equal partners, raised their concerns, made their demands and ironed out their differences at the bargaining table.

If the employees wanted unlimited contracts, their representatives would be empowered to negotiate a deal with management on the issue. If workers did not consider unlimited contracts to be of great importance, they would not place it on the negotiating table.

With a collective bargaining system in place, workers would no longer walk into the "dead end" of rights protection that exists at present. Workers and employers would in addition both be able to improve their "fire prevention" work. An effective collective bargaining system would lessen the risk of labor disputes igniting into conflagration and allow both labor and management to focus on prevention, rather than trying to put the blaze out after it had already erupted and most likely caused irreparable damage.

China Labor Bulletin has closely monitored the workers' movement in China over the past decade and has repeatedly noticed labor disputes that could have been prevented or resolved through a system of collective bargaining escalate into strikes, public protests and demonstrations simply because the workers had no other outlet.

Over the last few years, disputes over the non-payment of wages, low wages, forced overtime for little or no additional pay, unsafe working conditions and the lack of benefits, have all developed into mass protests. As a result, what should have been a simple matter between labor and management became a complex and very costly public matter.

Had an effective collective bargaining system been in place, the dispute would most likely have been resolved within the enterprise and the local government could have avoided expending its time and resources on trying to bring about a peaceful end to a dispute that had already gotten out of hand.

In terms of developing a collective bargaining system, the new Labor Contract Law comes at a good time and occupies a favorable position in China's legislative landscape. It is a propitious time because both those in the central government in Beijing and ordinary workers across China now agree that - after three decades of accumulated tension between labor and management - something has to be done.

If the situation continues in which management routinely exploits labor and violates workers' rights with impunity, workers, as in the past, will increasingly resort to protest and even violence in order to seek redress, and this will benefit no one.

The law occupies a good position because it effectively builds on China's existing foundation of labor legislation and regulation. In particular, the Labor Contract Law stipulates that it is the employer's responsibility to sign a collective labor contract with the employees' representative. If the ACFTU and its branch unions can grasp the opportunity presented by the law, it is probable that after a couple of years of finding their way and gaining experience in negotiations with management, the creation of a genuine and effective collective bargaining system in China will no longer be a problem for the unions.

The big push for collective bargaining should come from grass-roots unions. Right now, the vast majority of the so-called "unions" at the enterprise level are controlled by management - they do not speak for the workers nor do they really listen to the higher-level unions that are supposed to supervise them. If the workers, however, can democratically elect their own union leaders, and those leaders can effectively represent the employees in negotiations with management, the union will not only gain credibility and the trust of the workers, it will be much more willing to listen to and benefit from the expertise and skills offered by the higher-level unions in terms of organizing and negotiating with management.

Thus, by developing collective bargaining at the grassroots level, the enterprise-level unions will both be transformed into a representative labor organization and once again become a functioning part of the ACFTU. In short, therefore, a collective bargaining system can, at the fundamental level, both protect workers' rights and provide the ACFTU with an excellent opportunity to rebuild itself as a genuinely representative trade union.

HUAWEI Technologies Co Ltd has agreed to suspend its controversial "voluntary resignation" scheme after talks with trade unions, the All China Federation of Trade Unions said on Saturday.

The federation said it called on China's biggest maker of telecommunications network equipment to protect workers' interests after its plan sparked fears that the company was trying to sidestep a new labor law.

The federation and union organizations in Guangdong Province and Shenzhen City, where Huawei is headquartered, called on Huawei to solicit workers' opinions and respect their rights while making regulations related to their benefits.

Huawei would soon hold a workers' conference to review the interim regulations, sources with the ACFTU said. A company source confirmed, on condition of anonymity, that they had reached a consensus with the trade unions.

He said the company agreed to suspend the plan, but the exact date to implement it will be decided after workers' opinions were solicited at the conference since the plan was launched with their consent.

Huawei initiated a plan, calling for its staff who have worked for eight consecutive years to hand in "voluntary resignations," according to Nanfang Daily.

The staff would have to compete for their posts, and sign new labor contracts with the firm once they were re-employed, while those who lost out would receive compensation.

On Friday, officials with the Shenzhen Federation of Trade Unions met with a Huawei vice president and they reached a consensus on three issues.

WAL-MART Stores Inc will reduce its employees in China by more than 100 as part of a restructuring program in its Global Procurement Division after pressure mounted on the firm due to slower profit growth.

The world's biggest retailer plans to cut the payroll in its four sourcing offices in Shenzhen, Shanghai, Putian and Dongguan, according to Huang Jianling, a communications official from Wal-Mart China.

The lost jobs in China account for half of its global reduction.

"We have found some department functions overlap," said Huang via telephone with Shanghai Daily. "The consolidation will help to reduce redundancy and improve efficiency."

Huang added that some new positions will be created, but did not elaborate.

The layoffs in China, announced last weekend, came after the retailer posted a less-than-anticipated profit for the second quarter. Wal-Mart also lowered its earnings forecast after cutting prices on thousands of stationary items.

"The restructuring will by no means reduce our sourcing from China," Huang said.

Wal-Mart entered the Chinese market in 1996, and set up its first procurement office in Shenzhen in 2002.

It has bought an average of about US$9 billion in products from China per year over the past two years.

The Bentonville, Arkansas-based retailer has been aggressively expanding in China, where retail sales grow more than 14 percent year on year despite growing competition.

The market still has huge potential as the central government stepped up efforts to encourage domestic consumption so that the economy is less dependent on exports and investment in fixed assets.

Wal-Mart operates more than 86 stores in China with a total investment exceeding 1.7 billion yuan (US$229 million). France-based Carrefour SA owns 95 stores.

It acquired a 35 percent stake in China's Trust-Mart, which runs more than 100 hypermarkets, earlier this year.

The company plans to double its outlets in China in the next five years, Bloomberg News said in earlier reports.

Duncan Mavin, Financial Post
Published: Thursday, October 04, 2007

In China's red-hot recruitment market, business professionals are desperate to get ahead of the competition, with qualifications and overseas experience among the most sought after resume credentials.

'Returnees,' Chinese workers who have spent several years honing their business skills abroad, often have their pick of the best jobs, as does any Chinese executive with foreign training.

It's a trend that is leading to a wealth of opportunities for Canadian organizations able to provide the right kind of training.

"It's still a small part of our business, but it's been growing nicely in the past three years," says Roberta Wilton, chief executive officer of CSI, the Canadian Securities Institute.

At Toronto City Hall in August, for instance, twenty-eight Chinese executives became the latest graduates of the Canadian Securities Institute.

The business students from Guangfa Securities, a full-service securities firm based in Gaungzhou, China, graduated from a two-month course organized by CSI in conjunction with the Securities Association of China.

Hundreds of financial professionals from China have participated in CSI's executive style training programs in the past couple of years.

But it isn't the only organization to spot the opportunity.

Ads for the University of Western Ontario's Richard Ivey School of Business are impossible to miss in Hong Kong, where they are plastered all over subways and other prominent places.

The Ivey school has a modern campus in Hong Kong -- with a high-profile location in the heart of the Hong Kong Convention and Exhibition Centre -- and another office in Beijing, as well as alumni associations in Shanghai and Hong Kong.

Schools from all over the world are catching on fast, says Pete Fiaschi, the head of international marketing at Newcastle College, a vocational school in the northeast of England that focuses on the business of arts, tourism and sports.

Toronto-born Mr. Fiaschi spends most of the summer months travelling through China, including to relatively unknown cities such as Fuzhou or Qingdao, recruiting 200 or so Chinese students whose fees are a significant source of income for the school. In July, he set up permanent regional offices in Beijing and in Dalian, in northern China, to deal with the growing competition for Chinese students.

CSI, too, has a permanent office in Beijing and is about to open a Shanghai office. It also has partnerships with Chinese universities, including the Central University of Finance and Economics in Beijing, and the Shanghai University of Finance and Economics.

There is competition among foreign training providers, says Ms. Wilton. In particular, many of the big foreign banks and securities firms offer training courses, as do the international consulting and accounting firms.

CSI is betting its North American perspective plus its access to trainers from a variety of real live businesses gives it an edge over some more academic institutions as well as companies that can only provide insight from one industry.

Offering courses jointly with the Chinese regulator also helps build credibility, which will lead to deeper inroads in China, says Ms. Wilton.

HONG KONG: Hiring by multinationals in major Asian markets is likely to accelerate in the fourth quarter, notably in Japan, a survey by executive recruitment firm Hudson shows.

Sixty-five per cent of managers at multinationals in Japan said they expected to increase recruitment in the fourth quarter, according to the survey released on Thursday, up from 60 per cent in a survey taken three months earlier.

In China, 64 per cent of respondents plan to increase headcount this quarter, up from 60 per cent in the previous quarter; in Hong Kong 54 per cent of managers expect to add staff, compared with 49 per cent in the last survey.

The survey by Chicago-based Hudson Highland Group Inc covered responses from 2,500 managers at multinational companies across industry sectors in China, Hong Kong, Japan and Singapore.

Expectations in Singapore remained unchanged from the previous survey, with 54 percent of managers seeing a need to hire more staff.

Fast economic growth has led to a shortage of executive talent in Asia. More than a third of employees in Hong Kong and Singapore leave a company within two years, according to the Hudson report.

In China, 52 per cent of staff leaves within two years, and 30 per cent of job candidates there are demanding salaries of more than 20 per cent above what employers are willing to pay, the survey shows.

BEIJING - "When I hit the big time, I will buy a BMW-7 series car as my marriage dowry," said sparkling 22-year-old Jian Jingtao. "I'll give it to my fiance to show him how much I love him."

In China, the cheapest BMW-7 series model costs nearly 1 million yuan (US$133,000) while the average annual income for urban residents nationwide was only 12,000 yuan in 2006.

Jian, a civil servant in the southwestern province of Sichuan, makes about 1,200 yuan a month, and she also works as a part-time weather girl at a TV station in Liangshan Yi Autonomous

Prefecture, an impoverished region in Sichuan, where most people haven't even heard of BMW. The part-time job doesn't bring her much money.

Then, how can she possibly realize her dream? Well, instead of counting on her part-time job, she has other ideas.

"I'm taking the Chartered Financial Analyst [CFA] test and I've passed level II," says Jian, her eyes shining with hope. "Just one step away from the best financial institutions."

She believes getting a job in such institutions will mean she is one step closer to her dream car.

Official data suggest that staff workers in China's well-known financial institutions make 15,000 yuan a month and more. And jobs in the financial sector have being taking the lead, driven by the basic principle of a market economy's supply and demand.

About 45 million people will join the labor force in the next five years in China, but many of them will have to take jobs as laborers and construction workers and make just 800 yuan a month.

When lecturing in China's leading Tsinghua University, China Construction Bank (CCB) chairman Guo Shuqing testified that the most troubling problem facing his bank in its "go overseas" strategy is a shortage of talented professionals.

CCB, one of China's "Big Four" state-owned commercial banks, wants to set up branches in New York and London, Guo told the students, adding that the bank is "hungry for people specialized in financial accounting, securities analysis, portfolio management, interest rate pricing and foreign exchange pricing".

China, the world's fastest-growing economy with an annual gross domestic product (GDP) growth of almost 10% for the past 10 years, has long been considered the world's factory, producing about 75% of the world's home appliances, for example.

But as the country moves to a more market-oriented financial system, financial talent is at a premium because there are many issues to deal with.

As a major reform in the financial sector, China dropped its currency peg to the US dollar in July 2005 and linked the yuan to a basket of foreign currencies, allowing it to float in a 0.5% band (which was expanded to 0.5% this year) around the official central parity.

"Everything changed when they expanded the fluctuation range to 0.5%," says textile trader Wei Changshan from Beijing-based Dongxing Textile Co. "I'd really like to hire someone to tell me about how to manage it."

In July 2005, one US dollar could be exchanged for 8.28 yuan. On September 21 this year, the same dollar could be bought for just 7.51 yuan.

Hearkening to overseas comments, Yi Gang, assistant governor of the People's Bank of China (PBoC), the country's central bank, said that the exchange rate of the Chinese currency would gradually become more flexible.

As for the stock market, the benchmark Shanghai Composite Index surged by more than 130% year-on-year in 2006 after a five-year bearish market, thanks to reformed securities regulations and continuing strong economic growth. China's stock market is now the largest in Asia by market capitalization.

As new regulations come into play concerning foreign investments, Chinese fund managers and securities traders would like to compete with overseas competitors. The lack of financial talents seems serious.

A recent government document on qualified domestic institutional investors (QDII) allows domestic fund management and securities companies to follow commercial banks into the arena of overseas securities.

"We started preparing for QDII products nearly six months ago," said Xu Xiaosong, vice general manager of China Southern Fund Management. "So we are recruiting. Unfortunately we are not the only ones. A number of big securities companies are looking for people," said a fund manager who asked to remain anonymous. "It's simple. If we want to win the competition we need the best team."

Not surprisingly, foreign banks are also on the lookout for qualified people in China. In 2005, the Bank of East Asia opened personal services, the first to do so in China.

In the China-US Strategic Economic Dialogue held in May, China agreed to allow foreign banks to issue their own yuan-dominated credit and debit cards. The move is seen as a way of boosting fair competition between local and foreign financial institutions.

At the third national conference on financial work early this year, Chinese Premier Wen Jiabao said that China would facilitate fair competition between domestic and foreign financial institutions.

As the government opens the banking sector to meet its World Trade Organization commitments, the human resources battle for the best and brightest in the financial sector has escalated as well.

HSBC expects to grow its headcount from 3,000 to 4,000 in China this year and Citigroup plans to hire about 1,000 extra people. Standard Chartered said it did not have a specific target this year but hired 1,000 in 2006.

Finding enough experienced staff and training them adequately is the toughest issue confronting the bank, HSBC China chief executive Richard Yorke said earlier this year.

"There is no real finance education in Chinese colleges," noticed Wang Zhao, an economist with Beijing University's China Center for Economic Research. "The so-called finance [education] in colleges only consisted of macro-control measures, such as monetary policy, that hark back to the days of the planned economy. What Chinese students want now is courses on securities analysis and portfolio management," he said.

A recent international survey released by Deloitte Consulting found that two-thirds of the 636 senior finance executives surveyed thought the supply of high-quality talent in Asia was limited or inadequate.

"The crucial but tricky part is that you have to master international practice as well as the local reality," managing director for Asia-Pacific Operations CFA Institute Jane Squires commented.

"This year, 10,200 people signed up to take the CFA test in China, up 30% from last year," Squires said. "We can reasonably project that there will be 600 more CFA holders at the end of 2007."

"I can't say how many financial experts China needs but one thing is certain, there is plenty of room for those who have the capacities. The United States currently has 44,220 people who hold the CFA qualifications. In comparison there are 3,650 in Hong Kong, 2,133 in Singapore and just 1,086 in China," she said.

China has outlined its new policies for the financial sector, including deepening the reform of state-owned banks, facilitating rural financial reforms, and steadily pushing forward the reform of foreign exchange rate.

The country's financial sector is set to speed up as the market continues to swing open. In that case, Jian Jingtao, the young lady with so many traditional Chinese virtues, has an excellent chance of realizing her dream and the dream of her lucky boyfriend, probably with a little help in the shape of a bank loan.

Duncan Mavin, Financial Post
Published: Thursday, October 04, 2007

In China's red-hot recruitment market, business professionals are desperate to get ahead of the competition, with qualifications and overseas experience among the most sought after resume credentials.

'Returnees,' Chinese workers who have spent several years honing their business skills abroad, often have their pick of the best jobs, as does any Chinese executive with foreign training.

It's a trend that is leading to a wealth of opportunities for Canadian organizations able to provide the right kind of training.

At Toronto City Hall in August, for instance, twenty-eight Chinese executives became the latest graduates of the Canadian Securities Institute.

The business students from Guangfa Securities, a full-service securities firm based in Gaungzhou, China, graduated from a two-month course organized by CSI in conjunction with the Securities Association of China.

Hundreds of financial professionals from China have participated in CSI's executive style training programs in the past couple of years.

But it isn't the only organization to spot the opportunity.

Ads for the University of Western Ontario's Richard Ivey School of Business are impossible to miss in Hong Kong, where they are plastered all over subways and other prominent places.

The Ivey school has a modern campus in Hong Kong -- with a high-profile location in the heart of the Hong Kong Convention and Exhibition Centre -- and another office in Beijing, as well as alumni associations in Shanghai and Hong Kong.

Schools from all over the world are catching on fast, says Pete Fiaschi, the head of international marketing at Newcastle College, a vocational school in the northeast of England that focuses on the business of arts, tourism and sports.

Toronto-born Mr. Fiaschi spends most of the summer months travelling through China, including to relatively unknown cities such as Fuzhou or Qingdao, recruiting 200 or so Chinese students whose fees are a significant source of income for the school. In July, he set up permanent regional offices in Beijing and in Dalian, in northern China, to deal with the growing competition for Chinese students.

CSI, too, has a permanent office in Beijing and is about to open a Shanghai office. It also has partnerships with Chinese universities, including the Central University of Finance and Economics in Beijing, and the Shanghai University of Finance and Economics.

There is competition among foreign training providers, says Ms. Wilton. In particular, many of the big foreign banks and securities firms offer training courses, as do the international consulting and accounting firms.

CSI is betting its North American perspective plus its access to trainers from a variety of real live businesses gives it an edge over some more academic institutions as well as companies that can only provide insight from one industry.

Offering courses jointly with the Chinese regulator also helps build credibility, which will lead to deeper inroads in China, says Ms. Wilton.

After 13 years of building its business recruiting permanent workers in China, Manpower Inc. announced Wednesday that it is the first multinational corporation to receive a license to provide temporary-staffing services in the nation.

Milwaukee-based Manpower said that it, along with six Chinese firms, has been granted a license to supply temporary help to employers as part of a pilot program organized by the Shanghai Personnel Bureau.

The China Toy Association has announced that Mattel's global recall of Chinese-made toys has had a huge impact on the industry, with many workers losing their jobs, but added the industry was not to blame.

China has been struggling to convince the world its products are safe after a series of scandals over a string of products from tainted pet food and drugs to tyres, toys and toothpaste.

In its second recall this month, the US's largest toy company recalled millions of Chinese-made toys due to safety risks from magnets and lead paint.

Mattel warned it may recall additional products as it steps up testing.

The China Toy Association, representing manufacturers and suppliers, said the production of poor-quality goods was not deliberate.

"The industry itself did not mean to produce poor quality goods and paid a heavy price for its mistakes," the association said in a statement.

"Most of the employees will have to leave factories they have been serving at for many years and are facing unemployment or re-employment problems.

"This has had a huge impact on the industry and society. The recent recalls were instigated by foreign brands. Nobody was injured."

It also blamed "unobjective whipping up of public opinion" for the troubles which "certainly led to excessive worries for domestic and foreign consumers".

It added that no companies had considered shifting orders elsewhere.

Retailer Carrefour yesterday announced the opening of a trade union to cover its five outlets in the city. The organization, which is the company's first in Guangdong Province, will have a branch in each outlet and represent some 590 employees. It will be chaired by Li Wenkai, a department manager at one of the stores.

Pierre Bertholat, vice-president of Carrefour China, said: "We hope the union will play an active role in organizing activities and do its bit to contribute to an invigorated corporate culture and to the protection of the worker's rights." Joanna Meng, human resources director, said establishing the trade union was part of its localization strategy.

"Carrefour is witnessing a rapid expansion in China and we will step up efforts to set up trade unions in all of our outlets across the nation," she said. Carrefour has opened 13 outlets in China this year, taking its total to 100, and plans to open a further 10 by the year's end.

Zeng Fanqiang, trade union chairman of Guangzhou Development District, where Carrefour's South China territory is registered, said the setting up of the union was a positive move. "I hope the union will aid Carrefour's labor-management relations and unite employees," he said.

More than 70 percent of the province's 36,200 foreign-funded companies now have a union. Sixty-eight were set up last year. In addition, more than two-thirds of the multinationals represented in the province have established unions, with the remainder expected to do so by the end of the year.

BEIJING - US fast-food giant McDonald's says it will raise the salaries of its workers, including part-time employees, at its 800-plus Chinese outlets, effective from September 1.

About 95% of McDonald's China "crew" will see a pay increase of 12-56%, or an average of 30%, said Jeffrey Schwartz, chief executive officer of McDonald's (China) Co Ltd. The remaining 5% are already being "paid very well". This will involve about 45,000 full-time and part-time workers, including students.

McDonald's has broadly three types of employees: crew, or the non-managerial staff serving at its outlets; managers; and administrative staff. "We have raised salaries in China many times, but this is the first time there is such a large increase covering so many people," Schwartz said.

The announcement comes a few months after media reports about McDonald's and other foreign fast-food operators such as KFC paying their part-time staff less than the local minimum wages (see China's part-time McWorkers exploited , Asia Times Online, April 20).

But Schwartz said the company's decision to raise pay has nothing to do with the pay-related bad press it has been getting. "We have been looking at a wage increase for a year. The issue [reports of low pay] only reminded us that we need to move more quickly."

Under the new wage initiative, pay for McDonald's "crew" across China will be "much higher than the local minimum levels".

"It will be 15% higher in both Beijing and Guangzhou, and 12% higher in Shanghai," said Susanna Li, vice president of McDonald's China human resources. For example, full-time workers in Guangzhou will see their monthly wages rise 21% to 1,072 yuan ($142).

Though the Labor Bureau of South China's Guangdong province clarified in June that McDonald's had complied with the regulations set by the local government, the issue of underpaying part-time employees has dented the company's image. Many workers had claimed they were receiving the city's legal minimum wage of 7.50 yuan an hour.

And that's the last thing McDonald's would like to see. "China contributes 2% of McDonald's global sales, which is a significant amount. Annually, McDonald's opens 100 new stores in China," Schwartz said. "We don't want to be thought of in that [negative] way. We want to be the best employer in China."

McDonald's managers, who account for 14% of its total local staff, are not included in the wage-increase program, but they have benefited from the "profit-award program" that started last year.

In 2006, 80% of the fast-food giant's Chinese managers received a bonus of up to twice their annual salary.

(Asia Pulse/Xinhua Information Center)

China is a red hot market for Cisco, which saw its second-half sales in Hong Kong grow more than 35% from a year earlier, reports the South China Morning Post. But the country is suffering from a lack of experience managers to lead the hi-tech firms - including Cisco - that have set up facilities there.

Businessweek is reporting on Cisco's answer to the problem - grow managers from within by instituting "management kindergarten" programs. Businessweek cites Cisco's Shanghai research center, where the average age of workers is 27, as an example of a unit that is offering such a program.

Quoting Jan Gronski, managing director of the Shanghai facility, and her No. 2 Chris Dong, Businessweek writes:

Gronski and Dong have opened "Cisco Clubs" at three Chinese universities, giving students a chance to work with Cisco engineers. For those on staff, Gronski runs management seminars every Thursday. He schools young managers on everything from giving presentations and decision-making to speaking their minds.

Some readers of the article think that Cisco will still churn out inexperienced managers. But what's the difference between this program and other "management trainee" programs offered by companies in the west?

The government of the southern boomtown of Shenzhen bordering Hong Kong plans to hold job fairs in North America, Europe and Australia next year to attract top professionals.

Although the move has not been well received by some residents, it has gained the support of overseas returned Chinese and human resources organizations.

"It's very positive. It is a goodwill gesture by the government toward foreigners, especially Chinese people working or studying abroad. It will also help companies attract quality candidates," Ouyang Hui, director of the talent research center of ChinaHR.com, told China Daily.

William Zheng, a special counsel with US law firm Sheppard, Mullin, Richter & Hampton, said the government of Shenzhen has created a good opportunity for companies.

"A growing number of Chinese companies are setting up subsidiaries abroad or acquiring foreign companies. They are in great need of senior foreign executives who are not only good at business, but also know the local accounting rules and laws," Zheng said.

The Chinese-American began working in China in 2003.

"Government-sponsored job fairs have more impact on foreign communities and attract top professionals, more so than individual companies," he said.

According to the Shenzhen office for introducing foreign talents, the city has held job fairs in the United States, Canada, Europe and Hong Kong since 1992. It was the first Chinese mainland city to hold such fairs.

"The fairs have proved successful in attracting overseas professionals," Yin Shaowen, deputy director of the office, said.

The number of overseas returned Chinese surpassed 10,000 in June this year, Yin said. Some of them have set up companies in the city with start-up funds from the government.

"To encourage these people, the government raised the start-up fund for a single project from 150,000 yuan ($20,000) to 300,000 yuan early this year," Yin said.

According to official figures, the city has attracted more than 150,000 overseas technicians and executives in the past 20 years. In the past two years alone, 72,000 have settled in the city.

Mayor Xu Zongheng said the government would soon launch a series of campaigns to make the city a most attractive destination for foreign professionals.

By Melinda Liu and Sudip Mazumdar
Newsweek International

Aug. 20-27, 2007 issue - Earlier this year, students would show up for class each day at the Jalpaiguri Engineering College in West Bengal—and find no teachers. The Department of Electronics, Computer Science and Information Technology had just one full-time teacher (it's supposed to have 20). Finally, in May, the students—who faced impending exams despite having had no instruction—went into the streets to protest. Eventually, the government announced it would enlist teachers from other schools. But that proved easier said than done: when administrators went looking for recruits at one of India's oldest educational institutions, the Bengal Engineering and Science University (BESU) in Kolkata, they found that it couldn't spare any teachers—it didn't have enough of its own.

Wait a second: this isn't what the picture is supposed to look like. For years, pundits and the press have been warning that the millions of engineers and scientists India and China produce each year would soon challenge the United States' technical superiority. Just a few months ago, the London-based think tank Demos warned in a report that "the center of gravity of innovation has started moving from the West to the East," and that China could become a "scientific superpower" by 2050. Indeed, the raw numbers are impressive. China cranked out more than 600,000 engineers in 2005 alone, and India produces nearly 500,000 technical grads annually.

But these stats only tell half the story. Many of the graduates can't find work, and corporate recruiters in both countries lament a dearth of qualified applicants. "Out of the huge number of engineering and science graduates that India produces, only 25 to 30 percent can be regarded as suitable," says Kiran Karnik, head of the National Association of Software and Services Companies. The reason? Underfunding and a range of other factors have produced serious educational crises in India and China. These problems could soon wreak havoc on their economies. To sustain their breakneck growth, the countries will need lots of high-quality engineers and scientists. Yet neither have enough reliable universities to produce them. M.A. Pai, who taught at the prestigious Indian Institute of Technology in Kanpur, warns that the "lack of highly trained people at the Ph.D. level in both sciences and engineering will be a serious setback to India becoming a knowledge economy."

For China, the problem can (at least in part) be traced back to the Cultural Revolution, when ultraradical Maoists paralyzed universities. Many students and instructors were shipped off to farms—if they didn't wind up in "re-education" camps. Higher education started to rebound in the 1980s, and in the 1990s Beijing launched an ambitious program to expand college enrollment. But in the process, standards slipped. "Once you get in, it's [too] easy to graduate," says Prof. Mao Shoulong of Renmin University.

Experts also complain that Chinese schools emphasize rote memorization, which often "detracts from the quality of education," says Mao, who believe China's system fails to teach practical applications or to instill creativity. "That's why students in the United States might not have good marks in class but can produce effective missile technology, while students in China enjoy good marks in class but might not be able to make sufficiently good missiles," he says.

Chinese universities also face another common problem: poor funding. Many schools must now support themselves largely on tuitions. "This makes some of them lower their enrollment standards," says Prof. Chu Shulong of Tsinghua University. And the model just doesn't bring in enough cash. At U.S. universities, tuitions run into the tens of thousands. "But in China it might be one twelfth as much," says Mao. Thus while many U.S. students enjoy comfortable dorms, students in China have to share cramped and poorly maintained facilities. Many colleges are also short on equipment, labs and classrooms.

India faces similar deficits. Pay for university teachers is pitiably low (it starts at about $400 a month), especially compared with what they could make in the private sector (more than $10,000 a month). As a result, says Madhusudan Datta, an economist at Kalyani University, "talent gets soaked up by lucrative offers from industry." To make matters worse, India's educational establishment (like China's) is far too rigid. A recent example from BESU is revealing. A few years ago, science teachers there began keeping their labs open around the clock so enthusiastic pupils could drop in at any hour. Their students responded in droves and a more relaxed atmosphere began to prevail, with students sometimes showing up in shorts—a common sight in the West but comparatively rare here. After several years of this experiment, however, the administration abruptly ordered labs to return to their normal schedule and mandated that students must wear trousers, shirts and shoes on campus. "It seemed as if the dress code was more important than rigors of study," says Biplab Kumar Sikdar, an assistant professor of computer science.

Adding to India's problems is a conspicuous lack of vision amongst the bureaucracy and corruption at every level. "All this has affected the quality of our technical education," says Sikdar. One result: despite the large number of new graduates India rolls out each year, it only produces about 50 Ph.D.s in computer science, about the same number as an average public university in the United States.

To meet their rapidly growing demands for trained manpower, more and more top companies in both states have begun taking matters into their own hands, creating in-house training programs. In China, the trend was kicked off by Microsoft years ago. And in India, Infosys leads the way with 16-week comprehensive training courses that cost the company nearly $5,000 per employee. "The biggest challenge for India today and going forward will be how to create a skilled work force," says T.V. Mohandas Pai, an Infosys board member focused on human resources. "And the government is not waking up to this fact."

In fact, Delhi and Beijing are slowly moving in the right direction. In India, industry and scholars recently persuaded the government to ask two state education bodies to recommend ways to improve the country's high-tech and science programs. And in China, authorities have launched a drive to boost the reach and sophistication of technical training schools. Yet getting either country up to speed will be an enormous task. Which means the West can rest easy, at least for the moment—neither India nor China will leapfrog ahead anytime soon.

Employers in China who are fretting about surging salaries on offer to talented staff may be encouraged by evidence that employees are looking for more than a fat pay packet.

While job-hopping is rampant amid a talent shortage, there are growing signs that many mainlanders would be happy to stay with an employer if staying meant career development and a good working environment.

“Clearly the China market is hot and people are changing jobs for better pay. But pay is not the be-all and end-all,” said Gary Burnison, chief executive of U.S.-based recruitment firm Korn/Ferry International.

“People want to feel they are treated well and that they belong.”

In China, people often leave a company because they cannot get on with their immediate boss or feel they have no role to play, Burnison said.

Now some companies are making employee relations a big priority.

Nanfang Lee Kum Kee, maker of sauces and health products in Guangdong province, has introduced a “happiness index.”

Any time a manager meets a member of staff he’ll ask how happy the employee feels on a scale of one to 10. “If the number drops the supervisor needs to find out why,” said Sammy Lee, managing director of Nanfang.

“We want to make sure everyone is happy.”

This approach may be unusual in China but Nanfang enjoys a staff turnover rate of less than 10 per cent — in manufacturing where turnover rates of 50 per cent are not unusual — and was voted among the 10 best employers in Asia this year by global human resource company Hewitt Associates.

“Pay is not the key issue,” said Lee. “You’ve got to pay the market rate if you want to be competitive, but you also have to encourage staff to engage in their work and be happy.”

In a Hewitt survey, conducted every two years, career prospects replaced pay this year as the top motivation for employee engagement at 154 foreign and local companies in China.

“Compensation is critical in attracting staff but in terms of retaining people in China other things such as working environment, training and career opportunities become more important,” said Heather Wang, head of human resources for General Electric in China.

As a global company, GE can offer long-term careers in a variety of industries and countries but says it faces a challenge in developing staff quickly to keep pace with business expansion in China.

“We want people in China to get to the next level a year earlier than we would in more mature markets,” Wang said.

Career development requires investment in personal skills because Chinese workers often are held back by a rote-learning-based education system that stifles creativity, employers say.

GE says its China leadership program puts more emphasis on training in negotiating skills and working on projects outside an employee’s normal sphere of business.

A survey of multinationals by Korn/ Ferry shows a lack of innovation and creativity as the biggest challenge to finding leadership talent in China, after lack of international experience and poor ability to adapt to Western corporate culture.

Lee at Nanfang advocates “invisible leadership” that forces staff to take initiative.

He says he probably spends more time on the golf course, where he can think about strategy, than at work; delegates staff to deal with his e-mails; and does not possess a Blackberry or a computer, even in the office.

If the company is entertaining clients or holding events, staff decide how it will be organized.

“In most companies managers make the decisions and employees follow. We try to turn that upside down,” Lee said.

About 40 percent of the top students in college entrance examinations have chosen overseas universities for their postgraduate studies, according to a survey.

Most of them have stayed overseas after finishing their intended courses, showed a survey that tracked 130 top performers in college entrance exams from 1977 to 1998.

Dubbed zhuangyuan, which means top contestants in the imperial examinations in feudal China, these students have been lauded by the media as examples for their younger peers.

The survey, released on the China Alumni Association website, found it worrying that many of the top students would not stay in China for higher studies despite the country's rapid development in the past few decades.

The government should find better ways to hold back talented students, said Cai Yanhou, a professor with Central South University in Changsha, capital of Hunan Province.

UNESCO figures show Chinese students comprise 14 percent of international students, the highest in the world. Their favorite destinations for higher studies are the US, Britain and Japan. Some experts said handsome scholarships, better job prospects and more opportunities to pursue further studies are the main attractions of foreign universities.

But Cai, who also led the survey team, said "top in exams" does not necessarily mean "top in career" because the study found none of the top students at college entrance exams had become a top Chinese expert or academic.

The entrance exam is just one of the numerous exams a person will go through in his life and that can't foretell his future achievements, said Wang Xuming, a spokesman for the Ministry of Education. He criticized the media hype over the so-called zhuangyuan.

Some of them are just more adaptable to exam-oriented education than their peers, experts said.

The media fill pages and time slots with their "success" stories to gain wider readership and viewership. High schools promote their former students proudly to attract new ones, and universities want to show their superior status by recruiting them, they said.

Wang hoped future reforms would do away with the score-oriented method so that students can be judged from all aspects.

China Daily - Xinhua

China's prestigious Tsinghua University will recruit 134 teachers worldwide, the Beijing News reported here Sunday.

Tsinghua will recruit 49 professors or researchers and 85 associate professors and researchers, the paper quoted the sources from the University as saying.

"We will strictly verify recommendation letters, theses and other related information submitted by applicants to root out academic fraud," said an official in charge of personnel affairs of the university.

Tsinghua required the applicants from out of Tsinghua to submit at least five theses, and overseas applicants to submit at least three recommendation letters.

In March 2006, Liu Hui, a professor was removed from his post for fabricating his academic achievements and work experience.

Currently, Tsinghua encourages professors and associate professors from both in and out of Tsinghua to compete for the academic posts available each year as part of its reforms of existing teachers' employment system.

The recruitment will be terminated on October 10 and the final results will be unveiled by the end of December, university sources said.

Chinese Official Says 'Mass Incidents' Involving Labor Disputes on the Rise

BEIJING (AP) -- "Mass incidents" by workers have been on the rise in China as they struggle to protect their rights amid a roaring, fast-changing economy, a senior national legislature official was quoted as saying in state media.

Yang Jingyu, chairman of the Law Committee of the National People's Congress, China's legislature, was quoted by the official Xinhua News Agency on Wednesday as saying the number of labor disputes had increased by more than 13 times between 1995 and 2006.

He did not give any figures or examples, and did not define what constituted a mass incident.

China's communist leaders have been struggling with a widening wealth gap as the country's economy takes off, with urban areas and workers reaping vastly more benefits from economic reforms than rural workers.

"With accelerating industrialization and urbanization in China, infringement on employees' rights are occurring frequently," Yang was quoted as saying.

Yang said only 20 percent of small and medium-sized companies and private companies have signed labor contracts with their employees.

More than half of employers offer only short-term contracts to keep down costs.

"These problems have made it very difficult for the employees to protect their lawful rights," Yang said.

By Zhang Xi (chinadaily.com.cn)

Peking University released its recruitment plan for postgraduates on Sunday, which raised dissatisfaction of students from other universities.

Beida plans to enroll 4,300 postgraduates and 1,400 doctorial students this year, but not all college graduates can go there by taking an entrance exam. The prestigious university will focus on recruiting those who do not need to sit exams, but instead rely on the recommendations of the colleges where they received their bachelor degrees.

The plan shows of the prospective postgraduates studying sciences, 50 to 80 percent of them will be recommended. And at least half of the new postgraduates in other departments will also be recommended to Beida. In total, the university will enroll seven percent more recommended students than last year. As a result, only a few prospective postgraduates can enter Peking University by taking entrance exams.

In the past, half of those recommended students were from Beida, and the other came from other post secondary institutions. Peking University' s admission policy says only excellent graduates who are from prestigious universities and recommended by their colleges are entitled to enter Beida without taking postgraduate entrance examinations. However, very few students are lucky enough to get the chance.

A student at Capital Medical University is unhappy with the plan. "I think it's very unfair!" she exclaimed. "Although Beida will enroll 4,000 postgraduates this year, only half of them will be picked by the entrance exam." She continued, "Only one student in my class can be recommended. We just want to go to Peking University through our hard work. But how can we get in with such few chances?"

"I didn't do well in my college entrance exam four years ago," says Li Chen, a graduate at a university outside Beijing . "I wish to be a postgraduate in Beida by taking an examination. Can't postgraduate students get in even if they don't have a bachelor's degree from a top university? It's prejudice. All prospective postgraduates at Beida should compete in the entrance exam."

Peking University has its reasons to recruit more students through recommendation. Through their experience, supervisors of postgraduates have found that recommended students "have higher academic levels and tend to be more devoted to studying".

Professor Wen Rumin has worked as a postgraduate supervisor for a long time in Beida's Chinese Department. He says, "The university is doing the right thing since some prospective postgraduates are only good at taking exams rather than academic studies." He believes the academic levels of recommended students are higher than their counterparts who come to Beida by taking exams.

Wen did not think the recruitment policy is unfair because the most important goals of postgraduate education are guaranteeing the teaching quality and selecting qualified talent.

Other supervisors think many students come to Beida by taking the entrance exam and only want to get a degree from Beida rather than really study a subject. From this aspect, they are not as good as those recommended students, who are more welcomed by supervisors.

An educator and professor at Renmin University , Gu Haibing, said Peking University has right to decide how to recruit students. Universities and supervisors should be entitled to enroll suitable postgraduates, as long as the recruitment process is open and with essential supervision.

By Jude Blanchette | Contributor to The Christian Science Monitor

Shanghai, CHINA - The comprehensive labor law that China's top legislative body passed Friday includes provisions that have appeared in previous legislation. But what may be different this time, some observers say, is the government's willingness to enforce mandates protecting workers' rights.

Scheduled to come into effect on Jan. 1, 2008, the law stipulates that employment contracts must be put in writing within one month of employment. It also says that employers must fully inform the worker of the nature of the job and of their working conditions and compensation. Furthermore, it limits the ability of employers to use temporary laborers.

But the law's impact lies in how the government interprets and enforces it. "As is always the case with China's laws, the real question will be in whether the new laws are enforced, how they are enforced, and against whom they are enforced," says Dan Harris, an expert at the law firm Harris & Moure.

But, he adds, "there is a feeling the new labor law is more likely to be enforced than the old and, in particular, will be enforced against foreign companies."

Indeed, organizations representing firms doing business in China have objected to certain provisions they say are unclear. In comments last year, the US-China Business Council warned, "The Draft Law may … reduce employment opportunities for PRC workers and negatively impact PRC's competitiveness and appeal as a destination for foreign investment."

On Friday, Xin Chunying, the deputy chairwoman of the National People's Congress Law Committee, tried to allay the fears of foreign companies. "If there were some bias," she said, "it would be in favor of foreign investors because local governments have great tolerance for them in order to attract and retain investment."

The law gives oversight power to labor unions for collective agreements and the implementation of new employment regulations, but because independent labor unions are illegal in China, this duty will fall to the government-sponsored All China Federation of Trade Unions, an organization with deep ties to the Communist Party and local government officials.

Since the first draft of the law was made public in 2005, it has gone through three drafts and elicited more than 190,000 comments from the public.

In a statement issued Sunday, the European Chamber of Commerce welcomed the law's passage, in part because it moved the labor market in the direction that many European countries have gone. According to a statement posted on their website, "After the comprehensive drafting process, the European Chamber is not concerned about the effect of the law on European investment in China."

Since its emergence as an economic powerhouse more than 20 years ago, China has been dogged by criticisms of poor working conditions, the use of child labor, and willingness to placate multinational corporations.

Friday's law comes as the government tries to deal with these complaints and dampen social unrest in rural areas. Indeed, the government is in the midst of a campaign to reduce the impact of the recent discovery of slavery-like conditions in Shanxi Province's brick factories.

Early last month, more than 400 parents from Henan Province whose children had been abducted posted an open letter on the Internet. Their children, it came out, had been sold to work in brick factories in Shanxi Province.

It has since been revealed that thousands of others have met similar fates at brick kilns, many of which are unlicensed After Chinese journalists picked up the story, it rapidly spread around the world, causing outrage and shame in China.

Last week the draft law was amended to punish officials who ignore labor abuses with prison time or other penalties. Ms. Xin said that "The labor contract law makes detailed provision concerning this issue following the exposure of the forced labor scandals."

How to find a job in China (FAQ, information & tips)

USEFUL WEB SITE SERVICES FOR CHINA JOB SEEKERS:

To get a quick and easy list of China job postings, although limited, look at the following. Also a good idea to keep these in your pocket so you have one ear on the street all the time:

Check out China Insight's very own China job listing board, or list yourself on our China job seeker board.

Sign up with Asia Net, which posts jobs on its web site and delivers e-mail regularly with job postings. Will send e-mails specifically for jobs in Asia for people with Chinese, Japanese, and Korean language skills. Most are techie jobs, but once in a while something interesting comes up.
Wang & Li has all the top spots for Greater China, and competitive market information.
Alliance - mainly jobs for PRC locals, but an on-the-ground, professional recruitment group with exclusively PRC job listings.
Global Villager/ CareerChina has a full array of China oriented information.
Surf for jobs in China.

OUR PERSONAL ADVICE ON THE JOB SEARCH:

In our four years in Beijing, we have seen many friends come to China and find jobs. Many we have helped, and frequently we are asked the same questions by those considering taking the leap in coming to China. Briefly and succinctly, below are our own views on: the various paths people have taken, the types of jobs they have found, and advice if you are looking for a China job. This advice is primarily for college graduates or 20 somethings just getting their feet on their ground. If you have an MBA from a top business school or can command a top job by virtue of your experience, much of the below probably may not pertain to you.

Send us info on changes in the job market so we can update this page

MOST FREQUENTLY ASKED QUESTIONS:

Can I find a job?
How much can I expect to earn?
How and where should I start my job search?
How should I prepare before I come?
What are key issues when coming?
What’s important in the job search?
What types of jobs are out there?
What are key elements of a package?
What’s your final advice?
Return to (a little) China Insight main page

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DETAILED INFORMATION:

CAN I FIND A JOB? Yes. You will need to be resourceful, a bit lucky (all jobs are like that), and you may have to bite the bullet by sleeping on the floor of many apartments and eating fang bian mian (instant noodles) for several months, but it can be done. The key is being persistent, patient and lucky. More important is that you first set your own goals and parameters: what field do you want to be in, what salary do you expect, how long can you live without a salary, what is your ultimate goal in coming to China, etc.?

HOW MUCH CAN I EARN? If money is most important to you, you had best look first for a China job in the States or from Hong Kong. Any company that sends you overseas will most likely give you a full package plus great benefits. The downside is that these jobs are harder to find, especially if you have limited relevant experience; it also generally means working/training in the States for 1-2 years before heading over, but not necessarily. Even if money is not important to you, before you leave the States you ought to do a heavy job search on that end. If you find a job in China (see details below on compensation levels), they will most likely pay you less, although you can live well and still save money on a decent salary. See details on compensation below.

HOW AND WHERE SHOULD I LOOK FOR A JOB? Many people come and then look for a job. It's probably the true China person who chooses this riskier strategy. We do advise you to first look in the States, though, or in Hong Kong, before packing your bags. Hong Kong can be a prime job market, but unless you have a friend there, it is very expensive to stay and hang out. Who knows also? Maybe you get a good job in Hong Kong and they send you into Mainland China. Don't come here without first trying your luck in the US and/or HK. First try the web sites we recommend above, mailing out lots of resumes and using any network(s) you may have.

HOW SHOULD I PREPARE BEFORE I COME/WHAT SHOULD I BE PREPARED FOR? Be flexible: prepare all sorts of resumes, with different slants. Be prepared to be patient and not find a job for several months. At the very minimum, before coming prepare at least one resume with the "teacher" slant, as this is a sure backup to make money.

Also, if you arrive without a job, be prepared to spend 3 months getting settled, brushing up on your Mandarin, making connections and finally landing a job. Hopefully you won't need that long. Have at least enough money in your pocket to cover your expenses for this period. Figure about 1000 USD a month should cover you no problem, but that's if you are resourceful. The big chunk of that is housing, so if you find a dorm or crash with a friend, you can live on less. Many of us can live on 200 USD a month, outside of housing, in fact. Eat cheaply, not much western food, don't party a lot, take public transport or ride a bike, and live in a dorm, crash on someone's floor, or find a cheap hotel. Be creative. Housing and visas will be your main concern (see below), and oftentimes it's advisable to come first and study or work as a teacher, just to get your feet solidly on the ground and have housing and visa problems resolved right off the bat..

WHAT IS IMPORTANT IN THE JOB SEARCH? Get to know people: network, network and network. Send out resumes; reach as many people as possible. (But don't bombard us with e-mail). Many people who come as students also intern at companies or for the US embassy commercial section, or U.S. companies. The internships in the commercial sections can often lead to good job offers. Unpaid, but you are working for your future right? If you work in a certain sector of the commercial section, you'll be able to somewhat become an expert on it, and you can impress all those US companies in that sector who come through the embassy wanting to know about China. Latching on to a big multinational from the China side, save having incredible working experience or a top degree, is extremely difficult. However, local and many small western companies can offer interesting opportunities. Likwise, another advantage of coming on a study program first, particularly the better ones, is that they will help place you in an internship. This internship sometimes can turn into a job.

If you come to Beijing without a job, it is obviously better if you have some work experience or great Chinese. Best is both. You have an advantage if you can push one of these when job seeking. Take the position of the company you are interviewing with: why would they want to hire you? A Chinese person who is experienced and already knows the environment here earns probably 1/10 to 1/2 of the salary that you might command. Or a company could hire an experienced expat who knows their company and send them to China. Your chances improve if you have relevant US job industry experience or great Chinese. Gone are the days where good Chinese will get you by, or so I have been told. Many companies are also rethinking their China strategies and cutting back, and in the wake of the the rest of Asia's economic woes, the next year or so may be a period of retrenchment. But maybe you are just lucky. Remember, for as many local expats who say it's hard to find a job here, almost 90% of them, when asked how they found their job in China (and most got their foot in the door with little work experience behind them), will say, "Oh, I just got lucky."

WHAT ARE THE KEY ISSUES TO CONSIDER WHEN I GET OFF THE PLANE? Your immediate problems will be your visa and housing. Come to China on a tourist visa and you will most likely have to leave to change it's status or to extend the visa eventually, which may mean taking an expensive trip to Hong Kong. Because of the visa problem many people come and teach (resolves both visa and housing issues right off the bat) or come as a student (also resolves both issues). This allows you to get your feet on the ground and build up connections and language skills. If you come and then look for English teaching, they will seldom give you a visa. If you take the student/teaching path, you will usually have to be locked in for 6-12 months, but that's alright. Not cool to skip out on a teaching job.

WHAT TYPE OF JOBS/OPTIONS ARE THERE?

Teaching English
Being a student
Interning in the U.S. embassy/a western company.
Translating services
Legal assistant
Journalism
Business
Odd jobs for local Chinese companies
Be creative - think outside the conventional job box
Start something on your own - be an entrepreneur

WHAT SHOULD A PACKAGE INCLUDE? There are several issues here to consider, which I elaborate on below: salary, housing allowance, healthcare, vacation/plane ticket, visa, taxes, other issues.

Your package will depend if you are hired as an expat from abroad or a local hire. Obviously if you are brought in from overseas, you can expect [spam word detected] and a full range of benefits. Salaries range in the industry, but if you are sent here, figure you will get $25-100K, hardship posting pay, standard bonuses, housing allowance of at least $1500-6000 a month, 3-5 weeks paid vacation, and round trip air ticket once a year (and perhaps more for R&R leave time), full US standard healthcare, evacuation insurance through AEA, SOS, or MEDEX, tax coverage, shipping fees covered; and all other reimbursable expenses and training that would accrue to you as an employee. Sometimes language lessons are paid for as well. If you are high enough up or the position requires it, you will get a car and/or driver, a mobile phone, or at least have travel to and from work reimbursed.

If you are hired locally, the story is drastically different, and you should have no illusions about landing the above. Your compensation of course varies on the company, your background, the industry, and your position. Nevertheless, here's what you can expect, as an expatriate local hire:

SALARY: As a journalist or clipper, you might get $500-1500 a month and up; As a translator or legal assistant $15K - 30K; In business typical salaries are between $15-50K, but can be higher if you have experience in the industry or get lucky enough to latch on to a big company. As a teacher, you can earn $5-20 an hour, but work can be patchy. Remember that your salary is only as valuable as the rest of the package: housing allowance, tax coverage, health insurance, etc. can tilt the balance.

HOUSING ALLOWANCE: Housing in Beijing is the biggest ma fan (nuisance) for expats. Living in a _legal_ apartment can run $1200 at the cheapest, and up to $2000 for something reasonably located. Don't expect much for housing allowance, but figure the cheapest "non-legal" apartments will run about $300-600 per month. Lots of local expats live in these apartments. Some expat packages don't include housing; others will give you perhaps $1500 a month at most. Few local hire expat jobs will provide you an apartment - you'll have to find one on your own. If you choose to live in local housing, you can save money, but you will always live with the fear of the gong an ju (PSB) knocking on your door. (Yes, I've been booted from my apartment more than once, but that is another topic - see separate section - seeking local housing). The good news amid all of this is that housing prices are coming down in Beijing; overdevelopment has changed the real estate scene from a seller to buyer's market (though legal housing still ain't cheap), and the government has gotten a little more lax with living in "local" housing.

HEALTHCARE: Ideally you should get a US healthcare package or evacuation service through SOS or AEA, the two biggest providers in Beijing. Figure the US healthcare package to be worth $200 per month in your salary. If you get evacuation insurance (your parents would want you to have this), it will run the company $300 per year, but doesn't mean as much if you don't have health coverage also. (A visit at Beijing United Family Hospital is around $80). In Beijing, aside from Beijing United Family Hospital, you might check out AEA and IMC for western healthcare. Cheaper but OK are the Sino-German Health clinic or the Hong Kong Medical Clinic. Otherwise, if you go to a Chinese hospital, you'll pay less and still get decent treatment at Peking Union or The Sino-Japanese Hospital. There is a difference is the healthcare provision, though; I didn't spend three years setting up Beijing United for no reason at all! For inquires about Beijing United plans, send them an e-mail

VACATION/PLANE TICKET: Standard for an expat who signs on for 1-3 years is 3-4 weeks of paid vacation, and one roundtrip ticket back to the States per year. But sometimes you won't even get this.
VISA: Your company should handle this. If you are lucky, maybe they send you to Hong Kong every 3-6 months to get a new visa. This works out well (go buy some new clothes and get a needed rest from Beijing), and also helps you avoid taxes in China. Visas are a major tou teng (headache) if your company refuses to handle this for you. Insist on your company handling your visa and all related work permits.

TAXES: Big companies will handles your taxes for you (meaning what they quote you as your salary is after tax). Smaller ones probably will deduct taxes from your pay; others will not report it and leave it up to you. If everything is done in accordance to China and U.S. law, however, you can expect the following: Around 8% of your salary should be deducted for Social Security and FICA by your company (if it is a US company). If you earn less than $72,000 year (and if you don't, I'll trade jobs with you), you are totally exempt from US personal income taxes if you spend more than 330 days of the year outside the U.S. Just make sure you file (you get an automatic extension until June 1, by the way) the 1040 form as well as the 2555-EZ form available in the States or at the US embassy. If your company follows Chinese law (not all do), you pay a graded tax (meaning you pay x% on income from 0-3000 RMB/month; y% for the amount from 3000-5000 RMB/month; z% for the amount from 5000-7000 RMB/month, etc. - note figures not accurate). Whatever you earn, figure China taxes are less than your equivalent grade in the States. For example, if you earn 25,000, you might pay on average 20% income tax in the States (correct me if I'm wrong - I've never worked there!); in China, the level is closer to 13%. In short, if you are thoroughly confused: if you work in China, make a real salary, and follow all US and China laws, you pay less taxes than if you worked in the States for the same salary -- but not THAT much lower. If you can find ways to get the company to cover taxes, all the better. If you don't pay China taxes, the burden should be on your company.
Other issues: It's always good to get perks on the job: e-mail, mobile phone, pager, computer, reimbursed rides to and from work. Standard bonuses are a month salary or less, or if you are in sales, commissions. Throw these jobs in to sweeten the deal. Standard raises vary from year to year, but are between 3-15%.

FINAL ADVICE: No matter what job you land and what compensation you get, know there will always be someone who earns more than you. The grass will always be greener on the other side, as they say. Pick a job that you are interested in, and offers you a chance to develop. If you want to know China and speak Chinese, pay attention to the company culture: will you speak Chinese? Who are the expats? What life do they lead? At the same time, remember that you have to negotiate your contract. Look out for yourself, as no one else will; that's why we've written this and put it in public access cyberspace.

[Please keep in mind too this is written based on our experience, which is all in Beijing. We hear Shanghai is a good market, if not better than Beijing, and the terms may all be different. Also I haven't updated this; if China's rapid changes are any indication of change in the job market, maybe all this will be different tomorrow.]

FINALLY, will you be able to find a job? Of course. It may not be easy and it might not be what you like right off the bat, but there are jobs out there. Know what your goals are and also know how long you can stay without real employment (read: income). Worse comes to worse, you work on your Chinese and travel and witness first-hand the greatest economic and social revolution of all time. That's not so bad, now is it? The longer you stay and dedicated you are, the better your chances become of finding something interesting (and interesting jobs there are). Also remember that once you work, and if the job is demanding, you won't have time to bum around and see the craziness of Beijing/China. If you can't find a good job, use the time to study Chinese -- trust me, you'll never regret it.

This page authored by: Michael Wenderoth[/b]

Here are a few links that will save you loads of time finding a job.

http://jobs.amcham-shanghai.org - Quality jobs from many fortune 500 companies. Mostly managerial and Director positions.
www.51job.com - Top Chinese Website: Milions of jobs and viewers, but you gotta get past the advertising first.
www.zhaopin.com - similar to above. 2nd in race.
www.chinahr.com - linked with Monster. Similar to 2 above.
www.thishanghai.com - good variety of jobs, not always best quality.
www.asiaexpat.com - Shanghai page has loads of jobs. Good amount of traffic also keeps jobs fresh.
www.shjob.cn - Shanghai version of 51 job. Recently with multi million Euro injection.
www.chinaonline.cn.com - good site in general, but not loads of postings.

All of the above are useful in finding work, the Chinese websites are more catered to Chinese obviously, even though they do have english version. The local community websites, like Shanghai Expat, are good for general range of jobs and have good response to postings or requests. Chambers of Commerce are good to find quality jobs as their members have a majority of big companies, multinationals and such.
There are plenty of ways to find jobs in Shanghai and China, but websites are certainly a good start!

Employment Visa

(Z-visa)

Requirements:

1. One completely filled out Visa Application Form for the P.R. China (Q-1). Right click to save E-form, Pdf form, or Jpeg form.

2. One recently taken 2X2 in. photo showing entire face and without a hat on. Please affix the photo to the application form.

3. Original passport with at least 2 blank visa pages and valid for at least 6 months beyond the date of application.

4. An invitation letter or telegram from the relevant department of the Chinese Government or Government-authorized company.

5. Original Foreign Experts Working Permit issued by the State Administration of Foreign Experts Affaris, or orginal and copy of Alien Employment Lisense issued by the Ministry of Labour amd Social Security, or other relevant permit of employment.

6. The spouse or children of the Z-Visa applicant who are following the applicant to stay in China are required to be listed in the above-mentioned invitation letter or telegram. Otherwise original and copy of Marriage Certificate or Birth Certificate to prove their relationship are also required.

7. An applicant born in China who is applying for a Chinese visa with his or her new foreign passport is required to submit his or her Chinese passport or last foreign passport.

8. A child of Chinese descent and born in a foreign country who applies for a Chinese visa for the first time is required to submit his or her Birth Certificate and foreign passport or foreign permanent resident permit (e.g. Green Card) of one of his or her parents.

Reminders:

1. No visa application can be done through mail, email, internet, or any express delivery service such as UPS, FedEx, etc. Visa application should be submitted and picked up by the applicant or someone else entrusted.

2. Z-visa is generally valid for 3 month. Applicants should apply for a residence permit from a local county level Public Security Bureau within 30 days after entering China.

http://www.nyconsulate.prchina.org/eng/lsqz/VisasforChina/t42204.htm#4

BEIJING, June 28 -- State Grid Corp of China (SGCC), the nation's largest electricity transmission company, yesterday launched a worldwide recruitment plan for its five research and development (R&D) institutes.

Under the plan, the company will recruit 100 top scientists for its R&D work, including four academicians.

The five R&D centers are China Electric Power Research Institute, Nanjing Automation Research Institute, Beijing Electric Power Construction Research Institute of SGCC, Wuhan High Voltage Research Institute of SGCC and State Power Economic Research Institute.

The five institutes now have 2,699 staff members, including four academicians.

"The move will increase the company's R&D capabilities. Last year, we made many breakthroughs in the R&D field," SGCC said in a statement.

The company last year started to build China's first ultra-high voltage (UHV) transmission line. The pilot project will see 1,000 kilovolts of alternating current linking the southeastern part of Shanxi Province with Jingmen city in Hubei Province, passing Nanyang city in Central China's Henan Province.

(Source: China Daily)

BEIJING // China's legislature passed a sweeping new labor law yesterday that strengthens protections for workers across its booming economy, rejecting arguments from foreign investors that the measure would reduce China's appeal as a low-wage, business-friendly industrial base.
The new labor contract law, enacted by the Standing Committee of the National People's Congress, requires employers to provide written contracts to their workers, restricts the use of temporary laborers and makes it harder to lay off employees.

The law, which is to take effect in 2008, also enhances the role of the Communist Party's monopoly union and allows collective bargaining for wages and benefits. It softens some provisions that foreign companies said would hurt China's competitiveness but retains others that American multinationals had lobbied vigorously to exclude.

The law is the latest step by President Hu Jintao to increase worker protections in a society that, despite its nominal socialist ideology, has emphasized rapid capitalist-style economic growth over enforcing labor laws or ensuring an equitable distribution of wealth.

But it could fall short of improving working conditions for the tens of millions of low-wage workers who need the most help unless it is enforced more rigorously than existing laws, which already offer protections that on paper are similar to those in developed economies.

MUCH has been said recently about domestic retail banks doing all they could to pacify unhappy customers who suffer long hours of waiting in line.

Major domestic banks are now three months into their campaign to improve their customer service. I decided to make some observations to see if what we read and hear are what we get.

My first stop was at a China Construction Bank branch in Shanghai. Certainly fewer customers were in queue but only two counters were open during lunch hours. Behind the two cashiers were empty chairs.

Why do the bank's staff have to go for lunch together? Must lunch hours for retailers be the same time as for the customers, who obviously have less than an hour to return to their workplace?

As I planned to withdraw 3,000 yuan (US$394), I happily queued at the ATM behind a guy whom I later believed came from another city.

I walked off after waiting more than 15 minutes and made a suggestion to the floor manager. You see, this chap seemed to have an unlimited number of ATM cards and the beauty of it was that he probably did not realize he could withdraw a maximum of 2,500 yuan at one go. He kept punching in 500 yuan per withdrawal.

I then made my pilgrimage to Sichuan Road. Amazingly, the Industrial and Commercial Bank of China there was closed for lunch.

Finally, China Merchants Bank's main hall was less crowded and the service speedier.

It seems that Shanghai has a dire shortage of cashiers - tellers. I can think of only one solution.

Yup, up their starting wages and reward the good and faithful ones.

HONG KONG - Although the Chinese Communist Party still upholds the late leader Deng Xiaoping's policy of "building a socialist market economy", today's China in fact has the ugly features of unbridled capitalism at its early stage. One such feature is social injustice. And one of the rampant malpractices of social injustice is discrimination in employment.

While China now suffers a shortage of talents and skilled workers

in certain fields such as high technology, finance or management, the labor market in the country in general is still dictated by oversupply of labor given its huge working population. This enables employers to become very picky in hiring workers by setting up various discriminatory requirements. And job discrimination is found not only in the private sector but among government departments and government-related institutions as well.

In August 2005, the Standing Committee of the National People's Congress, China's parliament, ratified the International Labor Organization's Discrimination (Employment and Occupation) Convention, 1958. But surveys last year and recent media reports show discrimination in employment still runs rampant in the country.

Between May and October 2006, Cai Dingjian, a professor with China University of Political Science and Law, led a team to conduct a survey on job discrimination in 10 major Chinese cities - Beijing, Guangzhou, Nanjing, Wuhan, Shenyang, Xian, Chengdu, Zhengzhou, Yingchuan and Qingdao. The results show that discrimination in employment is a serious problem in China. Some 85.5% of the respondents said there is job discrimination, and more than half of all the interviewees said the discrimination is "very serious" or "considerably serious".

The poll finds that the most victimized are the disabled. About 22% of the disabled interviewees said their job applications had been turned down. Next are people with low education (18.7%) and then job-seekers who do not have local hukou or residency registration.

And employers do not hide their discrimination against the disabled, as 51.3% of the interviewed employers said that when they turn down job seekers for health reasons, they frankly say so to them.

More striking, 65.9% of the respondents say there is discrimination in the recruitment of civil servants. Excuses for the discrimination are low education (45%), absence of a local hukou (43%), disability (40.9%) and other health problems (40.7%).

"It may be reasonable for government departments to set education requirements for their employees. But it is by all means discrimination to require an applicant to have a local hukou. Does where one is from have anything to do with his or her capability to work in a government department?" Cai told the media when releasing the survey.

Moreover, he said it has been found that in some cases of civil-service recruitment there were discriminatory requirements regarding the applicants' sex, height and appearance. "Many courts demand [that] applicants have dignified features, saying this is to show the dignity of the law. This is nonsense," he said. An ongoing court case serves a good illustration in this regard.

Last June, the personnel and labor authority of Tiantai county, Zhejiang province, put up a notice to recruit three clerks for the local court. Hu Binbin, a 24-year-old local woman who had been working in the court as a part-time clerk for three years, filed an application. She failed to pass the physical examination because she was a bit shorter than the 158 centimeters required by the court. Hu then filed a lawsuit with the county court against the personnel authority for job discrimination, as no law and regulation sets a requirement on height for a court clerk.

Hu lost her case in the first trial. She then appealed to the Intermediate Court of Taizhou city, whose jurisdiction covers Tiantai county. The court hearing was held this April and the court has yet to pass down its ruling.

If there is such serious job discrimination in government recruitment, it is not hard to imagine how rampant the malpractice is in the private sector. And not only ordinary laborers but university graduates now also suffer discrimination in employment.

The rapid expansion of higher education over the past decade has resulted in an oversupply of university graduates, particularly those in humanities, arts and social sciences. Official statistics show that nearly half of the graduates could not find jobs after graduation last year. As a result, university graduates, who used to be regarded as "sons and daughters of heaven" and who never worried about employment, now also suffer discrimination when they compete with one another for jobs. According to a survey co-sponsored by China Central Television, 74% of job-seeking university graduates say they are discriminated against.

For university graduates, sexism is the most common form of job discrimination. Employers normally prefer men to women when they have a choice. Another survey co-sponsored by Sina.com showed that 60% of female graduates interviewed said they had more difficulty finding employment than their male competitors.

A boss of a trading company in Shenzhen does not hide his sexist view, saying it is out of "practical concerns". "I prefer hiring male staffers. A female university graduate would soon get married after taking a job. Then she would get pregnant and give birth to a child, taking a long leave. Afterward her mind would be occupied with her baby and could hardly concentrate on her work even during office hours. It's troublesome. In contrast, a male employee normally would be more career-oriented," he said, declining to be named.

There are now even cases that job seekers from the one-child generation are discriminated against. A civil servant from Tianjin municipality complains that his only son's job application has been rejected by several large state-owned enterprises, which all say, "We don't consider single-child applicants." The reason? Single children born after 1980 are generally spoiled, are unable to endure hardships, and cannot get along with others.

"Such discrimination is openly defiant against the one-child policy, which is a national policy backed up by law. The government must do something to stop such illegal practice," the civil servant said.

But since most youngsters in their 20s today are single children, how do these enterprises find employees? "They would look for university graduates from farmers' families, as the one-child policy is not carried out to the letter in the countryside. And even a single child from a farmer's family may be considered less spoiled," he said.

Job discrimination runs rampant because there is no legal protection for equal opportunity in employment. China's constitution stipulates, "Citizens enjoy equal right of employment." The Labor Law says, "Laborers enjoy equal right of employment and selection of jobs" and "Laborers shall not be discriminated against because of their ethnicity or religious beliefs." Except for such vague stipulations of principle, there is no detailed legislation on what should be banned as job discrimination.

China's fast economic development over nearly three decades has greatly benefited from globalization. To cope, the country has been trying to adapt to international practices by ratifying international covenants and conventions such as the Discrimination (Employment and Occupation) Convention, 1958. But after signing and ratifying such documents, China has rarely passed the necessary legislation for their implementation.

The International Labor Organization convention has a clear-cut definition of what constitutes job discrimination. If the Chinese government is serious about implementing the convention, it should work out detailed laws and regulations. Only in this way can the constitutional right of Chinese citizens to equal job opportunities be truly and fully protected.

Promulgated 12 years ago, the PRC Labor Law remains the fundamental piece of legislation governing employment relationships in China. Soon that will change. The draft PRC Employment Contract Law, expected to be promulgated in mid-2007, will effect wide-ranging changes to the regulatory environment for labor relations nationwide.

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We take pleasure in announcing that TransAsia Lawyers will soon be hosting the China Employment Contract Law Forum 2007 with the official endorsement and support of the PRC Ministry of Labor and Social Security (MOLSS). Senior officials from the National People's Congress, State Council, the MOLSS and the local labor bureaus of major cities will support and speak at the event. The forum will focus on the legal interpretation of the new PRC Employment Contract Law.

The Forum is scheduled for 23 - 24 July 2007 at the China World Hotel in Beijing* and will focus on the significant, wide-reaching legal interpretation of the new employment contract law. Several influential government agencies will be involved in the Forum: senior officials from the National People's Congress, State Council, MOLSS and All China Federation of Trade Unions will attend and speak. A number of leading multi-nationals will also participate.

Recommended attendance for:

CEOs
HR Directors and Consultants
Lawyers and In-house Counsel
Business Advisors
Academics

The forum will be the first time that senior PRC officials and legislators will appear on the same platform to discuss the new law. It will therefore provide a unique opportunity for attendees to hear authoritative interpretation of the law and to share their own thoughts directly with key individuals involved in the regulation of employment law in China.

To date, we have confirmed the following keynote speakers:

* Mr Zhang Shicheng, Deputy Director of the Legislative Committee, National People's Congress;
* Mr Li Jian, Director-General, Labor and Social Security Department, State Council;
* Mr Yan Baoqing, Director-General, Legal Affairs Department, MOLSS;
* Mr Qiu Xiaoping, Director-General, Wages Department, MOLSS;
* Mr Rui Lixin, Deputy Director-General, Legal Affairs Department, MOLSS; and

For an outline of the above speakers' topics, please click here.

* Mr Zhang Shouqi, Deputy Director-General, State Administration for Social Security;
* Mr Xu Shuli, Director, Wage Department, Beijing Labor Bureau;
* Mr Li Yanjun, Director, Employment Contract Relationships Department, Tianjin Labor Bureau;
* Mr Zhu Deliang, Director, Labor Disputes Department, Guangdong Provincial Labor and Social Security Administration; and
* Ms Isabelle Wan, Senior Partner, TransAsia Lawyers.

Additional distinguished speakers, including senior judges, local labor bureau officials, HR directors, and legal counsel from well-known multinationals, will participate as panelists.

We will continue to update this page with further details regarding the speakers and program of the Forum.

http://www.transasialawyers.com/pp.php?id=laborforum2007

China's draft Labor Contract Law, scheduled for final passage in June 2007, saw a number of revisions during the National People's Congress (NPC) third deliberation on April 24.

A translation of the third draft is provided for members' information, courtesy of Baker & McKenzie. Please click here to view the file. (147kb pdf). AmCham Shanghai is currently reviewing the document.

By Kent Ewing

HONG KONG - As Western countries worry over China's rise on the international stage, they hold a key advantage in the competition for power and influence: many of China's best and brightest go abroad for a university education, enjoy their lives in the West, and never return home to share their knowledge and expertise with the motherland.

A recent study by the Chinese Academy of Social Sciences (CASS), the nation's top think-tank, shows that China is losing more first-rate minds to the West than any other country in the world. The phenomenon amounts to a new form of colonialism in which Western countries exploit intellectual talent rather than raw materials.

China is not the only victim of this international form of brain-picking, but it tops the list. More than 70% of the Chinese students who go abroad to study don't return home, according to the study. Of the 1.06 million Chinese who have traveled overseas to study since 1978, CASS found that only 275,000 have returned.

And despite torrid economic growth of nearly 10% for the past three decades, the problem does not seem to be getting any better. In 2005, 118,500 students left China for study abroad. By 2010, 200,000 are expected to enroll in foreign universities.

All told, according to CASS, the Chinese diaspora holds 35 million people scattered in more than 150 countries, making China the world's largest source of emigrants.

Yang Xiaojing, one of the authors of the study, was pleased by the international competitiveness of Chinese students but worried about the country's future if the brain drain continues.

"This shows that Chinese students overseas, especially those with extraordinary abilities, are a real hit in the global tug-of-war for talent," he told the state-run China Daily. "While strictly controlling the inflow of foreign labor to protect the interests of [their] domestic workforce, most developed countries spare no effort to attract the best talent from around the world."

Yang added this warning: "Against a backdrop of economic globalization, an excessive brain drain will inevitably threaten the human-resources security and eventually the national economic and social security of any country."

Previously, Beijing had embraced the concept of "brain circulation". The aim was for students to study in the West and then bring back their expertise to China for the advancement of the motherland. In addition, emigration reduced competition in the job market, which is cutthroat for university graduates in China, and brain drain seemed of no great consequence in a country where last week 10 million students sat the annual university entrance exam. Emigration also brings US$20 billion in annual remittances to the country from Chinese living overseas, according to a 2006 United Nations report.

But with seven of every 10 students remaining abroad while China suffers from a dearth of expertise in important sectors of the economy, the thinking in Beijing has changed. Now the government is offering incentives for students and professionals to return. Issued in March, these include exempting professionals in undermanned fields - science, engineering, and corporate management stand out - from the burdensome hukou (house registration) system, which can limit where a person lives and works.

Low-interest loans and higher salaries are also being offered to returnees, as well as coveted places for their children in the country's most prestigious universities. The Ministry of Personnel has even called for "a talent security alarm system" to monitor emigration.

Meanwhile, the diaspora continues to expand. What will it take to persuade those who are potentially some of China's best and brightest stars to come home?

"Of the many reasons for the brain drain of Chinese students," the CASS study said, "huge social and economic gaps in terms of personal income, employment opportunities, working conditions, research facilities and living standards are the main ones."

Put plainly, talented graduates can make a lot more money outside China, enjoy a better work environment, avoid rampant corruption, and plan a family without worrying about the one-child policy.

Emigrants must also be daunted by the unemployment rate for university graduates in China. Since 2002, it has averaged 30%. Part of the problem is the education system itself, which has been unable to keep up with the rapidly changing needs of Chinese society. There is a shortage of qualified faculty and courses in finance, management, information technology and other fields that are in growing demand in the booming Chinese economy. At the same time, there are far too many graduates in the humanities and social sciences who battle for jobs in a glutted market.

The potential for social unrest among unemployed students rightly worries the Chinese leadership. Those worries must have been heightened last week when a riot ensued after a female student was beaten by city inspectors for illegally selling fashion accessories on a street in Zhengzhou, the capital of Henan province. The rioters were mostly other students from different universities in Zhengzhou.

The Zhengzhou incident is a painful reminder that the Chinese educational system is caught in a difficult catch-up game with the country's runaway economy. It is no wonder that gifted students opt to go abroad and that, once there, many choose not to return.

Despite the large numbers, however, the Chinese emigration problem pales when compared in percentages with places in the developing world. World Bank figures show that a quarter to half of university-educated professionals in the world's poorest countries live abroad, and the figure is as high as 80% in Haiti and Jamaica.
The brain drain is particularly acute in Africa, a continent that will need its educated professional class if it is to rise out of its post-colonial mire of poverty and corruption. But how can a country like Ghana cope with the challenge when 47% of its university-educated citizens live abroad? Things will also be tough in Mozambique, which has lost 45% of its educated class, and in Kenya (38%), Somalia and Angola (both 33%).

The list goes on. Indeed, there are more African scientists in the United States than in all of the 54 countries of Africa.

It is hard to blame students for fleeing their impoverished homelands for greener educational pastures when 90% of the world's funding for research and development in higher education goes to the US, Britain, Australia, Germany and Japan. Developing countries simply cannot compete in the global contest for talent. In an age where, more than ever, knowledge equals power and wealth, this amounts to a new form of colonialism holding poor countries back.

While in sheer numbers the world's most populous countries - China and India - appear to suffer the most from brain drain, studies show they lose only about 5% of their graduates. For China, however, that has become too much as it sorely needs the expertise of many of its citizens living abroad.

No doubt a Shanghai survey published this year in the Labor Daily has added to official concern. The survey showed that 36.9% of the city's middle-school students hope to become US citizens one day.

Businesses are turning to MBA students from China because they believe too few British graduates have Chinese language skills, according to a report.

Meanwhile, staff at Liverpool John Moores University used graduation ceremonies this week to protest against the cutting of Chinese studies as part of a reform of its language school.

Forty-one per cent of business leaders surveyed by the Hay Group consultancy said they planned to recruit Chinese MBA graduates.

Universities produce fewer than 500 graduates a year from programmes in which Mandarin forms a substantial part and the report's authors said the lack of linguists would lose the UK opportunities in the Chinese market.

Deborah Allday, one of the authors, said: "We are about to face a war for talent both in China and in domestic markets as companies scramble to recruit talented leaders and managers with an understanding of the Chinese market and business culture.

"The British government needs to take a fresh look at the higher and further education curriculum in this country to determine the best way to make UK graduates and UK plc competitive in the global market place."

She said companies should demand that all MBA students they fund should do a China module on their course and that the government should introduce more Chinese language teaching.

The study, based on interviews with business leaders in Europe, north America and Asia Pacific, found that British business expects sales to China to be worth 10 per cent of their global revenues by 2009.

Managers at Liverpool John Moores decided to drop courses in Chinese to concentrate on those in higher demand and with greater growth prospects.

Don Starr, president of the British Association of Chinese Studies, said: "It is a very resource intensive subject to learn and it is therefore expensive to teach. Because the funding does not recognise that extra cost, vice-chancellors find it cheaper to offer subjects like English and psychology that can be taught in large lecture theatres."

The school system was compounding the problem, he added.

"Private-sector schools have been introducing Chinese in large numbers but the government has allowed 14-year-olds in state schools to drop languages entirely."

The Higher Education Funding Council for England said it would work to find alternative universities for the 15 places that will be lost each year.

Teresa Tinsley, assistant director of the National Centre for Languages, said that although the number of people taking A-levels and GCSEs in the subject had steadily increased, the overall number still remained tiny.

"It is alarming that employers are turning to foreign students with Chinese language skills because that will make them less likely to tackle the shortage of UK nationals," she said.

The UK must educate its workforce to compete in the global knowledge economy, writes Lara Williams

A skills crisis in the software development sector could seriously damage the UK’s ability to compete globally, according to the second of the Microsoft-commissioned Developing the Future (DtF) reports published last week.

The IT industry is growing five to eight times faster than the national average and needs 150,000 new entrants each year. But the number of students taking A-level computing has dropped 43 per cent from 2001 to 2006, and IT-related degrees almost halved ­ from 27,000 to 14,700 ­ between 2001 and 2005.

Technology skills are vital to the growth of the UK as a knowledge economy ­ one relying on high-level skills rather than a manufacturing base or large pools of cheap labour.

At the moment the UK knowledge economy accounts for 41 per cent of gross domestic product, but the proportion is expected to rise to 50 per cent by 2010.
And without the right skills, the country will not be able to compete with overseas rivals. But it is not only established economies making the transition.

At the current growth rates China will surpass the UK in the near future, says Microsoft UK managing director Gordon Frazer, who is also a board member of sector skills council e-Skills UK.

‘The shift towards the knowledge economy in the UK presents great opportunities but we must be aware of the skills challenge,’ said Frazer.

The DtF warnings are not new. Only last month a government advisory group, the Information Age Partnership (IAP), released a report calling on government, industry and academia to work together to meet the needs of the EU i2010 knowledge economy agenda.

The IT industry does not simply need more people, says e-Skills UK chief executive Karen Price.

‘Whether I am talking to the IT industry or the chief information officer community, they are all telling me it is not the shortage of people but developing the right skillset to compete in the global marketplace,’ she said.

UK universities remain world-class at producing traditional computer scientists for research and development roles, says Price. But there are also vital non-technical requirements.

‘The new market opportunity is people combining business and technology skills and that is where the growth and skills shortage lies,’ said Price.

The private sector has a central role to play, says Paul Smith, managing director of offshore software development at recruitment consultancy Harvey Nash.

‘If each decent-sized company were to commit to providing excellent on-the-job training today, sponsoring students next year and working with a partner university on designing and funding a vocational course, the UK would be back on track in five years’ time,’ he said.

DtF recommendations include: a curriculum review of IT teaching in schools; encouragement to large software companies to enhance their education programmes; and pilots to establish how to form effective links between industry and academia.

Beijing - When a British-based labor consortium charged this week that factory workers as young as 12 are toiling to produce gear and souvenirs licensed by Beijing for its 2008 Olympics, China's reaction was swift.

Beijing officials announced they would deal "seriously" with factories that violate China's "very strict" labor codes. But the negative publicity – along with other reports that the problem goes beyond production of Olympic-related memorabilia – comes at a sensitive moment for Beijing as it seeks to burnish its international image ahead of the games.

Some observers say that the latest reports represent a weak point in China's otherwise strong record of enforcing child labor laws – especially at a time when child labor is on the decline worldwide.

Playfair Alliance, which targets sporting goods and athletic merchandise, reported this week that child labor in China is not limited to a few factories making Olympic souvenirs but may be a growing, potentially widespread problem spurred by increasing labor shortages and rural poverty.

Another survey report from the Hong Kong-based China Labour Bulletin, which investigated a growing underage labor force in several small towns, found that poorly funded rural schools and a higher-than-recorded school dropout rate are forcing many children to work before the law allows.

In small towns across the vast Chinese countryside, kids age 13, 14, and 15 – below the legal working age of 16 – are entering the workforce as factory owners and other employers turn a blind eye, according to the report.

"Looking at the results of our on-site surveys, and reports in the Chinese media … we do not believe that the child labor problem in China has been suppressed that effectively," said the China Labour Bulletin's report.

A 2006 study from the International Labor Organization (ILO) said that overall, child labor has been reduced by 11 percent in the past four years worldwide.

Despite the recent studies, conclusive figures aren't available in China, so no true comparison is possible. The Chinese government considers the topic too sensitive to allow international groups to conduct widespread national investigations of how many under-age workers appear in the labor force.

With the problem not yet quantified, labor-rights groups are relying on bits and pieces of information they can gather by interviewing factory workers, families, and school authorities. The anecdotal evidence shows increasing pockets of child labor, especially in the poorest areas and in factories that operate as subcontractors to major producers.

"We haven't done a national study, but the assumption is that this is a national problem and therefore deserving of attention from the national government," says Robin Munro, research director of China Labour Bulletin.

Some officials doubt reports
Even with the new charges regarding Chinese child labor infractions, some officials doubt the credibility of the China Labour Bulletin report. Constance Thomas, director of the ILO for China and Mongolia, says that without a thorough, conclusive study of the national scope of the problem, no one knows for sure what's happening. Ms. Thomas has been trying to convince the Chinese government to undertake a major prevention campaign, but the mere mention of child labor has been too sensitive.

Thomas says she doesn't see a widespread problem, especially when comparing China with countries like Pakistan and India where children age 8 and 9 are routinely found working. China's doing pretty well, she maintains.

"We're not picking up yet on any large numbers of child labor; we're just not," says Thomas.

However, she says, "There are pockets of child labor, and my concern is that they may be growing."

There are "magnet factors" that could lead to a growing reliance on child labor, Thomas says, and China, with its previous track record in avoiding child labor, should address them. The three magnets, she says, are pockets of labor shortages, increasing numbers of privately owned business, which are more prone to unscrupulous hiring, and the huge mobility of the nation's workforce.

Migrant work contributes to problem
China has as many as 200 million migrant workers who have left hometowns and provinces to fill its factories. At least 20 million of their children have been left behind with relatives and the kids are often forced to work when they reach their teenage years. Those who travel with their parents face prohibitively high school fees that can make work seem a more plausible option.

China needs to play to its strengths, says Thomas and others. For one, its standards are higher than the ILO's, which considers anything under age 13 child labor. The Chinese government has set its minimum working age as 16, with limited working hours, or 18, for dangerous jobs with longer hours.

Anita Chan, a China labor scholar at Australian National University, says quantifying the child-labor problem is difficult, particularly when the country is having a difficult time enforcing labor standards for adults. In any case, she says, the country should stay firm to its strict anti-child labor laws and enforce them. Certainly, she says, government officials must realize that in addition to giving a country political problems, child labor can have basic economic consequences.

"If you hire a lot of children, the grown-ups won't have jobs," says Ms. Chan.

HONG KONG, June 12 (Reuters) - A new employment law in China will increase labour costs for foreign companies and restrict their flexibility in hiring staff, Australian law firm Minter Ellison said on Tuesday.
However the law, expected to go into effect in January, will also make it easier for companies to make large-scale layoffs in certain circumstances, such as bankruptcy.

The law is partly aimed at protecting employees in the private sector, lawyers say, and keeping up with changes in the labour market as a result of China's rapid economic expansion.

Thirty percent of new jobs in the country are now in service industries and private enterprises have replaced state-owned enterprises as the major employers.

"The greater part of the workforce is now employed by private enterprises and that brings a fear that those organisations don't necessarily have the interests of workers at heart," Pattie Walsh, an employment lawyer at Minter Ellison, told a conference in Hong Kong on Tuesday.

Foreign companies, which have flocked to China to tap into the country's booming economy, have favoured fixed-term employment contracts for local employees as laying off staff in China is difficult.

But under the new law, all companies will have to pay compensation at the end of a fixed contract and will have to allow employees to switch to an open-ended contract after twice renewing a fixed contract.

Lawyers also say probationary periods will be less effective because an employer will have to show evidence that an employee has failed to perform during probation before they can dismiss them.

"That means a company will have to monitor the employee during the probation period much more closely and will need to set criteria or an appraisal system so they can prove that an employee is not fulfilling the role," Walsh said. "This will put more pressure on the employee selection process to get the right people in."

Some analysts say foreign companies are being targeted in a drive to increase unionisation and U.S. retailer Wal-Mart Stores Inc and fast-food chain McDonald's , which has been accused of breaching minimum wage laws, are among companies that have moved to set up branches of state-backed unions.

Walsh said an existing employment law, introduced in 1995, is not always enforceable because it applies differently depending on the region and is often ignored in favour of local practices.

A final draft of the new labour contracts law is expected to be published within weeks and lawyers expect it to become effective on Jan. 1, 2008.

Many employees in China are working without formal contracts but the new law will require every employee to have a written contract drawn up within a month of starting work and companies will be liable to pay compensation if there is no contract.

Companies will however have more flexibility to lay off large numbers of staff in the event of bankruptcy, production difficulties, relocation to prevent or control pollution and changing economic circumstances.

Walsh said this indicated Beijing was bowing to pressure from companies to enable them to take difficult decisions when they go through tough times.

The law will also modify a "non-compete" clause, enabling a company to stop a senior member of staff or some other employee with confidential company information from joining a competitor within two years of leaving the company by providing compensation. Under the existing law the term is three years and is not restricted to senior staff and other special cases.

The terms of compensation will be agreed between the employer and employee when the employee first joins the company.

Lawyers said the "non-compete" clause helped companies protect their intellectual property and was a step ahead of some other jurisdictions.

With China's economy still at high speed and corporate profits and wages on the upswing, this should be a golden time to be a newly minted university graduate. After all, multinational corporations have been complaining that they can't find enough qualified people to hire. Factories along the coastal regions have been hit by a shortage of migrant workers.

But guess what? For college seniors graduating this spring, finding a job has been a real struggle. There are simply too many of them to absorb even for a growing economy like China. Just ask Yang Hanning, who will be graduating with a degree in computer science from Tianjin University of Commerce in July. He has sent out dozens of r sum s and been called back for an interview for fewer than 10 companies. He has yet to receive a job offer.

"All of the jobs I've applied for are looking for people with experience. They give us recent graduates the cold shoulder," Yang, 23, laments. In fact only three out of his 22 classmates in the computer science department have received job offers so far, and none of the jobs has anything to do with their major.

Cutthroat Job Market
In 1977, the first year that Chinese university enrollment resumed after the trauma of the Cultural Revolution, only 4.7% of applicants, or 270,000 students, were accepted into college; a carefully managed trickle. And those lucky kids generally coasted into a stable job in a government ministry or state-owned enterprise. It was the fabled era of the "iron rice bowl" in which college grads received subsidized housing and rock-solid job security.

China's evolution since then into a more market-driven economy has also meant a far more cutthroat job market. This spring, 4.95 million seniors will graduate from colleges across China, nearly five times as many college graduates than China produced seven years ago.

"There are a lot of people in China. Everybody has a college degree and they're all competing for that one opening," said Liu Chao, 21, who will be graduating in July with a degree in computer science from Beijing Information Technology College. The joke floating around college Internet chat rooms is that college students nowadays are like cabbages: There's an abundant supply of them and their price never goes up. A Man A Woman

A Man A Woman

Flood of Unemployed
The reason universities are churning out record numbers of graduates every year is rooted in the Chinese government's decision to expand university enrollment starting in 1999. With the Chinese economy slowing during the Asian financial crisis,Asian Development Bank economist Tang Min in 1998 proposed expanding university enrollment to boost domestic consumption. China was closing down state-owned enterprises and laying off millions of workers at the time, so it seemed like a good idea to send some of the 3 million high school graduates in 1999 to college and delay their entry into the job market.

Today it is unclear exactly how many recent college graduates are unable to find a job. Since 2001, the official figures from the Ministry of Labor and Social Security [MOLSS] claim that roughly 30% of college seniors have not signed an employment contract by the time they receive their diplomas in July, which is a typical number for the U.S. and other developed nations. In China, however, that would mean nearly 1.5 million recent graduates will be flooding the job market this summer.

"The MOLSS tabulates the unemployment figures for blue collar workers and doesn't really care about white collar unemployment. College graduates are white collar. The MOLSS doesn't know how many of them are unemployed and doesn't care," said Yao Yuqun, professor at Renmin University's School of Labor Relations and Human Resources. He added that unemployed college graduates are not counted in China's official 4.1% unemployment rate.

Spoiled Only Children?
However there is anecdotal evidence to suggest that it is a growing problem that has attracted the government's attention. Last November, a graduate student from the prestigious Tsinghua University committed suicide because he was unable to find work. Starting last year, college graduates who have been unable to find work by Sept. 1 have been allowed to register as unemployed with their local government offices and receive unemployment benefits.

Older Chinese complain that the current crop of college graduates born in the 1980s under the one-child policy have been coddled by their parents. Unlike their parents who dutifully went to work wherever the state assigned them, this generation of Chinese are pickier about where they live and where they work.

"Some college graduates will only work if they find a good job. If it's a regular job, they won't do it," noted Sun Baohong, head of the Shanghai Academy of Social Sciences' Institute of Adolescents.

Please Stay Home
College graduates expect to land nice white collar jobs after graduation. The reality is that China's economic growth is still largely driven by factories needing cheap, low-skilled workers churning out products for export. Hence, chief executives complain that they receive a mountain of r sum s for administrative positions but are having a hard time filling openings on the plant floor.

Most college graduates have also shunned the countryside and flocked to China's major metropolitan areas, such as Beijing, Shanghai, and Shenzhen, to find jobs. The government has been trying to entice college graduates to spend a year or two working in rural areas after graduation by giving them bonus points if they apply to graduate school later. But young Chinese say that one reason they prefer to go to major cities to find work is because they feel the playing field is more level there, unlike in the countryside where "guanxi" or connections are needed to find jobs.

Companies say that China's educational system, which stresses rote memorization, turns out college graduates who can perform repetitive tasks efficiently but cannot think "out of the box" to attack problems creatively. Often college graduates simply can't do jobs they are hired for without further post-graduate training.

Experience Worth the Price
A European startup working on applying artificial intelligence to business cases moved its research and development operations to Beijing last year to take advantage of the cheap cost of Chinese software programmers and found this out the hard way. It originally posted job advertisements on the Internet and hired seven recent college graduates only to discover that some of the programmers were unable to write simple computer programs.

In February the company decided to start over from scratch. This time it hired a headhunter to find programmers with 5 to 10 years of experience. Even though it costs up to 10 times more to hire experienced programmers, as opposed to hiring fresh college graduates, the decision turned out to be worth it. "Of course the salary is different but you don't have redo their work and the work is higher quality. They would probably be actually cheaper than hiring fresh college graduates," said Nicolas Piguet, co-founder and R&D manager of the startup.

To be sure, many recent college graduates are aware of their shortcomings. They cite training and room for career advancement as one of the main factors when choosing where to work. "A lot of companies neglect career training. I don't get the feeling that I would learn a lot at these companies," said Jia Zhanjie, 24, who will be graduating with a degree in chemistry from Beijing Normal University. Even though he already has a job offer, he was still trolling job fairs on the weekends to see if he could find something better.

Limiting Number of Students
Not surprisingly, more and more college students are going to graduate school before entering the workforce. "After I return with my master's degree, it'll be easier to find work," said Luo Binhan, 23, who graduated with a degree in insurance from Wuhan University in 2005 and has taken the past year off to apply to graduate school overseas. However in the last couple of years Chinese students with graduate degrees have also found it harder to find work.

The Chinese government has started to take steps to improve the quality of education. The central government will invest 10 billion yuan [$1.3 billion] between 2006 to 2010 in vocational and technical schools to create more skilled workers. With factories facing shortages of skilled laborers, 95.6% of vocational school graduates had a job offer by the time they graduated last year.

Last year, the Ministry of Education also began to limit the number of incoming freshmen universities could accept to no more than 5% more than the year before. The rapid expansion of college enrollment had led to a shortage of qualified professors, leading to a drop in the standards. Renmin University's Professor Yao said, "A lot of people have been complaining to the Ministry of Education that their children can't find jobs. Expanding university enrollment has lost its attractiveness."

BEIJING--Will globalization someday stick it to the man?

Excessive executive pay has been a hot-button issue in American politics for years, but worldwide factors could one day make it a liability on the balance sheet.

As companies in countries like China and India move away from performing behind-the-scenes functions, they're selling products and services under their own brand names directly against U.S. and European counterparts.

Since high-level executives and other white collar professionals in Asian companies typically make less than their Western equivalents, these companies potentially will have a cost advantage.

How or even whether the differences in executive salary will impact the market remains unclear: multinational companies are hiring their own executives in these regions, too, after all. Nonetheless, the numbers are tough to ignore: engineers aren't the only "talent" that costs less in developing markets. Executives cost a lot less, too.

Shanghai's SunTech Holdings, for instance, has moved from being a bit player in solar panels to becoming one of the largest manufacturers in the world. Most of the company's panels end up overseas, and it can produce those panels more cheaply than American competitors for various reasons. Among them: the company isn't lavishing huge compensation packages on its executives.

"There aren't 10 executives in the company that make more than $200,000," said Steve Chan, vice president of business development at SunTech Power Holdings.

U.S. execs make far more. In a survey conducted by Forbes last year, the magazine found that the average big company CEO made $3.3 million in salary and bonuses.

It trickles down from there. Chinese engineers make about one-third to one-half the salary of their U.S. counterparts, said one executive who runs Asian operations for a U.S. high tech firm. Marketing execs can make about half as much as their stateside colleagues.

"If you have one (marketing manager) that makes about $100,000 in the U.S, you can hire one here for $50,000," he said.

Professional services firms also pay less than U.S. counterparts, said Ted Dean, managing director of BDA, an analyst firm specializing in Asian markets. New college graduates hired by services firms might make $400 to $500 a month, or $4,800 to $6,000 annually. A well-regarded person with years of experience might make $30,000 to $50,000 annually. In the U.S., the same person can graze around the $100,000 mark.

While executive compensation can be absorbed somewhat in manufacturing companies, it can be pronounced in purely white-collar service operations. Panorama Media Holdings, based in Beijing, sells high-resolution photos to advertising agencies, similar to Getty Images and Corbis.

Panorama, though, can sell its products for an eighth the price, according to Wayne Shiong, a partner in venture firm WI Harper, an investor in Panorama. Wherever Getty charges $50,000 for services, Panorama can charge 50,000 RMB (China Yuan Renminbi), or about $6,600.

Panorama primarily sells its photos to Asian advertising agencies. Shiong, though, said that the multinational photo outfits have not reacted to lower their prices for the local market. Additionally, Panorama is contemplating taking out office space in New York to test out the international opportunities.

The Spartan start-up
The pay discrepancy starts during the start-up phase. Founding CEOs of some Chinese start-ups deliberately take low wages to keep costs down, according to Shiong and others. The CEO at a company that's just finished a Series A round of funding might pay himself 500,000 RMB a year, or about $67,000.

Documents filed by Chinese companies with the Securities and Exchange Commission back this up. Focus Media Holding, which specializes in outdoor advertising kiosks, paid $100,000 to its two executive officers in 2004 combined. In 2005, the year the company went public on Nasdaq, Focus had 13 executives and directors and the total pay for all of them for the year was $512,947.

In 2005, the company's four executives and directors pulled in $100,000 combined. The four executives and directors of Trina Solar Limited pulled in $128,039 in 2005. None had severance packages, the filing states.

Compare that to a pre-public U.S. company. DivX, which makes media software, paid its top five execs about $1 million in 2005, the year before it went public. Shutterfly paid its top five people $1.1 million the year before an IPO--only one made under $210,000.

Chinese executives make their wealth in stock options, which U.S. execs get, too. Suntech founder Shi Zhengrong is considered one of the richest individuals in China, with a net worth exceeding $2 billion, according to various studies. Focus awarded 22.5 million in options to executives and employees in 2005. Salaries also rise after an IPO, but generally not to U.S. levels. One reason, of course, is that the cost of living is lower. Someone making $50,000 in China will likely be able to retain a driver and other household help. That's not enough to rent a decent one-bedroom apartment in many American cities.

Conversely, to expand internationally, Chinese companies have to hire U.S. and European executives, who will command U.S. salaries. Suntech's Chan said that will be an issue for his company. In the first few years of the company's growth, the salespeople came out of China. Expanding internationally will also take quite some time.

Victor Canto, chairman of La Jolla Economics, added that many executives in Asian companies will also leap to U.S. competitors to get salary raises. "That will decrease the disparity," he said.

Still, in the end, multinationals of course have some of their higher-level people in more expensive countries, so a discrepancy should be expected.

"Foreign vendors might be able to achieve comparable manufacturing costs, but they still will have a huge R&D lab in Finland," said BDA's Dean.

An interesting article from China Law Blog:

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Nearly every week, I get a couple e-mails and/or calls from earnest law students seeking pearls of wisdom regarding how to break into international law or China law. I usually talk about the need to learn as many languages as possible and about the benefits of having lived overseas. A couple years ago, I gave a speech on international law careers at Indiana University School of Law and I am scheduled to be on a international law career panel at Seattle University Law School later this month. I am an expert on these issues only to the extent that I am in the business and I have very definite ideas as to what it takes.

I have no idea if my ideas on this would hold up to analysis, but I at least now know my views are part of the mainstream. Chris Carr over at the CalPolyMBA Blog just did a post, entitled "Critical Success Qualities for Expat Managers in China," summarizing what CEOs look for in choosing their China managers. This list comes from the book China CEO: Voices of Experience from 20 International Business Leaders (of which I have heard many good things and I have just started it). Interestingly (but not surprisingly) the traits these CEOs seek in their ex-pat managers for China are pretty much the exact same traits I find necessary to be a good international lawyer. Here is the list, with my comments in italics.

1. Technical and Corporate Expertise: Select people with a rock-solid professional background and an excellent knowledge of the company.

Yes. In the legal arena, this means get smart people.

2. International Expertise: A posting in China becomes vastly more manageable after an assignment either in an Asian location or another developing market, or both.

Absolutely. The key here is that the person who has spent time in another country tends to be better equipped to deal with other countries, including those countries to which he or she has never been. I have seen this time and again with both lawyers and clients. We have many clients who when their business dried up in one country moved nearly effortlessly to another country. We also see domestic companies that simply cannot make the leap to go international at all, when they really should. What you learn in one country (but obviously not everything) does help you in another.

3. Multicultural Mindset: When selecting an executive for an overseas posting, look for someone with an adventurous spirit, a sense of humor, and an open mind.
I completely agree and this applies to lawyers as much as to anyone else. In an article I wrote a long long time ago on doing business in emerging market countries, I stressed (and stressed again .... so I was repetitive back then):

Doing business in an emerging market means taking nothing for granted. I have a mantra for my own legal work in these countries that translates well to the business world: "Assume nothing, but assume that you are assuming things without even realizing you are doing so."
Things will be different. Very different. Things you take for granted in your home country might not exist in the emerging market country. Things you take for granted in your home country might be the exact opposite in the emerging market country. Things you think will be totally different in the emerging market country may be exactly the same. Things you thought you knew about emerging market countries based on what you know from another emerging market country may be completely different in a neighboring country, or even in another region within the same country.

The principle, one more time: Keep an open mind, and assume nothing.
4. Commitment to Learn: Learn from those around you. Listen to your employees, JV partners, clients, and customers.

Of course.

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5. Humility: Be humble and avoid using an authoritarian style. Influencing and coaching is the way to get the best out of your Chinese employees.
Yes. This is also the way to get the best out of the lawyers in other countries with whom you will be working.

6. Strength: Be unyielding in defending core corporate values and culture.

Yes. And in the legal context this means doing things by the law, even if you see others around you not doing so.

7. Patience: Be patient; use a step-by-step approach in China, not a Big Bang approach.

I will borrow again from my emerging markets article:

Exercise Extreme Patience. This principle stems from the maxim that everything takes twice as long as you think it will. If it takes twice as long in the West, triple that in emerging market countries. You'll go in both as a businessperson and a teacher—and in both roles, the learning curve of your partner will almost certainly take way more time to deal with than you think.

For example, many emerging market countries have a history where "bad business" meant "thinking long-term." A year or two after the fall of Soviet communism, I was involved in a matter where an investor put $250,000 into a Russian joint venture. The business very quickly was making good money and all indicators pointed towards steadily increasing profitability. But, quite quickly, the Russian company stole the $250,000. Was it so irrational for him to think so short term in a country where the government and tax systems had such a history of unpredictability?
8. Speed: Be flexible and quick. Stay well informed; the business environment in China is in a constant and rapid flux, probably much more so than in other markets.

This is true of international law as well, and if one is going to practice in this area, one has to enjoy and thrive on constant change and even constant uncertainty. I was talking the other day with my friend, Dan Hull, lawyer extraordinaire at Hull McGuire, and he was telling me how he has abandoned all pretext of what he calls "PCness" and he now just tells potential hires there that they had better be prepared to work tirelessly just to keep up. I can certainly vouch for Dan being right when it comes to practicing international law.

9. Guanxi-building: Build your guanxi not only internally (with subordinates, peers and superiors) but also externally with clients, suppliers and government officials). A strong guanxi network is a fundamental element of your success in China.

As a lawyer, both you and your practice will benefit by your doing more than just staying in your office poring over law books. Get to know your clients, your fellow lawyers, good people in the industries in which you are working, and treat them with respect. I see this as basic good business for anyone.

So you want to be an international (or China) lawyer? Conform to this list.

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As I sit before my computer monitor writing this short article, the window for my document is minimized so as to maximize my view of my desktop background—a view of our beloved, blue planet from two hundred miles above its surface. The stunning vista of creamy, white-blue clouds and indigo sea against a black, starless sky reminds me of the amazing richness of opportunities constantly before us卆nd of our regrettable inability to take advantage of all of them. Fortunately, leading full and joyful lives does not require that we take advantage of all opportunities but, rather, that we carefully choose the precious few possibilities that we can and will pursue. What a difference it will make in your law career if you seize those few opportunities and take full advantage of the doors they open!

No Such Thing as "Making Partner"

Candidates ask me all the time, "Which firms are making partners now?" I always respond, "None of them!" The dead silence is usually followed by nervous laughter. "No, really," candidates say. "I know it seems like that, but where are associates really making partners?"

At this juncture, I usually let them in on a little secret: things have changed in the practice of law since the 1950s. Here's the bottom line: there are no more firms where associates simply "make partner." Instead, associates grow up, get clients, create practices, and only then are awarded partnership status.

What this means is that attorneys must know how to create thriving practices while maintaining heavy workloads, and most firms cannot or will not expend resources to teach lawyers how to do this. They are on their own. Well, almost.

Here are some pointers that will help you develop the personal and professional clout you will need to build your own book of business.

Start Building Partner Skills Now

Associates who are ultimately invited to join their firms' partnerships are not created equally, yet there are several "types" of attorneys who possess skills that increase their likelihood of making partner. I once sat in on a lecture given by the chairman of a prominent law firm, in which he discussed three types of partnership-bound associates.

First, there is the "rainmaker" who spends all (or most) of his or her time networking, having lunches, meeting people, and bringing in business. Second, the "service partner" adds value to a firm by providing niche expertise in a specialized area of the law, thus meeting the needs of sophisticated clients in ways that a partner with general legal skills cannot. Finally, the "hybrid" brings good leadership skills, strong connections to the firm and within the local community, and the ability to supervise projects and associates with aplomb.

While I respect these distinctions, I see things a little more simply. The only kind of person who can make and remain a partner is a person who has developed and continues to nurture a large, quality network of friends, colleagues, experts, and clients with whom he or she is involved on a professional level. This means that a potential partner must be able to call upon the people within his or her network to meet the needs of existing clients, to refer and generate new clients, and to keep abreast of developments in his or her industry.

No matter what level of practice you may now enjoy, the levels of ability and interest you exhibit in maintaining such a network may well mean the difference between professional and remunerative success or failure.

The Core Competency of a Partner

The ability to develop successful professional relationships is one of the core competencies of a partner. Almost anyone can practice law, but only a few develop law practices. I always try to emphasize to younger lawyers that it is never too early to start the process of building a network of strong relationships. The fundamental difference between a partner and any other lawyer is leadership ability. Partners lead. That means that partners assume responsibilities, delegate tasks, and are accountable for meeting the needs of their clients. These leadership traits are not innate; they must be learned, and to be learned, they must be practiced.

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The only way to become a leader is to practice leadership in a thousand small ways. Sets of small acts tend to grow, of their own accord, into larger sets of responsibilities that eventually can develop into leadership over an entire case, with a large client, or in a 3,000-member law firm.

Furthermore, leadership does not begin with a "lucky break," such as when, for instance, the senior associate on a matter calls in sick and you are named the lead attorney卭r when the lead partner suddenly realizes that you are brilliant卭r even if a client suddenly prefers that you take the reins. Rather, leadership begins with relationship management. In essence, every legal task can be broken down into a series of relationships that need managing. For example, an attorney must exhibit leadership in order to assign the appropriate people within a law firm to answer interrogatories, to find critical documents, to communicate key information about deals to clients, or to manage support staff and other associates in preparing filings or coordinating nationwide document collections and reviews.

Thus, to build the confidence, credibility, and leadership skills necessary to fulfill these responsibilities, attorneys must begin by cultivating as many meaningful relationships as possible. To do this, they must actually meet people.

Get Out There, Meet People, and Make Friends

Networking is just a fancy way of describing the process of intentionally making friends. Every lawyer in the country should be a member of at least three organizations and should contribute to each of them. It is often the case that the most effective, highest-functioning attorneys are those who are members of scores of organizations that they have joined over the courses of their careers.

For starters, however, any professional—and every lawyer—should join one organization within each of the following genres: professional, service-oriented, and fraternal or social. At the most basic level, every lawyer should be closely involved with some sort of professional organization of lawyers dedicated to furthering the practice of law. This might be a subcommittee within a state bar association, the American Bar Association, the Association of Trial Lawyers of America, or even your local Barristers Club. There is no substitute for meeting and interacting with new lawyers in settings devoted to their respective practices. Successful lawyers have hundreds of colleagues who are essentially professional acquaintances with whom they have developed familiarity. Although meeting people and getting to know colleagues is incredibly easy to do, many lawyers dread it. It doesn't have to be painful. Go out and meet someone new today!

For the Socially Challenged: A Step-by-Step Guide to Creating Your Network

Here is a step-by-step primer for developing a network of professional colleagues that even a partner would envy:

Join the "[fill in the blank]" club.

Actually go to a meeting.

Say, "Hello, how are you?" to five people. Be brave. Try to initiate some small talk. (For example, ask questions such as "Where do you practice?" or "What is your most interesting case right now?")

Give a business card to each person you talk to. Ask for a business card from each of them, or write their names and phone numbers down on one of your own cards and hang on to it!

Once you get home or back to the office, enter their names in your Outlook folder (or some other location), and set up a reminder to call each person back in one week to follow up and say how much you enjoyed meeting him or her.

Actually call each person back.

Make it a practice to call each person on your list of contacts once every three months.

Follow where this leads you.

There. That wasn't so hard! These are simple but invaluable steps. Every lawyer has some basic social skills, or he or she would not have survived the first year of legal practice. Begin naturally—but begin—and see where these proto-relationships take you. The point is that, just like in sales, there are only so many solid opportunities per "X" number of contacts. The only way to "get lucky" is to make sure that you make lots of attempts to build and maintain your personal network. Not every person is going to become a client, but the greater the number of personal contacts you maintain, the greater the resulting synergy between their accumulated sums of interactions, relationships, and experiences and your own.

Bringing It All Together

Once you have started down the path of generating a network of diverse professionals, you will be surprised at how it starts to take on a life of its own. Telling one colleague about an amusing vignette may lead him or her to do a small favor for you, such as sending over a client as a referral. Over time, that client or that colleague may lead you to significant business opportunities. All the while, you should be continuing to grow these and other relationships.

The key point to remember is that becoming a responsible leader depends on your ability to manage relationships. In every interaction, follow through with whatever you promise to do. If you offer to provide a reference, provide it! If you agree to get the name of someone who can serve as an expert, do it—and promptly! Demonstrating this kind of courtesy builds reputations and relationships—one small, solid step at a time. I absolutely guarantee that if you follow these practices, you will eventually succeed. You don't have to be perfect all the time. You just need to be reasonably careful, reasonably reliable, and reasonably friendly, and you will be ahead of the majority of the pack.

Conclusion

The world is full of opportunities, but we cannot take advantage of them all; we can only capitalize on a few. To the extent that you can internalize this powerful principle, you will find that the world—and, in particular, your own practice—is as full of opportunities as a path strewn with gems. The key is to determine which gems to pick up, carry, and ultimately safeguard卋ecause you cannot take them all. If you follow this path, you may find that your biggest challenges lie not in finding opportunities, but in having sufficiently large pockets!

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by Peter L. Smith, Esq.

By Nick Zieminski

China may have plenty of man power, but it could also use some help from Manpower.

U.S. staffing company, Manpower Inc. , is one of a number of business recruiters putting emphasis on the world's most populous country, where a rapidly developing economy is driving the demand for engineers, finance professionals and technology specialists.

China's growth rates of about 10 percent per year, which already makes it the world's No. 4 economy, pushes companies to develop leaders at a faster pace than most other countries.

A McKinsey & Co. study estimates that, within five years, China will need 75,000 executives who have either Western technical skills or language ability -- ideally, both. Only about 5,000 are in the work force now.

"The challenge is not in finding 500 or 1,000 people to man the factory. The challenge is in finding leadership skills and functional management skills," said Iain Herbertson, president of Asia-Pacific for Manpower, which has 350 consultants in 11 Chinese cities. About half its contracts are for information technology workers.

For now, the numbers are relatively modest. Of Manpower's $4.4 billion in second-quarter revenue, the "other" segment -- which includes China, Japan and Australia, as well as Mexico -- reported sales of $577 million. Its operating profit of $15 million was about 9 percent of Manpower's quarterly total.

But the segment is among the company's fastest growing. Within three to five years, Manpower will have a staff of 1,000 to 1,600 in mainland China.

New rules this month allowed foreign companies to own a controlling stake in their local joint ventures if they set up shop in Pudong, the fast-growing financial center in Shanghai.

The move is part of a broader relaxation of rules, which should help draw more companies to China, and will enable Manpower to expand its range of services, Herbertson said.

"Our business is more than doubling every year," Herbertson said in a telephone interview from Shanghai.

Monster Worldwide , which this year raised its stake in ChinaHR.com to 45 percent, may take majority control of the venture by 2008, though the unit is currently losing about $2 million per quarter.

"We don't expect it to be (profitable) because we are at the beginning of the beginning," said Marcel Legrand, Monster's senior vice president of strategy and corporate development. "Profit is not of great interest to us in that particular market -- it's about an investment."

ChinaHR has about 600 staff and 4 million resumes on file, but those numbers will grow as more Chinese go online, Legrand said.

Monster, parent of the world's largest recruitment Web site, followed customers like Procter & Gamble , L'Oreal , and Hewlett-Packard to China, which fits with a goal for international operations to account for more than half of its revenue by next year.

That global expertise, including serving multinationals in other markets, is what differentiates companies like Manpower and Monster from their smaller competitors.

"We can bring to China the best of what happens in Brazil, or what happens in Korea, and they can help us export their best practices," Legrand said.

This week, Monster hired a former Nike Inc. executive, Tony Balfour, to head its Asia-Pacific operations.

He will have competition.

Rival job site Careerbuilder.com on Wednesday said it was entering the Chinese market in an exclusive deal with human resources company 51job Inc. , to link to each others' sites and sell job postings and access to their resume databases.

At executive recruiter Heidrick & Struggles International Inc. , Asia-Pacific operations had faster revenue growth and highest profit margins than either the United States or Europe. The region accounts for 10 percent of total company sales, and China about a fifth of that.

Since rules are different depending on the services offered, Heidrick owns 90 percent of its Chinese joint venture, said Kevin Kelly, who heads Heidrick's European and Asian operations, adding that consumer goods, technology and industrial companies are its main clients.

Financial companies, including investment banks, will need experienced staff starting in 2008, when new rules take effect under China's commitment to the World Trade Organization.

Heidrick's China operations are expected to double within three years, and the company is recruiting Chinese-speakers in the United States and Europe for positions there, Kelly said.

"European and U.S. markets are more mature, so everyone sees China's huge potential for developing or expanding their businesses," Kelly said.

Wednesday, May 23, 2007

Type: Science and Technology Committee Meeting
Venue: Regus Shui On Plaza Centre
12/F Shui On Plaza, 333 Huai Hai Zhong Road
雷格斯环业会议中心
淮海中路333号，瑞安广场12楼
Time: 16:30 to 18:30
Price: Members (RMB): 0

The AmCham Shanghai Science and Technology Committee is pleased to host its third roundtable discussion of the year on May 23, 2007.

Eric Fiedler, Regional Director of Hewitt Associates and current AmCham Chairman, will discuss compensation and benefits data and trends in the Shanghai R&D sector. Fiedler’s presentation will cover how your company can attract and retain talent in this increasingly competitive market, especially regarding leadership and managerial positions.

The S&T Committee meets on the fourth Wednesday of each month. The forum will include an invited guest speaker to address a key topic of interest followed by an in-depth roundtable discussion.

Please email your RSVP to Christine Li at Christine.li@amcham-shanghai.org no later than Monday, May 21, 2007.

Best regards,

Science & Technology Committee

AmCham Shanghai

GUANXI (THE ART OF RELATIONSHIPS)
Microsoft, China, and Bill Gates's
Plan to Win the Road Ahead

The Good Argues that Microsoft's Beijing research lab has played a pioneering role in high tech.
The Bad Misses key developments and rarely goes beyond the lab to explore issues facing Microsoft.
The Bottom Line Flawed, but it shows the importance China has for American high tech companies.

Last summer a Taiwanese-born PhD named Kai-Fu Lee was at the center of an intense battle between Microsoft (MSFT ) and its latest challenger for high-tech dominance, Google. (GOOG ) Lee, an expert in speech-recognition technology, had been working at Microsoft for seven years, recently in Redmond, Wash., and before that at the company's China research lab in Beijing, which he founded in 1998. But he had become increasingly frustrated by what he described as Microsoft's "incompetence in China" and last July abruptly announced that he was leaving to join Google. A nasty lawsuit followed over the terms of a noncompete agreement. During the trial, another Microsoft defector revealed that Microsoft Chief Executive Officer Steve Ballmer had vowed to "f---ing kill Google." Lee ultimately won permission to leave, becoming a prime example of the recent talent exodus at Microsoft.

You might expect that a new book in which Lee is prominently featured and extensively quoted would have juicy insights into that drama. Alas, the flawed Guanxi (The Art of Relationships): Microsoft, China, and Bill Gates's Plan to Win the Road Ahead, by journalists Robert Buderi and Gregory T. Huang, has little to say about this key moment in the Microsoft-Google rivalry. Indeed, it appears Microsoft executives weren't the only ones surprised by Lee's departure: Although Buderi and Huang seem to have spent many hours over many months talking with Lee, they apparently had no inkling of his dissatisfaction. They devote one late chapter to the custody battle. But it feels tacked on, almost as if they realized at the 11th hour that Lee had upended the whole premise of their book, which tells how Microsoft successfully built its Beijing research center.

Microsoft Research Asia was only the second center for high-level research opened by the company outside the U.S. (The first was in Cambridge, England.) The authors argue persuasively that Microsoft's Beijing center has played a central role in developing products and served as a model for the company as it expands in countries such as India, where Microsoft opened a Beijing-like research center last year. In setting up the center in the late 1990s, long before most other multinationals had started to take China seriously as a research and development location, Microsoft was a pioneer in recognizing "the imperative of looking at emerging nations not just as potential markets but as sources of talent." Contrary to the book's subtitle, though, this is not a story about Bill Gates's strategy in the world's largest country, and the authors spend almost no time discussing Microsoft issues beyond the lab. For example, there's very little about problems with China's counterfeiters. And while mentioning a botched Microsoft pledge to invest $100 million in the country, they don't offer any insights into what went wrong.

Guanxi is at its best when it describes the brilliant collection of experts recruited by Lee, such as multimedia whiz Ya-Qin Zhang. (Buderi and Huang use the Western convention of given name first, family name last for most of the Chinese in the book.) A former child prodigy who entered one of China's top universities before his 13th birthday, Zhang took over as director in Beijing in 2000 after Lee relocated to Redmond. Zhang is adept at wooing Chinese officials. For instance, he scored a coup when he won permission from the government for the Beijing lab to award post-doctoral degrees, a first for a foreign company. And Zhang boasts about his ability to cut through red tape by making one phone call to the vice-mayor. "Problem solved," Zhang tells the authors.

Buderi and Huang also profile Jian Wang, an engineering psychologist who at first was reluctant to give up his position as a professor at Zhejiang University but went on to lead the team that developed the handwriting-recognition software used in Microsoft's Tablet PCs. Wang, who has come up with a "universal pen" that can instantly take writing from a piece of paper and put it on a computer screen, also created Thought Explorer, a computer interface custom-made for Gates that the chairman uses during Think Week, his semi-annual retreat.

Yet as fascinating as these characters are, the book suffers from its almost exclusive reliance on them for its information -- and its numerous boosterish quotes. Significantly, we don't hear from many Chinese officials, even though one of Buderi and Huang's themes is the importance of building relationships, or guanxi, with government leaders.

For all its shortcomings, though, Guanxi does show the importance that China has for American high-tech companies. With Kai-Fu Lee now back in Beijing to launch another R&D center, this time for his new company, the competition for Chinese talent is only going to get rougher.

by Ren Ke

BEIJING, March 10 (Xinhua) -- Liu Dan, a final year student at the Capital Normal University in Beijing, has been job hunting since October last year. As a female student without any relatives in Beijing, she is finding it difficult to get employed.

"It's really too difficult for me to find a job," said Liu, "some employers turned down my resume just because I'm from Henan Province, some rejected me because I'm a girl, or they did not need undergraduates. Finally, I found an administrative job but one of the job requirements was that I must have relatives in Beijing as my guarantors -- so I failed again."

Liu's experience is widespread in China, most people encounter discrimination when they are trying to find jobs. Gender, educational background, age and health conditions -- such as carriers of Hepatitis B or HIV -- all fall foul of discrimination on the part of prospective employers.

A questionnaire regarding job discrimination, which was made at the end of last year, revealed that 86 percent of interviewees thought discrimination exists in employment market, while 58 percent thought that this discrimination is of a severe nature.

However, this may all be set to change with the introduction of a new employment law by the Chinese government. The Standing Committee of the National People's Congress (NPC) -- China's top legislative body -- has recently examined a draft law on employment promotion for the first time.

The drafting of the law started in the second half of 2003 and, after repeated revision; the law is now on the agenda of China's legislators. As chairman of NPC standing committee, Wu Bangguo said, since the law has close relations with people's interests, the full text of the draft law will be published after the 5th plenary session of the 10th NPC in order to ascertain public opinion.

"Unemployment leads to social unrest and conflicts between different groups," said Liu Cuixiao, a researcher with China Academy of Social Sciences (CASS) who believes that the main catalyst for the new law is China's present social situation.

As the most populous country in the world, China is now facing a rapid rise in its labor force -- nearly 10 million people every year. Unemployment is becoming a challenge that the government is increasingly facing. Although the official urban registered unemployment rate is 4.6 per cent, some economic observers believe the national figure may be much higher.

In order to address this issue, the draft law is aiming at promoting employment around the country. The law states that the government will implement new policies, such as boosting professional training, regulating the intermediary employment agencies and increasing financial investment in employment promotion.

Severe employment stress makes discrimination more popular in China, however building a fair employment market is a key issue addressed in the draft law, which contains a special clause on anti-discrimination. The clause states that discrimination against job seekers with respect to their background, whether it is with regards to ethnicity, gender, religious beliefs, age, or physical disability, will be prohibited.

Indeed, as well as college students like Liu Dan, some disadvantaged groups -- such as some 200 million migrant workers and laid-off workers from state-owned enterprises -- also suffer from discrimination in the labor market. Most Chinese employers will not consider job applications from candidates above 35, excluding the majority of China's laid-off workers.

China's residential permit system (or 'hukou') ties farmers to farmland, restraining the surplus labor force in rural areas from migrating into the cities and thus suffering discrimination from urban dwellers.

Due to the discrimination, they have little say over their treatments. They cannot enjoy some basic rights, such as work-related insurance and health care. Although the government always vows to protect the interests of them, sometimes they even cannot get paid on schedule.

According to Xie Zhiyong, a professor at the China University of Political Sciences and Law, discrimination also exists in China's civil servant recruitment exams.

"Some posts only accept male candidates," he said, "and 35 is the age limit for the promotion of many posts -- these requirements have no necessary connections with the nature of the work."

Such widespread discrimination sometimes triggers tensions in society, often resulting in tragedy. One such case that raised public awareness of job discrimination was the murder committed by Zhou Yichao, a university graduate that was also a carrier of Hepatitis B.

In 2003, Zhou killed a civil servant and seriously wounded another, primarily due to his anger over the recruitment procedure of a local government department in Jiaxing City of East China's Zhejiang Province -- he had successfully passed the interview and the exam for the post, but had failed the health check-up. Zhou was subsequently sentenced to death.

"These inharmonious things obviously do not tally with the picture that the Chinese government is now trying to draw -- a socialist harmonious society, in which equality, justice and the interests of social vulnerable groups are being addressed," said Liu Cuixiao.

Issues concerning people's livelihoods are amongst the most important subjects being discussed in the recently convened annual session of the NPC and the Chinese People's Political Consultative Conference (CPPCC).

Prof. Zheng Gongcheng of Renmin University, who is also a member of NPC Standing Committee said, "Discriminations may damage the labor market, and thus lead to serious social consequences, it undermines the fair competition environment of the labor market, and results in a tremendous waste of labor capital."

"What the draft law said on anti-discrimination is mainly in principle," remarked Liu Cuixiao, "however, as an administrative law made by the central government, all of the local provisions that are against such principles will be abolished."

More importantly, the draft states that the government is to co-ordinate rural and urban employment policies in a bid to build a system in which workers from rural and urban areas can have equal rights in employment.

Due to lack of education and professional training, these workers from rural areas cannot find jobs requiring skills and technology, which made them disadvantageous when competing with urban people.

As Liu Cuixiao said, it is unfair for them -- she believes that with all the efforts that the government will make, discrimination must be curbed significantly.

However, some experts think that there is still some room for improvement in the draft law.

Lin Qiang, a member of NPC standing committee commented, "Now the draft law has only prohibitory provisions on job discrimination, however, there is no corresponding legal obligation." Lin suggested that the legal obligation of discrimination should be clarified in the future.

Another member of NPC standing committee, Yuan Hanmin, suggested that the present draft law is too 'soft' to curb the discrimination in employment. He also suggested that some foreign experience should be taken for reference.

"In order to avoid gender and racial discrimination, American employers have to keep certain ethnic and gender proportions in their companies." As the draft law mainly focuses on discrimination based on age, gender and hukou, Yuan also suggests that more attention needs to be paid to the 120 million carriers of Hepatitis B.

Chinese netizens have welcomed the government's efforts to promote employment and oppose discrimination on web forums, however voices that doubt the law's effectiveness in anti-discrimination remain.

"Where employment exists, employment thresholds exist," said Luo Baiwei, a lawyer from South China's Guangzhou City, "therefore, a job seeker may have formal equal rights in employment, but he may suffer from de facto discrimination. Any differences in gender, age, appearance and background will become the pretexts for employers to decide to hire or not."

As Luo said, it is difficult for the government to decide what kinds of behavior are discriminatory, since there are no specific standards. Furthermore, anti-discrimination is not always good news for everyone, especially for those who have gender, age and hukou advantages. At the same time, the employers will face more restrictions when hiring people.

"Laws cannot create employment, but a fair environment, which will undermine the efficiency and lead to different impacts to different groups," said Luo.

Liu Cuixiao with the CASS believes that the fight against discrimination will be a long-term process and there is still a long way ahead. "It depends on the level of economic development, the changes of the employers' ideas and improvements in the quality of the labor force," said Liu.

"A single law is not enough -- we need a series of systems to promote justice in employment, possibly including reform of the hukou system," Liu added

ChinaForum

With the right credentials, the opportunities for chief financial officer candidates are wide open in China. But those credentials are very different than expectations in the United States or Western Europe. Success is linked to the ability to set up processes and systems, as well as the ability to thrive in the local environment.

Demand, supply

When foreign companies move their manufacturing operations to China from nearby Asian countries, moving regional headquarters follows. Then the banks come along. This migration has created a huge demand for qualified financial professionals and a special demand for a unique type of CFO.

Thomas Zhou, an executive recruiter with DaCare Executive Search in Shanghai, told ChinaForum, “On the corporate side, the hiring activities are quite busy because all companies need a CFO or controller. Financial management helps them grow the business. We do quite a lot at the controller and CFO positions.”

Other recruiters see the same. In a recent article “Hiring Days are Here Again,” consulting firm Wang & Li says, "The greatest need area that we are getting is for candidates with strong financial management backgrounds who are able to take on CFO and Controller positions.... In addition to being familiar with both international and China GAAP, such a person must also have very strong experience in setting up financial systems and processes."

To underscore the importance of systems knowledge and process, a study last year by PriceWaterhouse Coopers and CFO Magazine said that one reason CFOs in China find financial reporting a struggle is incompatible IT systems and poorly trained staff. Ting Liu of PWC’s advisory group in Beijing was quoted as saying, “The key reason that the finance function in China is not up to world class standards is mainly due to a shortage of qualified professionals as well as the advanced techniques coupled with state of the art IT systems.”

At smaller companies, Wang & Li, which specializes in placing international caliber bilingual professionals, points to a disconnect between the international environment expected by many CFO candidates and the localized environment of the businesses that need them. "Typically, the direction and intent of both the board and executive management team is there, but the day-to-day operating realities are quite a different story. Therefore, it requires a person who really understands how to get results and bring about fundamental change in a highly local Chinese company environment."

Some companies take the route of not hiring a CFO at all. Lehman Brown, for example, provides outsourced CFO services for companies that have good finance teams in place but which lack the resources to hire a full time CFO, or which have only sporadic oversight requirements.

Credentials

Most CFO candidates Zhou sees have their CPA credential, which they typically earn in China. Although an MBA is not always necessary, many have earned graduate degrees and certifications overseas in the U.S. or U.K. Some candidates are trained by their companies or they are promoted to the Asia-Pacific level (Hong Kong, Singapore, Kuala Lumpur) and are trained there, he says. Other recruiters say companies like to see candidates with both an MBA and CPA, although finding such a candidate is rare in China’s tight job market.

Special skills

At a multinational company operating in China, bi-lingual fluency is not only an advantage but a necessity. “The person has to be able to speak English and Mandarin very well,” Zhou says, and be able to read and write both languages. “English is a must because he will have to report to headquarters in Europe or the U.S.”

Fluency in changing accounting regulations and market knowledge is also important. Not only must candidates be very familiar with the U.S. GAAP and China GAAP, but they should understand the China market and the U.S. market.

Soft skills are also important, Zhou told ChinaForum. “They should be able to manage a team. And personality is always very important. You have to be able to communicate very well.”

David Yeoung, a partner in the CFO and professional services practice of Hendricks & Struggles in Beijing, says that IPO experience is also helpful, given the number of overseas IPOs, although it’s not absolutely necessary as most investors know that IPOs are driven by teams. It is more important for the CFO candidate to have run the full financial function.

Ambition, a recruiting firm with offices throughout Southeast Asia, reports a trend toward “exact fit” hiring of CFOs, leading to a more rigorous selection process, which can take six months. With CFOs in China now highly visible after recent accounting scandals, and with responsibility far beyond accounting, the risks of hiring the wrong candidate must be avoided. One of those risks is simply not fitting into the corporate culture, which is why “internal candidates” are often perceived to be the right choice for regional CFO positions.

Meanwhile, Ambition is also observing in China new “governance roles,” which support the CFO in compliance and financial reporting matters. New roles are leading to job creation and increased opportunities for senior level financial professionals beyond the CFO title, often at high rates of compensation. Ambition describes this as a new governance support profession.

Hiring

Zhou’s search group is typically used by foreign companies doing business in China, generally the Fortune 2000, and including such companies as Intel, Microsoft and EBay. When a company seeks a high level executive or CFO, his firm is able to attract candidates by presenting the company well and offering an attractive package, which can mean more than straight compensation. In China, he notes, the job title is important. “More and more candidates like to see their career progress while they are working in the company.” Rather than the title China CFO, many would like to see the title CFO- Asia-Pacific, according to Zhou.

And whereas China has a reputation for being a low-cost labor pool, hiring at the CFO level is an area where scrimping doesn’t work. One mistake that corporate executives typically make is thinking that they will be able to hire financial talent cheaper in China.

In a June interview with the Dallas Morning News, Martin Tang, Spencer Stewart’s chairman for Asia, said that some companies think they can hire a CFO in China for as little as $40,000, but learn it may cost five times that, or more. Not only that, but wise companies over-hire to sandbag against employee dropout.

Tang described five talent pools from which executives are chosen: (1) Western expatriates, (2) Asian expatriates, (3) Chinese natives who return after earning graduate degrees abroad, and (4) Chinese locals who have remained in China. Of these, the most valuable are the Chinese who return from abroad, according to Tang. That’s because they have education, knowledge of both cultures and the advantage of being Chinese themselves.

When multinationals can’t find these returnees, Hendrick & Struggles’ Yeung says they should consider foreign CFOs who have worked in China “for a meaningful period of time” rather than hiring expatriates. Ambition reports that it is “extremely rare for a full expatriate package to be offered to a CFO hired locally.”

In Zhou’s experience, half the candidates are coming from the Mainland, half are expatriates. Local candidates “can have a good degree, be well trained in the Big 4, also have some industry experience and work long enough in the local markets for a multinational company. Even if they don’t have overseas background, they can get small or medium size CFO positions.”

In terms of pay, the CFO title in China doesn’t guarantee a large salary, except in certain industries that require specialist knowledge. Increasingly, CFOs are expected to demonstrate a record of success. Ambition reports that corporate governance concerns have led to a general scrutiny of CFO pay packages, with compensation trending toward performance based incentives.

Retention

Churn at the CFO level remains relatively low. According to Zhou, “Turnover rate at the CFO level is not that high. I won’t say that’s a problem in China. I would say that’s a stable position.” The Ambition recruiters concur, especially for non-Chinese speaking CFOs who may be reluctant to move on because they see the “dwindling demand for non-Chinese speakers.

Here at Headcount HQ, we're always interested in tales from the high-rolling, globetrotting executive recruitment market – especially when they involve mysterious companies like Huawei Technologies Co. Ltd.

A high-level network architect recently recounted a strange tale in which he was recruited by two corporate recruiters and a half-dozen Huawei managers, only to end up with an offer that was roughly half of what he earned in the States. To take the job, Huawei also wanted him to relocate his family to China and live in Huawei's corporate housing – without a relocation package or an education budget for his kids.

Something got lost in translation.

"What a waste of time," said our source, who described the Huawei recruitment process as some sort of "Keystone Cops" experience.

The failed seduction started when our source got a call from a Huawei recruiter in Beijing. Our source says that after he expressed interest, he was quickly bounced from recruiter to manager to manager, back to recruiter, and then eventually to a manager at Huawei's FutureWei subsidiary in Texas.

Not only was nailing down the exact requirements for the job difficult, says our networking expert, but none of the Huawei executives could agree on where he should be based. The office proposals ranged from Beijing to Shenzhen. Sydney, Australia was mentioned, too, and that's a long drive from Futurewei's office in Plano.

Finally, our source asked for a formal letter with a formal offer. What he got was a letter asking him to take a laughable pay cut and pack his bags for a company dorm in Shenzhen.

Headcount hopes this yarn serves as a warning for execs everywhere: A bit of fragrance clings to the hand that gives flowers. Actually, that wasn't the lesson at all. That just came up in my Chinese proverbs desk calendar. Oh, well...

By Ronald Alsop

When Zhe Xu receives his M.B.A. degree from the University of California at Berkeley this spring, he will hop a plane back to his native China for a job in management consulting rather than seek employment in America.

Just a few years ago, such a career move would have been almost unthinkable. Most students reluctantly returned to China only because they couldn't land a position with a U.S. company that would sponsor them for a work visa.

But Mr. Xu represents a new breed of Chinese M.B.A. student, for whom China's booming economy is proving more alluring than a career in the West. "It is much more exciting right now to be in China, especially in the health-care area," says Mr. Xu, who plans to do life science and health-care consulting in the Shanghai office of Cambridge, Mass.-based Monitor Group. "Many things are changing rapidly, and I can really put my hands on some of the hot buttons and make my own mark on the country's economic development."

While many Chinese students at U.S. business schools still covet a visa that will allow them to work in America, career-service directors say a growing number are much more willing -- even eager -- to return to their homeland after graduation. "International companies have long tried to pitch this idea of going back to China where a student's language and cultural background is of great value to them, but until recently, it fell on deaf ears," says Paul Allaire, career-resource center director at the University at Buffalo School of Management.

Abby Scott, executive director of M.B.A. career services at the Haas School of Business at Berkeley, even sees some Chinese-American students, who were raised and educated in the U.S., moving to China. "They want to be part of all the interesting things happening over there," she says. "The safe way is to get your feet wet by joining a multinational, but a few gutsy students are trying to start something of their own."

At Stanford University, Virginia Roberson, the business school's international career adviser, finds entrepreneurial-minded students especially drawn to China. "It's like the Wild West and the gold rush to them," she says.

Students say they expect ever greater career opportunities and compensation as China's economic expansion rolls on. "I plan to go back to China after my studies because of the high demand for real-estate and infrastructure development," says Patricia Cheung, a first-year M.B.A. student at Berkeley who will be interning this summer at Deutsche Bank's real-estate asset management office in Hong Kong and working extensively in China. "I am passionate and patriotic about China and also feel that it is where I have a comparative advantage both in language and culture. I speak fluent Mandarin, Cantonese and English and have lived or worked in many Asian countries."

Indeed, U.S. and European companies consider many Chinese M.B.A. graduates ideal managers because of their knowledge of languages and business customs. They also have studied the ways of Western companies in business school so they can relate well to their employer's management style.

"Chinese students are more valuable back in their home country where they can charge a premium for their expertise," says Mark Wilkins, president of Stampede, who last year hired a Chinese graduate from the University at Buffalo to represent the distributor of electronic products in Shenzhen, China. "We needed his knowledge of the country and language because doing business in China is all about relationships."

Johnson & Johnson, which has had business operations in China from more than two decades, also is finding it easier to recruit Chinese nationals and has already hired 13 this school year for its pharmaceutical and medical-device businesses. Irene DeNigris, director of global university recruitment, seeks M.B.A. graduates who have acquired both general-management skills and the ability to work in cross-cultural teams in business school.

"Salaries are much better than five years ago" in China, she says, but she acknowledges that student-loan repayment still poses a financial challenge for some M.B.A. graduates there. J&J and other companies offer bonuses, housing allowances and other incentives to help ease the loan burden.

Some Chinese students still prefer to spend at least a year or two working in the U.S., both to repay some of their education debt from their higher income and to learn about Western business practices firsthand. Zhou Yu, an M.B.A. and computational finance student at Carnegie Mellon University, has accepted a job in fixed-income strategy at Citigroup because he believes some experience in New York should make him "more marketable." But in a few years, he and his wife hope to return to their families in Beijing.

Likewise, Qin Yu, an M.B.A. student at Ohio State University, plans to start with Intel as a senior financial analyst in the U.S. before heading back to China as a manager for the chip maker. "Most major U.S. companies have an operation in China now, so going back to China is not so bad," he says. "But before I go, I need to work in America to better understand the business culture. Academic experience alone is not sufficient."

HONG KONG - Lured by the vast size of China’s domestic market and its lower labor costs, plus a raft of corporate tax breaks, foreign technology companies are setting up shop in Shanghai in droves.

According to a report from Russell Reynolds Associates based on Shanghai government statistics, 144 foreign companies now have their Asia-Pacific headquarters in Shanghai, 48 of which established operations there only in the last year.

Alcatel (nyse: ALA - news - people ) was the first major multinational to make the move in 2001; now there are 11 in Shanghai.

This list includes AlliedSignal, Delphi (nyse: DPH - news - people ), FedEx (nyse: FDX - news - people ), General Electric (nyse: GE - news - people ), General Motors (nyse: GM - news - people ) , Goodyear Tire, IBM (nyse: IBM - news - people ) , Johnson & Johnson (nyse: JNJ - news - people ), Kodak (nyse: EK - news - people ), Rhodia (nyse: RHA - news - people ), Roche and Sharpe.

Russell Reynolds said 15% of the top 50 U.S. tech companies now have their Asia-Pacific headquarters in Shanghai, compared to 40% in Singapore, the city dubbed “Asia for beginners,” and 20% in Hong Kong.

Of the top 50 European technology companies, the executive search firm said 14% have their regional headquarters in Shanghai, 50% are in Singapore and 4% are in Hong Kong.

Beyond the tax breaks, low manufacturing costs and the desire to have executives on the ground in what many believe will soon be one of the most lucrative markets in the world, the report said one of the top reasons companies set up regional HQs in Shanghai is to make a political statement to the Chinese government.

The negatives of operating out of Shanghai include a lack of experienced talent at the executive level and the high cost of expatriate housing and schooling, often higher than comparable cost in Singapore.

Shu-Ching Jean Chen, Forbes

By Benjamin Robertson

Chinese graduates are facing their first employment crunch in 30 years, but employers aren’t rejoicing. Despite the apparent abundance of labor, there is a paradox: Companies often have trouble finding the right candidate for the job.

Another job fair, another riot.

Such is the demand for college graduate jobs in China these days. Pictures from a recruitment fair in the central Chinese city of Zhengzhou showed smashed doors, broken glass and an escalator with sides bent outward at an extraordinary angle. Thirty-thousand eager students surged into the exhibition center in mid-November, overwhelming police, security guards and one hapless escalator as they rushed to be the first to sign up with potential employers.

It was an image that revealed the desperation of Chinese college graduates facing an employment crunch for the first time since market reforms began in the late 1970s. As more people enter universities than ever before, government figures indicate that 20 percent to 50 percent of this year’s 4.13 million graduates will not find jobs. It’s a situation that shows little sign of abating in the years ahead. A December report from the government-affiliated Chinese Academy of Social Sciences says that next year there will be 25 million urban job seekers chasing 10 million jobs.

"It is now very difficult to find work. There is a strong supply and demand imbalance in the college graduate market," says Liu Hao, CEO of Zhaopin, one of China’s leading recruitment portals. Its services include online recruiting, newspaper recruiting, headhunting and campus recruiting. "Whereas the U.S. job market is cyclical, China has not seen a recession in 20 years."

A generation of college graduates has never seen large-scale layoffs, says Liu, echoing the concerns of senior government leaders, who have worried about potential effects on social stability and have held crisis meetings regarding the issue.

Zhaopin’s Web site is registering an average of 70,000 new job seekers every week. Yet despite the apparent abundance of labor, there is a paradox: Liu says companies often have trouble finding the right candidate for the job. Though China is famed for a large, mobile, hardworking workforce, the 37-year-old CEO suggests the country’s education system is not always producing the right sort of talent.

Many multinationals would agree with him. Despite the record number of graduates, sourcing talent is now the leading concern for American companies in China ahead of intellectual property rights protection, according to an annual members’ survey of the American Chamber of Commerce.

"Employers are looking for someone with practical work experience, leadership ability and creative problem-solving skills," explains Jim Leininger, general manager of Watson Wyatt in Beijing. "The education system is very good at developing quantitative ability but falls short in developing some of the key skills employers are looking for: creative thinking, group problem solving and the ability to apply knowledge to real-life situations."

At the Beijing offices of Microsoft, human resources director Danielle Monaghan concurs. Microsoft often advertises through Zhaopin and has no shortage of applicants. The company often receives 16,000 to 17,000 applications for just 300 places. Monaghan says the company still needs to invest time and money into certain forms of training that would be unnecessary back in the U.S.

"We do have to develop their skills to work in a multinational," she says. "Generally graduates are without strong team-working skills. They don’t take a lot of initiative. They don’t push back or say no, and we have to teach these skills because that is key to survival at Microsoft."

While China is by no means the only country facing a talent shortage, its blistering growth over the past decade makes any shortfall all the more acute. In a 2005 report titled "China’s Looming Talent Shortage," consulting firm McKinsey & Co. predicted the country’s economy would have difficulty moving up the value-added ladder from manufacturing to services if the quality of graduates were not addressed.

Like recruitment portals in the West, Zhaopin provides an online interface for posting job advertisements and résumés. It allows Liu to see exactly where the shortfalls are. High-tech industries like auto and drug manufacturing are especially short of quality candidates, he says.

A step above graduate-level job seekers, midlevel managers in the marketing and finance sectors are also in high demand, Liu says. Zhaopin’s goal is help employers fill these gaps in their hiring process. Using part of a recent capital investment from Australian firm Seek, Zhaopin hopes to upgrade its search algorithms to provide better matches and value for employers and would-be employees alike.

"In the past you [would] put out an ad and get a hundred résumés and you would be happy. But now we realize that only a small percentage would be qualified," Liu says.

Another solution to the lack of graduate talent is company training. But while larger multinationals have well-established training programs, smaller foreign companies and their Chinese counterparts are just beginning to invest in the sort of team bonding and leadership exercises that are common practice in the West. In a survey of 558 multinationals in Mainland China, Watson Wyatt found that the average annual cost of training per employee is only $200.

Though puny, the investment reflects a change in corporate thinking, Liu says.

"The standard HR managers in this market were guys who pay salaries and hire and fire people. Now, more and more companies claim they realize human capital is the most important form of capital," he says.

Spotting an opportunity for expansion, Zhaopin has begun company training programs. Clients so far include a municipal government tax bureau and various state power companies.

But a limited length of job tenure can offset such investment. Because talent is in short supply, employee poaching is rife within industries.

"In the U.S., the average length of time someone stays in a job is five to six years. In this market it is two years," Liu says. Figures from Watson Wyatt say annual employee turnover at multinationals is 14.3 percent, and because employers are desperate to find and retain talent, annual salary increases now average 7.8 percent, noticeably higher than the 1 percent to 2 percent rate of inflation.

Despite their exposure to the dynamics of the human resource market, Zhaopin has not been immune from high turnover. At one point, its sales team was posting 25 percent annual turnover, a frighteningly high proportion that Liu says has since been brought under control.

The key is breaking up office hierarchies by allowing new sales members to chase existing but inactive accounts. Previously, client accounts were the domain of the original contract winner, regardless of whether any recent sales had been made.

One emerging trend among multinational companies is to relocate inland, away from the wealthier and more expensive eastern seaboard. Provincial capitals such as Chengdu, Chongqing, and Nanjing are already booming centers of industry and commerce and should in theory offer large pools of untapped talent.

Liu, whose company also is expanding to cover the country’s provincial capitals, is less sanguine. He says the top talent has migrated to the big cities of Beijing, Shanghai and Guangzhou.

Trade unionists in the US and elsewhere have long argued that there is no labor movement in China. They rightly point out that Chinese workers lack even the most basic human rights protections, including the rights to strike and join an independent union.

But there's more to the story: Ten years ago, according to the China's Minister of Public Security, there were on average 10,000 large-scale collective protests each year. By 2004, the government recorded 74,000 large-scale protests. Late last year, the Minister of Police announced protests had increased to 87,000 last year, involving well over four million workers.

Four million workers! In the US we celebrated the birth of a new global social movement when 60,000 people showed up for the 'Battle of Seattle' in 1999. In China there is now more than enough evidence of continual worker self-organization outside of official trade union channels to put to rest notions that 'there is no labor movement in China'.

According to Robin Munro, research director of China Labour Bulletin, '[W]hereas 10 years ago I think you could have said China did not have a labor movement, that is no longer really the case- there is no freedom of association for workers, but hitherto, people have tended to think that, therefore, there is no Chinese labor movement. I think the scale of worker unrest nowadays is so great, you can go to almost any city in the country now and there will be several major collective worker protests going on at the same time.

So China now has a labor movement.This is an important point to just put there on the table and recognize. It is not organized. It is spontaneous, it is relatively inchoate. But then so were labor movements in most Western countries before trade unions were permitted. We have basically a pre-union phase of labor movement development in China today. It also has great potential, I think, for becoming a proper labor movement.'

In the years before the passage of the National Labor Relations Act - known as the Wagner Actor 'Labor's Magna Carta' - there was no legally enforced right to organize, bargain collectively, or strike in the United States. But US workers who were denied these rights responded with their own "pre-union" phase of struggle. Thousands of workers were arrested or beaten and scores shot dead for trying to exercise these rights. For example, in 1934 alone there were three general strikes and a huge national textile strike - all marked by substantial violence.

Largely in response to this upsurge, in 1935 the Federal government passed the Wagner Act hoping to legalize the labor movement and divert it into more moderate channels. According to a recent study by labor law historian James Gray Pope, the massive sit-down strikes and factory occupations of the following year cajoled the Supreme Court into reversing its own precedents and accepting the Wagner Act as constitutional.

American workers did not get their rights by waiting for the government to provide them; rather, they began asserting rights they believe they were entitled to, and thereby forced the Congress and the courts to acquiesce.

One innovative labor strategy that is being encouraged by CLB as a way to relate to the new emerging Chinese labor movement is the CC-2005 Campaign or Collective Contract 2005. (According to CLB staff, the Campaign's name is "a slightly cheeky designation, thinking in terms of SA-8000" and other Corporate Social Responsibility (CSR) standards.)

Under existing Chinese labor law, where there is no union presence in a factory, workers are allowed to elect their own representatives to negotiate and sign a collective contract.

With the ACFTU holding only 30% representation outside the government sector, CLB is trying to take advantage of this legal 'loop-hole' by urging multi-national corporations that operate in China 'to pressure their supplier factories into allowing the workers to negotiate a proper collective contract in the workplace.' The innovation of this approach is the use of existing Corporate Codes of Conducts to negotiate binding collective agreements with enforceable rights. CLB views the CC-2005 campaign an opportunity to create a basic organizing space that is legally protected in the private sector.

As Han Dongfang, Director of CLB, explains, 'What we want to do is get this collective contract regulation connected, with a code of conduct, a corporate social responsibility kind of thing, which they have been trying to work out for more than 10 years but have never worked out. Now we try to put it together as a new program. We make the corporate social responsibility, the Code of Conduct document, which has no teeth, and make them, together with Chinese law, have teeth, in particular with the workers' participation, workers' representation.'

CC-2005 has three major strategic objectives:

To mobilize workers to participate in collective bargaining, so that they can play an active role in protecting their own rights; To achieve real implementation of China's labor laws, trade union legislation and the relevant standards of the International Labour Organization; To provide a new and effective means by which multinational buyers can realize their commitment to the principle of social accountability.

The massive number of wildcat strikes occurring in China shows that Chinese workers are not waiting for official unions to reform themselves. Instead, they are fashioning new ways to improve their lot. So the challenge is for the US and the other labor movements to find ways to reach out and encourage new independent workers organizations in China. We might want to start by supporting CC-2005 campaign.

[Brendan Smith, Jeremy Brecher and Tim Costello are co-founders of GlobalLabor Strategies, a new resource center working to assist labor and other social movements make the connections and develop the strategies needed to function effectively in the global economy. Read their blog at www.globallaborblog.org.]

BEIJING, Oct 9 (Reuters) - Global news and information company Reuters Group (RTR.L: Quote, Profile, Research) opened a development centre in China for key products such as its 3000Xtra desktop terminal and said it expected to triple the operation's staff to 600 in three years.

The centre, located in the capital's technology hub of Zhongguancun, will also input data related to mergers and acquisitions, company financial reports and forecasts, and economic data for markets in China, South Korea and Japan, Reuters said in a statement on Monday.

It gave no figure for the amount invested.

"This investment underscores our commitment to China and our desire to participate in its future as a global leader in technology and financial markets," Chief Executive Tom Glocer said in the statement.

BEIJING - A skills shortage has emerged as the top challenge for US companies operating in China, according to a report from the American Chamber of Commerce in Shanghai.

The 2006 China Business Report was released on Wednesday after the organization polled 274 member companies throughout China.

Charles Mo, who heads human resources at the Chamber of Commerce, said the skills shortage had, for the first time in five years, overtaken bureaucracy as the No 1 headache for US companies in China.

"The vast majority of US companies said their China operations were suffering from challenges in recruiting capable Chinese managers and retaining them," Mo said.

They account for about 80% of those companies polled. The scarcity of entry-level and clerical staff has also had a negative impact on US companies.

"Controlling salary increases was also a problem for 82% of the companies," Mo said.

Mo said the growth in operations in China had outpaced the supply of desirable staff.

"US companies have to fight for talent against international and domestic competitors," Mo said.

Bureaucracy, lack of transparency and inconsistent regulatory interpretation were the second-biggest challenge facing US companies, the report showed. These challenges, along with other factors, are squeezing the profit margins of US companies in China, according to the report.

More than half of those firms polled said their China margins were threatened by price pressure from domestic competitors, price pressure from major customers, or changes in salary and wages in China. These factors have affected the bottom line of many US companies.

While half of those polled saw improved profitability in 2005 over 2004, most saw profit margins increase by less than 10%, and only a quarter reported higher margins for China than for their worldwide operations.

Nevertheless, US companies are clearly bullish about China, and the country is a priority for many. When describing their five-year business outlook in China, 94% of those polled were either "slightly optimistic" or "optimistic". And 79% were more optimistic about their business outlook in 2006 than a year before.

(Asia Pulse/XIC)

ZHUHAI • Airbus said yesterday it would hire 600 staff for its new assembly plant to be built in the north Chinese port city of Tianjin.

Speaking at a media briefing at Airshow China, the country’s only air show and exhibition, Laurence Barron, president of Airbus China, said staff would be trained on the existing production line in Hamburg, Germany.

Airbus announced last week that it would open an Airbus A320 assembly plant that would eventually make four planes a month, with the first expected to be completed in 2009.

Airbus will ship sections of aircraft from Hamburg to Tianjin for final assembly.

The construction of the plant, near Beijing, was announced last week, along with China’s purchase of 150 A320 aircraft in a deal worth about $10bn, with delivery expected from 2009, Barron said.

It brings the total order to 300, following China’s order last year of 150 Airbus planes.

Barron said some of the Chinese order would be made in Tianjin but some planes would also be made for the European market.

He would not reveal further details about the plant or its future development until it received final approval from the Chinese government, which was preparing a formal feasibility report.

However, Barron highlighted the importance of the fast-growing Chinese market.

“(China) is a very important market. With its air traffic doubling here every five years, it’s becoming or has already become a major market in the world. We are taking China extremely seriously,” he told reporters.

Airbus estimated that China would need around 1,790 planes over the next 20 years.

The European company is seeking to undercut US rival Boeing, which has about two-thirds of the lucrative Chinese civil aviation sector and says it is aiming for a 50 per cent market share.

Analysts said the latest developments could be significant in helping Airbus achieve its goal.

BEIJING (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's national pension system was covering 182.42 million people by the end of September, up 4.3 percent year on year, the Ministry of Labor and Social Security said in Beijing Thursday.

In the first nine months of the year, some 7.54 million people were newly covered by the pension system, a spokesperson of the ministry told Xinhua.

A total of 339.4 billion yuan (43 billion U.S. dollars) were paid out to retirees between January and September, the spokesperson said, adding that no overdues have been reported so far.

The pension system received revenues totaling 403.5 billion yuan in the first nine months, an increase of 16.1 percent over the same period of 2005.

Source: Xinhua

The Infosys campus on the outskirts of Bangalore looks like a chunk of the rich world that has been reassembled amidst the dust and debris of India. The echoes of Silicon Valley are everywhere. The journey there involves a wild ride along dirt roads, but the 22-hectare (54-acre) campus itself is all cut grass and neatly planted flowers. It has every possible amenity, from gyms to yoga studios, from banks to bowling alleys. The restaurants serve 14 different cuisines. Many of the buildings are in the low-slung Californian style, but some of the largest are modelled on Western icons, such as the Sydney Opera House, the Louvre pyramid or Rome's Basilica of St Peter.

Infosys Technologies was started in 1981 by seven Indian entrepreneurs with 10,000 rupees (about $1,000 at the time) between them. The software giant now has annual revenues of $2.2 billion and 58,000 employees. But it is just one of a hundred companies in Bangalore's Electronics City. Bangalore is India's software capital, with 140,000 software engineers (more than in Silicon Valley, the locals boast), and Electronics City is a custom-built high-tech haven. The signs are a list of the world's biggest IT companies, from multinationals such as Hewlett-Packard and Motorola to home-grown giants such as Infosys and Wipro.

Electronics City is the meeting point of the West's demand for high-tech services and India's supply of brain power. The dramatic fall in the cost of communications made it possible for Western companies to outsource services, and a newly liberalised India could offer a huge supply of cheap brain workers. Every year India produces around 2.5m university graduates, including 400,000 engineers and 200,000 IT professionals. India's National Association of Software and Service Companies (NASSCOM) calculates that the country has 28% of the world's IT offshore talent.

Indians point to the advantages that they bring to the market. They work while the West sleeps; they speak (splendid) English; they can throw huge numbers of people at a job. But at the heart of the boom is a simple sum. The cost of an Indian graduate is roughly 12% of that of an American one. Indian graduates also work more: an average of 2,350 hours a year compared with 1,900 hours in America and 1,700 in Germany. The bottom line is that you can buy almost ten Indian brains for the price of one American one.

The outsourcing boom shows no sign of slowing. Gartner, a research firm, estimates that global spending on IT outsourcing will rise from $193 billion in 2004 to $260 billion in 2009. But there are caveats. The most important is that Indian-based companies themselves are encountering severe skills shortages. Wage inflation in India's IT sector is about 16% a year, and turnover is 40%. NASSCOM predicts that India's IT sector will face a shortfall of 500,000 professionals by 2010. GE Capital has posted signs in its Indian offices saying “Trespassers will be recruited”.

Skills shortages are at their most acute among managers. Several Indian companies have had to bring in Western CEOs: the Tata Group, for example, has put Raymond Bickson, a Hawaiian, in charge of its hotel business. Good middle managers are rare: annual wage increases for project managers in IT have averaged 23% a year over the past four years.

Aspiring to world class

How can a country with a billion people suffer from talent shortages? Some reasons are familiar. The number of people with relevant skills is tiny: only 11% of the relevant age group go on to higher education, and older people have had their management skills blunted by the old licence raj. Moreover, growth is so fast that it would strain any educational system, let alone one as ramshackle as India's. For example, in the four years to March 2006 Infosys increased its payroll from about 10,700 to over 58,000—a compound annual growth rate of 53%.

The second caveat is that Indian-based companies are determined to move upmarket. They have mastered the basics: almost 400 of the companies ranked highest by the Software Engineering Institute at Carnegie Mellon University are in India. Now they want to become world-class. This means pushing into more sophisticated areas such as “integrated solutions” and consulting. It also means adopting the latest productivity-boosting techniques, such as applying lean-manufacturing techniques to software development, a favourite strategy at Wipro. At the same time Western multinationals are exporting more and more complicated tasks.

The looming skills shortage and the drive upmarket have made companies obsessive about finding and holding on to the right people. They are investing heavily in education and training, partly to attract the best talent and partly to keep their existing workers up to speed. “We're investing in training like the Dickens,” says Nandan Nilekani, Infosys's CEO. The company has increased its training budget from $100m to $125m. It has also moved one of its board members, T.V. Mohandas Pai, from chief financial officer to director of human resources to show that it means business. In the year to March 2006 Infosys screened 1.4m applications, tested 164,000 applicants and interviewed 48,700 to make 21,000 appointments.

Companies are also getting much more imaginative about identifying new sources of talent. Wipro has different training programmes for different talent pools, including one to help people get a university degree while working for the company. Mr Pai describes Infosys as a “human-capital supply-chain company”. But to keep the supply chain going, India must improve its universities.

Versions of Bangalore's Electronics City are in evidence in a number of developing countries, and so are skills shortages. China is seeing double-digit wage inflation and labour turnover in its IT sector. Senior managers are particularly scarce: two in three companies report difficulties in filling senior positions. Shanghai Automotive, China's biggest carmaker, and Lenovo, its biggest computer-maker, have recently hired American bosses. But other skills are also in short supply: Chinese airlines, for instance, are importing pilots.

If Western companies were initially attracted to the developing world by the low price of talent, they have now moved on to other considerations. Srini Koppolu, the head of Microsoft's India Development Centre (MSIDC), explains that one reason why Microsoft established a development centre in Hyderabad was to gain an edge in the talent war. Being in India gives you access to first-rate techies who do not want to move abroad. MSIDC has grown from 20 employees in 1998 to over 900 today.

The other advantage is local knowledge. Vijay Mahajan, a former dean of the Indian School of Business, which sits next to Microsoft's campus, points out that the developing world is a booming market as well as a huge labour pool. GE calculates that 60% of its growth over the coming decade will come from the developing world, compared with 20% over the past decade. And the only way to understand the new market is to be immersed in it.

Many Western companies thought that their goods would almost sell themselves in the developing world. They reckoned without complicated distribution systems, feisty local competitors and idiosyncratic local habits. Packaged-goods companies found that customers did not want their jumbo packets, for example, because they had little money and little storage space. Local people could have told them that.

Hewlett-Packard has set up research facilities in India in the hope of building a stripped-down 5,000-rupee ($109) computer. Electrolux Kelvinator has developed a refrigerator that will stay cold even after a six-hour power failure. Nokia has produced a mobile phone that includes a built-in flashlight and a dust-resistant keypad. In GE's John F. Welch Technology Centre in Bangalore, 2,200 highly qualified engineers work as part of digitally connected global teams on products as diverse as aircraft engines, power and transport systems and plastics. Cisco's and Motorola's Indian research centres are their largest outside America.

Most of these companies have research arms in China as well. Microsoft's development centre in Beijing is a world leader in graphics, handwriting recognition and voice-synthesisation. Motorola has 16 R&D centres in China. Samsung has set up a handset laboratory with a staff of 300 in Beijing, and Siemens has moved a chunk of its mobile R&D to China.

Think global

This R&D boom in the developing world is part of a bigger trend: the globalisation of R&D. This allows companies to plug into national clusters of excellence (South Korea has been a trailblazer in digital displays, for example, and Israel has an edge in wireless telecoms). It gives multinationals access to once secretive university labs in Shanghai and Moscow. And it speeds up innovation, because global teams can work around the clock.

Still, it is one thing to send humdrum work to Electronics City and supervise high-tech drudges, quite another to outsource bits of your core business and manage world-class skills. That involves much more than co-ordinating activities across geographical boundaries. For example, how do you disperse innovation around the world without weakening your corporate culture? How do you motivate high-flyers from different cultures? And how do you manage prima donnas across borders? You need world-class management talent, and that, too, is extremely scarce.

Source: The Economist 5 Oct. 2006

SHANGHAI, China, Oct. 18 /Xinhua-PRNewswire/ -- Heidrick & Struggles
International, Inc. (Nasdaq: HSII), the world's premier executive search
and leadership consulting firm, have announced key landmark findings from a study on Corporate Governance in China. Sponsored by Heidrick & Struggles and conducted with one of China's world ranked universities, Fudan University in Shanghai, the study represents one of the most comprehensive studies on corporate governance in China to date.

In general, the study found that there is room for growth in corporate governance in China. Characterised by the cultural emphasis on local networks (guanxi), particularly with the government, boards in China tend to be tightly knit communities built on business or personal connections. Amongst the companies studied, 72% of board members were sourced through referrals.

"The study also shows that local enterprises tend to resist the
introduction of foreign directors to sit on their boards, even as China is increasingly part of the global economy. 48% of Chinese state-owned
enterprises and private enterprises would not consider employing foreign
directors. Only 26% will consider hiring foreign directors, amongst which, 69% expect to do so within three years," said Steve Mulljiner, Managing Partner, Heidrick & Struggles China. "This mindset has to change, as China has yet to develop a pool of strong local talent with in-depth experience to bring Chinese companies into international markets. Chinese companies do not need to look too far to find Chinese-speaking professionals with years of international exposure and market knowledge. In fact, the research shows that the two of the top three preferred sources of foreign directors in the mainland are from neighbouring areas; that is Hong Kong (27%) and Taiwan
(19%), with America (15%) coming in third."

"The unwillingness to recruit foreign directors indicates that the
internationalization level is low in Chinese enterprises," said Professor
Lu Xiongwen, dean of the School of Management. "Chinese enterprises either don't trust foreign directors or think it unnecessary to hire foreign talent. Some enterprises are afraid communication with foreign directors would be difficult due to cultural and language barriers."

However, foreign invested enterprises have put the employment of
Chinese directors into their agenda as part of their localization strategy. More than 71% of foreign invested enterprises are considering the employment of Chinese directors, among which 87% plan to realize this
within three years. Only 30% of the foreign invested enterprises
interviewed do not intend to employ Chinese directors.

Note to Editors:

The points highlighted here represent partial key findings. Requests
for more data, information or recommendations from the study should be sent to Jennifer Tow, Manifesto Ltd, (852) 2526 1972 or
jennifer@manifesto.com.hk. Arrangements for exclusive interviews can be
made.

About Heidrick & Struggles International, Inc.

Heidrick & Struggles International, Inc. is the world's premier
provider of senior-level executive search and leadership consulting
services, including talent management, board building, executive
on-boarding and M&A effectiveness. For more than 50 years we have focused
on quality service and built strong leadership teams through our
relationships with clients and individuals worldwide. Today, our leadership experts operate from principal business centers in North America, Latin America, Europe and Asia Pacific. For more information about Heidrick & Struggles, please visit http://www.heidrick.com .

About School of Management, Fudan University

Strategically positioned in Shanghai, an emerging capital of national
economy, trading, finance and transportation, Fudan University can lay
claim to nearly one century of continuous existence. There is no clear date of the initiation of its business education, but teaching existed at Fudan in some form of management in 1917 and formally enrolled undergraduate class of Management Science in 1977.

About the Corporate Governance in China study

Sponsored by Heidrick & Struggles, this Corporate Governance in China
study is the result of 15 months of research, interviews, discussion and
consultation. The research is based on in-depth interviews with the
Chairmen or Presidents of 50 leading PRC and multi-national companies in
China. A total of 1,000 questionnaires were distributed, with over 100
returned. Questionnaire respondents included top-level board members and
executives. The Study covered various industries and different regions.

A strategic study that focused primary on the structure, function, and organization of the boards, as well as the roles of the board members and their relationships, this research is unprecedented in China, and internationally, and provides new and unique insight to corporate governance in China.

Media Contacts

Jennifer Tow
Manifesto Ltd
Tel: +852-2526-1972
Email: jennifer@manifesto.com.hk

Gene Huang
Fudan University
Tel: +86-21-65102737
Email: zhiyinghuang@fudan.edu.cn

SHANGHAI: Minutes after the news he had quit as chief financial officer of KongZhong Corp, J.P. Gan took a call from a headhunter.

On offer was a top spot at a venture capital-backed Chinese company with plans for an overseas initial public offering.

Chief financial officers and top level executives are in high demand across the globe as cash-rich investment companies put their money to work buying companies, changing management teams, and growing the businesses.

In China, the effect is amplified. Young, western savvy CFOs who have language skills, regulatory knowledge and international experience are highly sought after and hard to find. “Talent is limited, in general. That's just the way things are in China,” said Jixun Foo, a Shanghai-based managing director of venture capital company Granite Global Ventures.

Aggravating the shortage is the flow of Western educated executives out of the corporate and investment banking sectors and into private equity firms and hedge funds.

While talented chief executives are in demand in China, many investors view equally talented CFOs as more significant and harder to find, given the increased accounting demands required by global securities markets.

Chinese companies need CFOs who can put in place or modernise their financial infrastructure to satisfy investors and regulators.

Gan is leaving KongZhong, a US$250mil Chinese wireless services company, for venture capital firm Qiming Venture Partners in Shanghai. He said he knew at least 10 venture-backed companies hunting for CFOs.

One key executive requirement is solid English skills.

A CFO of a foreign-listed or Hong Kong-listed Chinese company can expect to earn anywhere from US$150,000 to US$500,000, plus options, said several people interviewed for this article, with CEO's earning slightly more.

Also fuelling CFO demand is a string of successful new China listings, which have sparked a rush to the initial public offerings market. – Reuters

The Chinese government is facing a "severe" employment crisis with 34.5 million people expected to come on to the labor market from 2006 to 2010, according to a senior member of the Chinese People's Political Consultative Conference (CPPCC).

Chen Mingde, said at a meeting of the Standing Committee of the CPPCC National Committee, China's top advisory body, that job creation would be crucial to the government's aim of building a harmonious socialist society.

He said 25 million new job-seekers would enter the market this year, of whom 11 million might find jobs in urban areas, leaving 14 million unemployed.

Chen said employment opportunities could expand if local governments put job creation atop their agenda and vigorously develop the service sector, and small and medium enterprises.

Governments should launch special foundations to encourage private businesses, such as favorable loans, risk funds and investment guarantees for the self-employed.

He said local governments should encourage university graduates to work in rural areas in western China with favorable policies such as minimum salaries and medical care, and subsidies for those who go to undeveloped and remote rural areas.

Source: Xinhua

Forty nine foreign experts from 19 countries were honored with Friendship Awards Friday in Beijing by the Chinese government for their outstanding contributions to the country.

Vice Premier Hui Liangyu expressed his welcome to all the foreign experts and international friends working in China.

"It's a process of give and take. Talent exchanges benefit all countries involved," said Jan Wolter Post, who was honored for his contribution to China's automobile industry by introducing advanced technology and research on green-fuel automobiles.

China was confident in opening increasingly to the world and invite more foreign experts to work in various domestic sectors, Post said.

The Friendship Award, which was set up in 1991, is the highest award the government confers on foreign experts who have made outstanding contributions to China's economic and social progress.

"Your professional qualities and dedication have deeply impressed the Chinese people, and your profound friendship with the Chinese people and your valuable contributions to China's modernization will be eternally remembered by the Chinese government and the Chinese people," Hui said.

He said the government would continue to push forward the strategy of reinvigorating China through developing skills and lay equal emphasis on the training and development of domestic talent and introducing international expertise.

A total of 850 foreign experts from 55 countries had been conferred the award by last year.

"My husband got the award in 2003 for his efforts in environment protection," German NGO expert Dorath Lehrach said.

"At that time I thought maybe someday I could be honored this award, and today it comes true," said Lehrach, who assists Chinese NGO development.

According to the State Administration of Foreign Experts Affairs, China introduced 340,000 foreign experts and professionals in 2005, but the country urgently needs senior foreign professionals with innovative, decision-making and management skills.

"We sincerely hope for and welcome the arrival of more foreign experts, overseas Chinese experts and international friends to participate in China's modernization in every way in the future," Hui said.

After the ceremony, Hui, on behalf of Premier Wen Jiabao, invited the experts and their families to attend a grand reception to mark the 57th anniversary of the founding of the People's Republic of China, which falls on Saturday.

Source: Xinhua

China is one of the easiest places for recruiters to lure expatriate executives, but is also one of the hardest places for them to succeed, according to a study released on Tuesday.

A survey of more than 140 international recruiters by executive recruitment firm Korn/Ferry International found other popular places for expatriate workers were Western Europe, especially Britain, and North America, as well as Southeast Asia, especially Singapore.

The firm's 10th quarterly executive recruiter index found that the most difficult places to attract expatriates to work included the non-Gulf Middle East, Africa, Central and Eastern Europe, and South America.

"High-growth emerging nations often offer the greatest opportunities for expatriates, but they can also come with the most challenges," Chris van Someren, president of Korn/Ferry for Europe, Middle East and Africa, said in a statement.

Reasons that assignments failed included the lack of cultural fit, family or personal issues or a lack of direction from managers, the survey showed.

Things were toughest for expatriates in China, Japan and South Korea, the non-Gulf Middle East, and in Central and Eastern Europe, and South America, the poll found.

But 91 percent of the recruiters surveyed said executives with international experience were either extremely or somewhat desirable candidates.

"Expatriate assignments can be extremely beneficial for developing emerging leaders and for providing solutions for organizations undergoing significant growth or change - but expatriates are clearly not a substitute for local talent," said van Someren.

Recruiters said expatriate programs helped promote better cultural understanding, facilitated the opening of a new branch or office, and were good as a professional development tool.

But expatriate assignments were least effective for addressing local talent shortages, generating new business abroad and improving staff retention.

The poll found the average ideal length for an expatriate posting was about two-and-a-half years.

By Frank Mulligan, Talent Software

If you are hiring staff in China you will at some point have come across people who exaggerate their experience and skills, or downright lie.

An exaggeration will cause you little difficulty because you will be aware that everyone tends to exaggerate a little. A lie on the other hand will cost you a huge amount of money if you do not catch it, and early.

Solutions that deal with these issues are available, both online and offline, but it has to be said that the online ones offer real value. The offline solutions are a little obvious, so you probably would have introduced them already if you could.

Hiring Issues
For the issue of past experience you can get an objective assessment by doing a Reference Check but our research indicates that companies in China only do this for about 10% of staff. The rationale for this seems to be that it is seen as a difficult process.

The biggest issue in China is fake degrees, which can be bought for about RMB400 on the streets. They are exact, perfect copies of original certificates but obviously they are easily identified if you have the original.

Luckily there is a website to check degrees from Chinese universities. All degrees after 2001 can be checked and the system shows you the final certificate with the person’s picture, number and so on.

Dealing with certifications is a little different. There are so many certifications authorities and training companies that you cannot devise a system to be able to deal with this easily. Instead we would recommend that you test the skill.

This could be on paper or online but again our experience shows that companies tend not to do the testing when it is on paper. The tests have to be scored, and often by someone with knowledge of that skill. Online tests score automatically and integrate easily with the online hiring system.

An excellent way of testing to see if someone has really done what they say they have done is Work Samples. All this involves is asking the candidate to produce a piece of work or solve a problem that is specific to the job he is being hired for. This must be done in your office and he has to have all the tools necessary for the solution.

What Could Happen
In case you still do not feel that any checking is really necessary the statistics below will give you more details of what you are letting yourself in for. The statistics are worldwide and cover all aspects of the hiring process.

- 9% of job applicants falsely claimed they had a college degree, listed false employers, or identified jobs that didn’t exist. *Source: Resume Inflation: Two Wrongs May Mean No Rights, by Barbara Kat Repa

- 34% of all application forms contain outright lies about experience, education, and ability to perform essential functions on the job. *Source: Wall Street Journal

- 11% of job applicants misrepresented why they left a former employer. *Source: Resume Inflation: Two Wrongs May Mean No Rights, by Barbara Kat Repa, Nolo .com, 8/801

- Nearly one-third of job applicants listed dates of employment that were inaccurate by more than three months. *Source: Resume Inflation: Two Wrongs May Mean No Rights, by Barbara Kat Repa

- As many as 30% of jobseekers exaggerate their accomplishments, and about 10% ’seriously misrepresent’ their background. *Source: The Complete Reference Checking Book, by Edward C. Adler

- 30% of all business failures are caused by employee theft. *Source: American Management Association and US Chamber of Commerce

- 14.7% of all applicants admit to theft of merchandise from an employer. *Source: Reid Psychological Systems (Don’t Hire a Crook, Dennis DeMay; James R. Flowers, Jr., 1999 Facts on Demand Press, pg. 88)

- 4.4% of all applicants admit to theft of cash from an employer. *Source: Reid Psychological Systems (Don’t Hire a Crook, Dennis DeMay; James R. Flowers, Jr., 1999 Facts on Demand Press, pg. 88)

- 33% of all applicants admit to being tempted to steal from an employer. *Source: Security Magazine, 3/97

- It costs $7,000 to replace a salaried employee, $10,000 to replace a mid-level employee, and $40,000 to replace a senior executive. *Source: Recruiting Times

- In 1999, employers lost 60% of negligent hiring/supervision jury trials. *Source: The Reish and Luftman Practical Guide to Employment Law

- On average, in U.S. businesses, at least half of all new hires don’t work out. *Source: Fortune, 2/00

If you really need professional help on this issue please check out Chinawhys.

When she returned to China after more than a decade away, Dutchwoman Murielle Van de Pol was amazed at the huge changes that had taken place in the country.

She studied at Peking University 12 years ago, and now is back to attend the 2006 Conference on the Exchange of International Professionals which ended here on Thursday.

The changes are so massive that China looks like a completely different country, she told Xinhua excitedly.

Representing the Netherlands Senior Experts (PUM) in China, she hopes to introduce more Dutch experts to China during the conference.

Like Murielle, many foreigners living in China are experiencing the rapid changes taking place in this ancient civilization. The dynamism and energy of China make it an attractive destination for foreign experts.

Piet Hein de Wit, PUM coordinator, comes to China four to five times a year. He said he likes working in China and the people here are very hospitable.

According to Piet, PUM has signed 80 projects agreements with Chinese organizations this year and over the last 12 years about 4,000 Dutch experts have been introduced to China to work on about 1,000 projects.

During the early years of China's reform and opening up in the late 1970s, China only introduced about 1,000 foreign experts and professionals each year. The number has grown to 200,000-400,000 in recent years.

Last year China introduced 340,000 foreign experts and professionals, according to statistics from China's State Administration of Foreign Experts Affairs (SAFEA).

SAFEA spokesman Liu Yongzhi said China's rapid economic growth was the key factor in attracting more international talent, and the numbers of foreign professionals introduced to China is not likely to decrease over the next five years.

Pay levels in some companies and universities are now similar or even better than in developed countries, and this is another drawcard, Liu said.

About 700 foreign delegations from 30 countries, including Russia, the United States, Japan and France, attended the conference and 2068 letters of intent were signed.

Source: Xinhua

Only one-third of company directors in Asia outside Japan have taken formal steps to ensure an orderly succession when a chief executive leaves, a recruitment firm's study said Monday.
The findings are a stark contrast to some Western countries where up to 80 percent of directors have steps in place to see that when one chief executive departs, a replacement is ready to assume the post.

Among the markets surveyed were China, Hong Kong, Thailand, Malaysia, Singapore, Australia and New Zealand.

The board of directors study was produced by Korn/Ferry International. It looked at boardroom practices of major companies, covering 1,200 directors from 15 economies. Compared to Asia's 34 percent of directors who had taken formal steps to ensure orderly succession, the Americas, including the United States, Brazil and Colombia, emerged with 76 percent, according to results published in The Straits Times.

Eighty percent of companies in Australia and New Zealand have a process for management succession.

"Boards in the Asia-Pacific are beginning to take a more calculated approach to board governance, adopting more Western practices to improve the performance of their boards," Marta Grutka, regional director of marketing at Korn/Ferry, was quoted as saying.

Noting that much of Asia has handled management changes through family ties, she said that the process is changing.

Analysts International, which provides business information about Technology, Media and Telecom (TMT) industries in China, says that China’s online recruiting market reached RMB 160.9 Million in 2006 .

As the overall online recruiting market keeps on increasing, online recruiting service vendors turn to focus more on the applications of mobile Internet, and come to provide SMS services one after another. The rapid growth of employees brought great development potential for the online recruitment, and overseas investments come to pay attention to the online recruiting market. Analysts International thinks that vendors who have the capability to provide personalised services will become the first ones to charge the users for the services. And meanwhile, more online recruiting websites will put more focus on the exploration on the regional market.

According to Analysts International’s research, the China’s online recruiting market reached RMB 160.9 Million in 2006Q2 with a growth of 8.44% over last quarter. Among which, online recruiting revenue from recruiting web sites whose services are targeted at national scope took 76.4% of the overall market size, and revenue from recruiting web sites with service targeted at provincial scope took 19.3%.

Figure: China’s Online Recruiting Market of 2006 Q2

Analysts International thinks that combination of online services and offline promotion is a major profit model of online recruiting. “As the rising of the online recruiting industry, online recruiting gradually transfer to industry segmentation, industry-based professional services become popular among users. Advantage becomes more obvious for those online recruiting service providers who focus on industry services,” says Huang Yongtao, analyst from Analysts International, “If we look from the aspect of industry competition, we can find that more communities and search engine portals start their business expansion to online recruiting in hopes of making good use of their advantage of accumulations on interpersonal relationships to achieve business value in HR field.”

Minister of Labor and Social Security, Tian Chengping, has said that China faces pressure to provide jobs to the more than 100 million surplus rural laborers and that the situation is unlikely to change in the near future.

These comments were made Thursday when he gave a speech at American think-tank Brookings Institute in Washington.

Tian Chengping explained that in the coming years, 24 million people will need jobs in cities and towns. However there will only be 11 million jobs available, including posts made available by retirement. There will be 13 million surplus laborers in urban areas.

He said that in central and western regions and resource-exhausted cities, the pressure is even greater. In rural China there are 497 million laborers, approximately 200 million of which have migrated to towns or cities for work. However, there is still a 100 million surplus labor force.

Tian Chengping says China has made a great effort to create more jobs. Between 1998 and 2005, 19 million workers laid-off by state-owned enterprises were reemployed. At the end of last year, the urban unemployment rate was below 4.2 percent. A total of 36,000 employment agencies have been established.

Tian Chengping also talked about China's efforts to establish a social security system and to guarantee workers' rights. Those who neglect workers' rights can be punished according to law.

By People's Daily Online

Winny Wang
2006-09-15
UNEMPLOYMENT will be a long-term problem in China as the country has a large population but insufficient jobs, Tian Chengping, minister of Labor and Social Security, said yesterday during a speech at the Brookings Institution in Washington DC.

Tian said more than 24 million people will find jobs every year in cities and towns in the next few years, while the country can only offer 11 million vacancies. The problem is much more serious in middle and western regions, he said.

In rural areas, about 100 million people are unemployed among the workforce of 497 million.

Tian said China has made an effort to decrease its unemployment rate. From 1998 to 2005, 19 million laid-off workers were reemployed, and the unemployment rate in urban areas remained stable at 4.2 percent by the end of last year.

The country has set up more than 36,000 job agencies

At a regular State Council meeting on July 25, Chinese Premier Wen Jiabao proposed that China should keep its urban unemployment rate within 5 percent in the coming five years.

YOU KNOW YOU HAVE BEEN AN EXPAT IN CHINA TOO LONG WHEN:

- You find yourself crying over a menu in a western restaurant because they
serve potato salad
- You eat every kind of meat off the bone, and then spit those bones on the table
- Squatters make you dizzy, but you now believe, despite the smell, they are cleaner than western toilets
-You are tired of explaining that Africa is a Continent, not a country.
- You see nothing wrong with standing on a white stripe in the middle of a
highway while cars whiz past you at 90kph
- You don't blink an eye when a complete stranger wants to take a photo of
you with his family
- You actually put some thought into which live snake you want cooked for
your meal
- You eat soup with chopsticks
- you use Kleenex for table napkins
- You drink warm sodas and find them refreshing
- You are accustomed to seeing people's heads popping up and down in the VCD
you are watching
- You no longer use articles when you speak
- you bargain with the grocer over the cost of a head of lettuce
- You no longer check the expiration date on the milk you just bought.
- You buy a movie that hasn't been released theatrically yet at home.
- You comment that the pollution "isn't really that bad..."
- You start wearing a face mask on windy days and wonder at the "silly
foreigners" who don't do the same
- You complain about that price difference of DVDs/VCDs/CDs bought in the
stores and on the streets
- You start to wonder if the chocolate ice cream you find in the store is
even chocolate... sure it is brown, but...
- You can't find face lotion or cleanser that does not bleach your skin
whiter....
You have a collection of Umbrellas
-You have actually gone shopping in your pajamas
-You give a beggar a handful of fen and he gives them back
- You have trouble sleeping when you go home for a visit because it's just
too darn quiet
- You point out foreigners to your Chinese friends even though you're
foreign yourself.
- You know words in Chinese for which you don't know the translation in
English
- You answer 'China' when people ask where you're from
- You pick your nose, burp, fart, and scratch so much even your Chinese
friends get embarrassed
- You get a discount if you speak English, but you pay more for Putonghua (Mandarin)
- You call home and your family tell you to speak faster and stop correcting
their grammar
- You eat cake with chopsticks
- You constantly wonder if everything has been boiled long enough.
- You answer 'So is mine.' when people say their English is so poor
- You answer 'Into what?' when people say China is developing
- You convince yourself that it doesn't matter how dirty the cooks' hands
are, cooking will fix it
- If there are only 4 screaming children running around the classroom, you
consider it a good primary class.
- If there are only 4 students sleeping, you consider it a good middle
school class.
- If there are only 4 cell phone addicted college students messaging its a good class.
- You love tofu because there's nothing to spit out and it doesn't have any
taste
- You start saying things like:' 'I very like'
- You hold hands with others of the same sex and think nothing of it
- You avoid touching those of opposite sex like they have bird flu
- You've got a pre-paid ticket with a reserved seat on a train or
plane, but you still run like mad to to the get there first
- You forget that vegetable soup is actually pesticide broth
- Smoking is doing less harm to your lungs than breathing
- You're beginning to like fruit salad and mayonnaise
-- Everyone wants to be your friend - all you have to do is teach them
English for free
- Everyone wants to teach you Chinese by speaking to you in English
- Your Chinese lessons consist of 50 words your teacher wants to know in
English
- You tell people you don't understand, so they write it for you - in
Chinese.
- Your boss thinks you're a stupid foreigner if you let him cheat you, but
thinks you're a bad foreigner if you don't
- Your boss speaks really good English until you ask for more money
- You have no qualms that someone who thinks you're stupid and gullible has
total control over your life.
- You too think that the ugliest western man always has a beautiful Chinese girlfriend.
- A hike up a mountain calls for a plastic grocery bag full of junk food.
-- The more you listen to the news, the more uninformed you are
- It fascinates you that when the national news is on, your forty TV channels magically become the
same channel.
- Absolutely everything that can possibly be eaten is in some way good for
your health.
- Only five minutes of prep time for a unannounced class no longer fazes you
-- Your housekeeper throws out the chicken breast you have marinating in
garlic and olive oil but organizes your empty beer bottles and cans and you understand
- You leave your laundry hanging up for more than a day its dirtier than it
was before you washed it
And my favorite:
- You actually believe you're here to teach English

By Candace Corner
CareerBuilder.com

(CareerBuilder.com) -- Money, power, fame and glamour are just some of the elements that take a career choice from tedious to tantalizing, but there's a little more to it than that.

In the same way that physical beauty is in the eye of the beholder, the definition of what qualifies as a "sexy" is a matter of what you find most attractive about a job's responsibilities.

Firefighters are sexy because their role requires bravery, and doctors have sexy jobs because they have commitment and credentials. Danger and intrigue can also factor in to what we find alluring.

If there's one other thing sexy jobs share with the perceptions of physical beauty, it's that society, for the most part, creates a general guideline for what makes a job hot. We find interest in the rich and famous and the jobs that seem to have the best perks.

Here are some examples of jobs that sizzle:

1. Showgirl

Why it's sexy: Their job involves performing dances in elaborate, revealing costumes onstage.

Where you'll find them: For the most part, it's Vegas, baby. They're onstage, in the dressing room or working out.

The pros: They're in the spotlight, in peak shape, and always look amazing.

The cons: It's harder than it looks, and involves constant exercise and a lot of practicing. Costume headpieces are heavy and people often confuse showgirls with being part of the sex industry.

2. Couture salespeople

Why it's sexy: The rich and famous often shop high-end. The right store and location means there is a likely chance of working with A-list celebrities and other beautiful people.

Where you'll find them: Mostly in New York, Los Angeles, London, Paris and Milan, but basically anywhere where wearing the latest trend is more important than the price tag.

The pros: It opens up opportunities for meeting the right people to launch a future position in fashion or as a personal assistant. And you can't beat the employee discount.

The cons: Retail is still retail, so expect to continue folding sweaters, re-organizing racks and assisting crabby customers.

3. Fashion journalist

Why it's sexy: These people know the industry inside and out, attend all of the fashion shows and schmooze with designers and other influential people.

Where you'll find them: In the press seats by the runway and on location for interviews. While it's not mandatory, there are more people working in the major fashion capitals.

The pros: Amazing samples and the opportunity to meet some of the biggest names in the business.

The cons: Finding work can be difficult. Writing reviews in this industry means a lot of working hours and dealing with city expenses and difficult people.

4. Runway model

Why it's sexy: They showcase the latest fashion and their job is to be beautiful.

Where you'll find them: On the runway and at fashion shoots, largely at the fashion capitals, but also anywhere there are designers looking to show the public their newest creations.

The pros: They have a reputation for being hot and they get paid for it.

The cons: Competition is fierce. The model look that's in-demand at the moment may not be what designers are looking for next season.

5. Hotel concierge

Why it's sexy: They're smooth operators and know all the right people and places in the area.

Where you'll find them: At upscale hotel locations and around the grounds making sure everyone's happy.

The pros: Area businesses are more likely to treat you right, since you recommend new business.

The cons: Long hours and the not-so-glamorous duty of dealing regularly with difficult personalities.

6. Makeup artist

Why it's sexy: They transform and enhance people's looks to be their best or most interesting.

Where you'll find them: At counters, on film sets, in dressing rooms and anyplace else where someone is going to be televised, photographed or doing a big appearance.

The pros: There is an amazing chance for advancement from counter rep to launching a signature beauty line or garnering celeb clientele once a reputation is established.

The cons: A client with a good experience will say a lot, but so will those with bad experiences. Word-of-mouth creates the biggest buzz, so this could work against a makeup artist.

7. Stunt double

Why it's sexy: Stunt men and women defeat the odds while they leaping off buildings, cruising through fires and conquering car crashes. The thrill and the danger create a high.

Where you'll find them: Somewhere dangerous or somewhere relatively safe and doing something dangerous.

The pros: They get the reputation of surviving some of the most death-defying acts humanly possible.

The cons: Stunts don't always get the recognition they deserve in the public eye.

8. Magazine photographer

Why it's sexy: They are paid to capture images of beautiful and interesting people and locations.

Where you'll find them: At photo shoots and in dark rooms. The majority of the work is in New York and Los Angeles.

The pros: Their creative vision pays off, literally.

The cons: Expensive and heavy equipment, finding the right frame and needing to talk your subjects into your ideas.

9.Club owner

Why it's sexy: They are their own bosses and they create the atmosphere where people go to party.

Where you'll find them: Working the room and overseeing the scene.

The pros: As the owners of the area hotspots, everyone wants to know them. Reputation makes the business.

The cons: Trends come and go, and if club owners can't keep it interesting, patrons will party elsewhere.

10.Professional investigator

Why it's sexy: Their job is all about uncovering confidential information, whether it's insurance fraud or cheating spouses.

Where you'll find them: Doing research, testifying in court or on location for surveillance.

The pros: Uncovering infidelities and getting justice for the romantically wronged is their bread and butter.

The cons: Serving subpoenas and other court-related work is the unglamorous side of their business. The work can also be sometimes perceived as seedy by the general public.

By Thomas Hout and John Wong

From The Wall Street Journal Online

A stereotype is forming around China's acquisitions in the U.S. -- buy fast rather than build slow. Lenovo's buyout of IBM's PC unit, TCL's buyout of France's Thomson and with it RCA, and now Haier's bid for Maytag all suggest that China is in a hurry to go global and will freely spend low-cost money to acquire our brands and distribution access, plus secure an outlet for their low-cost products made in China.

The problem with this view is that China's most successful acquisitions to date in the U.S. have little to do with China's low-cost money and workers or buying our brands. They are instead all about Chinese management skill and U.S. workers. These no-name Chinese acquisitions are turn-arounds founded on hard-nosed Chinese business practices, and they import less product from China than most U.S. manufacturers do.

Haier in fact doesn't fit the mold either. It has spent 10 years building its own brand in the U.S. and now has its name on 10% of new U.S. refrigerator sales. Large units, too expensive to ship from China, are made in the U.S. Haier succeeded by partnering with a young, market-savvy U.S. entrepreneur, Michael Jemal, who created down-market, niche refrigerator products that the big U.S. brands ignored and won its own distribution access by customizing products for the big box retailers. Haier's bid for Maytag is a turn-around play premised on Haier's proven management practices. Otherwise, sophisticated co-investors like Blackstone and Bain Capital would not be aboard.

Chinese companies that are successfully building slow in the U.S. include Wanxiang and China International Marine Container (CIMC). Wanxiang Group, China's leading auto-parts maker, tried to export auto parts from China to the U.S. but found itself under-priced by Polish and Romanian imports. So it adopted a private equity role in building a U.S. business: it joint ventures or acquires stakes in struggling U.S. manufacturers, then restructures their management and operations based on what Wanxiang learned in China. The Group now has equity positions in over 30 auto-parts companies world-wide, and its U.S. sales of nearly $400 million are more profitable than its business back home.

CIMC may be the world's least visible globally dominant company, making 40% of all shipping containers. In the 1990s it consolidated South China's big container business -- much like GM rolled-up U.S. autos in the 1930s -- by buying up smaller local producers with non-voting stock, then rationalized production among these subsidiaries. Only then did CIMC acquire a U.S. truck-trailer maker from a bankrupt parent and turn it around, using Chinese-made container components and factory floor technology.

Chinese management is an under-rated asset in American discussions of China's global strategy. Almost all large successful companies in China are turn-arounds of formerly politically managed state-owned enterprises. The managers who took them over during the 1980s and 1990s reforms had to learn what any turn-around specialist does -- flatten layers, fire the pretenders, prune losing businesses, and hammer operating costs down. The CEOs of Haier, Wanxiang, and CIMC all started and spent their careers on the factory floor. China's low-cost mentality is just as much about cheap management as about cheap labor.

So it makes sense that China's first and surest global companies will be in mid-tech or modest brand businesses built on ground-level operating skills, opportunism, and local partnerships -- not high-profile consumer brands or high tech. These proven Chinese strengths also play perfectly to deep changes going on in the U.S. economy -- revitalization of distressed small manufacturers through new partnerships, private equity's growing role, and even lower income consumers' trading-down to lower-priced household durables.

Not all Chinese companies, however, think they have the time to build slow. Lenovo and TCL are in fast-moving businesses where strong global competitors are breathing down their neck in China -- especially, Dell, Samsung, Nokia and Motorola. Computers, flat-screen televisions, cell phones, and mobile consumer electronics devices of all kinds may be made in China but controlled by multinationals there who are pulling away from Chinese competitors.

This issue of pace is a problem for China. Product and marketing innovation is rooted in close contact with customers and close collaboration with adjacent, complementary technologies. Chinese state-owned companies have typically been separated from end customers by government-controlled distribution intermediaries. The result is China doesn't have what Silicon Valley and other innovation clusters have -- diffusion of knowledge horizontally and movement of technologists between firms.

Too much can be expected of China's high-profile companies now. The early rounds of Chinese globalizing favor less glamorous, hard-nosed Chinese companies who have a lot to offer to industrial America right now.

By Alan Paul

From The Wall Street Journal Online

Please don't call me a trailing spouse. It's a horrible term -- sexist and demeaning when applied to a woman and downright emasculating when slapped on a man. But lingo is lingo and facts are facts. And the fact is, in expat land, I am a trailing spouse. I became one the moment I put my career on ice, packed up the house and three kids in suburban New Jersey and moved to Beijing in support of my wife and her new job.

This isn't all new to me. I haven't set foot in an office for nearly 10 years, working from home as a magazine writer and editor. As our three children's primary caregiver I am used to being the only adult male in a room, having chaperoned field trips, assisted in kindergarten classes and shown up for countless midday assemblies. Still, the dividing line is much sharper here. After all, we have uprooted our family and moved to the other side of the world for someone's job. And it's not mine.

While my wife, Rebecca, has long had the job that parents like to brag about, as a rising editor at The Wall Street Journal, I'm the one who has managed to live out the widespread male fantasy of getting paid for a state of perpetual adolescence. As a senior writer for Guitar World and the basketball magazine Slam, I was paid to write the kinds of things that most men call procrastination: Who are the five greatest power forwards of all time? Name rock guitar's 10 greatest riffs. Why isn't Lynyrd Skynyrd in the Rock and Roll Hall of Fame? When it was time to leave home and go to work, my destinations were press-row seats at NBA games or New York rock shows. It's not a life I could easily abandon.

Yet when Rebecca casually mentioned to a friend last December that the Journal's China Bureau Chief job was posted, I urged her to go for it. She was shocked. I had, after all, nipped in the bud talk of moving to Chicago, Washington, D.C., and San Francisco, hesitant to give up my gigs and support system to head off into the great unknown. "But this is different," I explained. "It's China!"

Six months later, worn out and frazzled from preparing to pull up stakes, I found myself asking my doctor for a sleeping-pill prescription to help me get some rest. A simple thought ran through my head: "Me and my big mouth."

For months, I had wondered what it would feel like to board a plane with a one-way ticket to Beijing. When the moment came last August it felt like a huge exhale. A tremendous sense of relief washed over me, knowing that our 15 suitcases were secure in the cargo bin, life as I knew it was fading in the rearview mirror and adventures were looming ahead. Whatever difficulties the transition posed had to be a piece of cake compared to the painstaking, numbing process of erasing our existence in Maplewood, N.J., and emptying the house we had lived in for seven years.

Moving to China with three kids -- Jacob, 7, Eli, 5 and Anna, 2 -- seemed so wild and ambitious back in Maplewood. Then we arrived here -- to the Western style "villa" my wife's company owns in a tree-lined, European style gated housing compound called Beijing Riviera -- and felt anything but exotic. Standing on the playground watching my kids run around, I was surrounded by dozens of moms from around the world. One of the first questions people ask upon meeting one another is, "Where was your last posting?" We were not only fresh off the boat, but fresh on the scene in a larger sense. Our most exotic traits were the reversal of gender rules and our straight-out-of-the-burbs background.

I met an 8-year-old girl whose mother was Indian and father Dutch but who had never lived anywhere but Beijing. Eli became good friends with a 5-year-old British girl with a perfect English accent who was born and raised in Hong Kong. At a school assembly, the principal asked how many kids spoke four languages and about 20% raised their hands.

Fellow expats were not the only ones not quite sure what to make of me. The company driver had to get used to not only having a lady boss, but figuring out how to deal with a male tai tai (lady of the house). Like most people in his position, Mr. D is a bit of a heavy. He is also indisputably loyal, officious and efficient. He has driven us around town to perform the many bureaucratic errands required to live here -- processing visas, getting press credentials, applying for driver's licenses. He also provides invaluable assistance in many of these tasks.

On one such errand, Mr. D's view of me was stood on its head. I am credentialed and sanctioned as the Beijing Bureau Chief for Slam magazine. We waited in line at the massive, bustling government office where visas are issued for Chinese and foreigners alike. When it was my turn, the policeman processing my paperwork looked up from his stamping to say, "I very like Slam."

Next came a fairly intense, in-depth basketball discussion. He wanted to know who I thought was the best Chinese basketball player, "after Yao Ming." Mr. D watched and listened in amazement, then turned to the officer and asked him something in Chinese. The two had an animated chat, and Mr. D looked at me and smiled and laughed. Afterward, something seemed to change in the way he regarded me.

While my wife went off to work, burying herself in a demanding new position, the kids were adapting to life halfway around the world with remarkable ease, nonchalantly starting at a British-run school complete with uniforms. Frankly, they inspired me to keep moving forward and never look back, as I walked to Starbucks everyday, laptop bag slung across my shoulder, grateful for the free wireless service as I waited for my DSL hookup to be activated. It didn't take long to sell a story on bike riding through crowded, downtown Beijing and start interviewing the stars of the Chinese national basketball team, in search of the next Yao. You know -- getting paid for the kind of stuff most people call procrastination.

By Carol Hymowitz

From The Wall Street Journal Online

SHANGHAI -- On a recent evening stroll, James Rice, a vice president at Tyson Foods and the head of its China operations, wandered into a narrow alley, drawn by the pungent scent of spices coming from a food vendor's stall. The vendor was selling skewers of barbecued lamb coated with cumin, a popular evening snack here.

That detour gave Mr. Rice the idea for a new food product: cumin-flavored chicken strips. "I found just what I was looking for -- an exotic flavor that is authentically Chinese," he says. Within a few weeks, his research-and-development manager had created a new recipe, and members of his marketing staff had begun testing it with consumers. When they got a 90% approval rating, they knew they had a hit. Mr. Rice began selling the new product in just two months.

That quick launch was the result of strong teamwork by his staff. It also reflects the freedom Mr. Rice has been given by superiors at Tyson's headquarters in Springdale, Ark., to build the company's business in China as he thinks best. "When I see a way to modify or create a new product I think we can make money on, I don't have to go through layers of management or wait months to get a decision," he says.

Some of the executives who oversee operations for multinational companies in China have this kind of autonomy. Others must seek approval from bosses located elsewhere for even small decisions, such as making a change in packaging or pricing. Many spend considerable time weighing when to act independently and when to take marching orders from corporate headquarters.

It is the yin-yang management challenge for overseas executives everywhere. But the stakes are higher in China, the world's fastest growing economy, where every multinational company wants to do business. "If you don't have flexibility to respond quickly to new markets or situations -- to make a pricing or flavor change -- it's very hard to compete against Chinese companies, which do react quickly and also have the advantage of much lower fixed costs," Mr. Rice says.

It also can be an operational nightmare when corporate bosses insist on centralized systems. An executive at an industrial-products concern spent months last year arguing with his bosses in the U.S. about an information-technology system they wanted to use globally that wasn't compatible with Chinese characters. They purchased the system, and he had to buy a separate IT system that his employees could actually use.

A manager at a consumer-products company wanted to reduce the package size of a product in order to lower the cost and attract more lower-income Chinese customers. He sent the request to his boss, the vice president of Asia operations, who sent it to the vice president of international, who in turn sent it to senior executives in the U.S. The request was approved, but by then five months had passed and a competitor already had launched a similar product in a small package.

Country managers who focus on what their superiors back home want may not pay close enough attention to local preferences and practices. That can be a fatal error, says Desmond Wong, Americas Coordinating Partner-China at Ernst & Young Americas. "Anyone who manages Chinese employees has to understand that they expect an extra month's pay at Chinese New Year, and if they don't get it, they'll try to find work elsewhere," he says.

Local hires also want assurance that their boss has the ear and respect of his or her boss. "So it's important to persuade top executives to visit China at least once a year," Mr. Wong says. "And if you tell employees before the visit that you want them to look good to the bosses, they'll go extra miles for you."

The most successful executives in China have autonomy, as well as access to corporate chiefs when they need it. Jack Q. Gao, vice president and regional director of Autodesk's operations in China, believes that "to grow in this market, which is so dynamic and unique, I need to be directly supported by top executives who can present one strategy to the government." China's government, he notes, not only sets economic policy but is the largest customer of Autodesk and many other multinational companies.

Since he took his current job two years ago, Mr. Gao, who oversees about 1,600 employees, has opened research-and-development centers in China to create software products tailored for Chinese customers. He also is partnering with local businesses to create new applications for AutoCAD, Autodesk's software design tool. "It's a new business model," he says, and it may help to offset software piracy.

Mr. Gao meets several times each year with Autodesk Chief Executive Carol Bartz, along with the company's chief operating officer, head of global sales and vice president of the Asia-Pacific region. The group, which is known as the China Initiative Steering Committee, is also available to confer about "anything unique or experimental I may want to try," he says, " and gives me a direct channel [to the top] for decision making." Unlike some of his counterparts at other multinational companies, he adds, "I don't have to spend all my time educating corporate executives about China."

By Andrew Browne

From The Wall Street Journal Online

When Dominic Leung moved to China this year as chairman of the country's second-largest life insurer, the Hong Kong executive startled his senior managers with a blunt message: Skip the formalities.

On his first outing to a branch office, the staff formed a welcoming line that snaked from the elevator lobby down a long corridor to the reception counter -- the kind of over-the-top gesture that strokes the egos of many Chinese corporate VIPs. But Mr. Leung was embarrassed, and annoyed. "I said to the general manager: 'You never do that again,' " he recalls. " 'I don't need that.' "

Mr. Leung, who worked previously for American International Group and the United Kingdom's Prudential PLC, says he is now trying to persuade managers at Ping An Life Insurance not to greet him personally at the airport. "To me it's wasting time -- they should be working in the office," he says.

Mr. Leung, a 56-year-old insurance-industry veteran, is part of a new wave of "overseas Chinese" being recruited to fill top slots in Chinese companies. These executives -- from Hong Kong, Taiwan, Singapore and other locales where Chinese have settled -- have long been wooed by multinationals to run their China operations. Now, some of the brightest are jumping to Chinese companies instead.

In some ways, the trend points to the relative fortunes of Chinese companies in China's vast domestic economy, where local businesses have proved to be at least the equal of multinationals in the battle for market share. Increasingly, Chinese companies are seen as a springboard for the ambitions of overseas Chinese with U.S. and European graduate degrees in business. Some who have made the leap say they were prompted by a glass ceiling at multinationals for ethnic Chinese employees.

Once the new recruits get over initial culture shock, they report few regrets. Middle-ranking managers who once reported up a chain of command to New York or Frankfurt suddenly find themselves controlling companies that are emerging as national leaders in the world's fastest-growing major economy.

In a multinational company, "headquarters calls all the shots. But if you work for a Chinese company, you call the shots," says Zheng Xue-cheng, a corporate search executive with Egon Zehnder International, which recruits high-level talent for Ping An and other Chinese companies.

Corporate perks may be meager in Chinese firms, but pay is competitive and stock options can be generous -- in rare cases, sensational. After quitting his job running Microsoft China, Tang Jun, a naturalized U.S. citizen, joined Chinese online gaming company Shanda Interactive Entertainment and picked up 2.6 million stock options now valued at more than $90 million. (The company was listed on the Nasdaq Stock Market this year.)

Tan Wee-Seng, an ethnic Chinese from Malaysia, gave up housing, education and car allowances when he left a senior business role at Reuters news service last year to join Li-Ning Sports, a sportswear company run by a former Chinese Olympic gymnast. "But the options are better," says Mr. Tan, Li-Ning's chief financial officer who steered the company through a Hong Kong listing this year.

Another lure: the chance to "help and transform this country," says Mr. Tan. Ping An's Mr. Leung says moving to the company gives him a feeling of belonging in China. Working for a multinational "I was an outsider, maybe even a foreigner," he says. "Now I'm one of them."

Chinese companies are more open-minded about international recruitment than their counterparts elsewhere in Asia. In part, the openness is driven by necessity: Chinese companies planning to raise capital overseas often lack financial managers with the skills to navigate complex international regulatory and compliance issues.

In some industries, like banking and insurance, Chinese companies face an onslaught of foreign competition as domestic markets open, and they need managers who can implement smart sales and marketing strategies and internal restructuring.

China Construction Bank, one of the country's Big Four lenders, planning to issue shares next year, has invited a leading Japanese banker to sit on its board of directors -- a first for the bank. The Bank of China, also in line to list, is searching overseas to fill positions up to the level of vice president.

Ping An Group, parent of Ping An Life Insurance, has gone further than perhaps any major Chinese company in opening its staff ranks: Half of its top 50 managers come from outside the Chinese mainland, says Sun Jian Yi, the group's deputy chief executive officer. As a start-up in 1988, Ping An was up against an established state monopoly, the People's Insurance Co. of China. To compete, it had to look as different from PICC as possible. "We said we wanted to follow the international market," says Mr. Sun. "We needed overseas money, overseas systems, overseas talent."

Goldman Sachs Group and Morgan Stanley came in as early private-equity investors. The Shenzhen-based company, which listed just across the border in Hong Kong this year, hired the McKinsey & Co. consultant who drew up the company's long-term strategy, Louis Cheung.

Mr. Cheung, a 40-year-old Cambridge-educated Hong Kong native, joined Ping An after turning down offers from an international investment bank and a dot-com. Mr. Cheung, 36 when he joined Ping An, says he wanted a company offering super-charged growth, and "China is the only country where you can get that kind of growth." Now Ping An's chief operating officer, he shuttles between Shenzhen and Hong Kong, where his wife, a Singaporean investment banker, lives.

For Ping An and other Chinese companies, overseas Chinese are an easier fit than other outsiders. For a start, they can speed-read office memos in Chinese handwriting. But the high-paid recruits can also spark resentments. Ping An runs a two-track pay system. "At first people asked: 'Why are you paying so much?' " says Mr. Sun, who happily admits he earns less than some of the overseas Chinese who work under him. "We had to educate our work force."

And imported management methods don't always go down well. Staff at Ping An headquarters are fuming over a new electronic card system at the main door. Employees who leave the building for longer than 30 minutes must explain their absence to a supervisor. "Not even a mosquito can get out of this place without permission," grumbles a junior manager.

Alan Ku, Ping An's Taiwan human-resources manager formerly with Unilever, says the system is now being reviewed.

By Kathy Chen and Peter Wonacott

From The Wall Street Journal Online

China's office workers may not know who Dilbert is, but many are feeling the pain of the popular cartoon character who works long hours for a soulless corporation.

And they are starting to fight back.

PricewaterhouseCoopers' Beijing office recently has seen a rash of resignations in its auditing division, and, in July, a group of senior auditors approached the firm's partners to complain about what they described as paltry pay and long hours.

"People felt that they were doing a very good job, but their salary increases weren't ideal," says one auditor who quit the firm this summer after working there several years, partly because of the long hours. To top it off, he says, even though senior auditors often worked until 1 a.m. or 2 a.m. each night and on weekends, they weren't eligible for overtime pay (though they could take time off).

PricewaterhouseCoopers quietly settled the dispute by agreeing to pay all of their auditors overtime and to issue annual bonuses early. "We hadn't done the best job communicating with staff, which happens when we're so busy," says Dave McCann, the firm's partner in charge of human resources in China. "Now we're starting more communications."

Problems are brewing in the cubicles at multinationals in China. As business booms, foreign companies are pressuring local employees to be more productive, even as budgets -- and salaries -- remain tight. The trend coincides with some fundamental changes in China's white-collar work force: No longer satisfied with just a job at a brand-name foreign firm, many Chinese professionals aspire to more leisure time and other accoutrements of a middle-class lifestyle. They also are showing greater awareness of their legal rights under labor laws.

The result is that labor friction, once confined to factories and unprofitable state enterprises, is seeping into the offices of multinationals in China. "At first, Chinese employees [at these companies] felt the salaries were higher, so they put up with the conditions. But gradually, they have become more and more dissatisfied and want to see improvements," says Zou Zhen, a division chief at the state-backed All-China Federation of Trade Unions.

Adds Frank Gallo, head of the Beijing office of human-resources consulting firm Watson Wyatt Worldwide, "Companies need to be more conscious of people's needs."

A multinational job in China is still much cushier than working for a state-run company. While workers may be under more pressure to perform, monthly salaries are equivalent to $400 for receptionists and $3,500 for engineers, for example. Wages at state-run enterprises usually range from $50 a month to $200, although some are starting to pay more-competitive salaries.

Foreign firms also offer more opportunities to go abroad and to learn modern skills. Meanwhile, many of the former perks offered by state-run employers -- job security, shorter hours -- are fast disappearing as they, too, come under competitive pressures.

The number of labor disputes is rising, too. Last year, Chinese arbitration authorities heard some 226,000 cases involving more than 800,000 employees, up 23% and 31%, respectively, from 2002. Mary Gallagher, an assistant professor of political science at the University of Michigan, says that while foreign companies prefer to settle disputes internally, they also are seeing a rise in the number of cases.

But some workers are taking their multinational employers to court. Last fall, more than a dozen former managers at MSD China, a joint venture between Merck & Co. and a Chinese pharmaceuticals company, filed suit against the company alleging that they were fired over wrongful charges of misconduct. The firings took place around the time Merck was conducting global layoffs, and the Chinese employees believe the company fired them to avoid paying severance packages.

Alice Chin, MSD's head of external affairs, says the company terminated certain employees because "they violated the company's policies and procedures." She says several cases have been settled through arbitration, while others are pending in China's arbitration and court systems.

In April two Chinese workers sued Shanghai ADT Facilities Management Co. after they were fired for allegedly breaking company rules. A General Motors Corp. joint venture had hired workers from Shanghai ADT for low-skilled tasks, such as cleaning services. These employees worked at the GM site, but weren't given health benefits or a work contract, and paychecks were delayed, says Qiu Jie, a director of the Labor Law Aid Center at the East China University of Politics and Law in Shanghai, which advised the employees. The arbitration panel ordered Shanghai ADT to pay them back wages and erase the rule-breaking allegation.

Shanghai ADT, a joint venture between Knight Facilities Management Inc. of Saginaw, Michigan, and two Shanghai companies, including GM's passenger-car partner, Shanghai Automotive Industry Corp., declined to comment. Shanghai GM said it wasn't aware of the dispute. Shanghai GM said any such situation would mean it would "take immediate action to demand the supplier provide all the necessary information and labor contracts...to address the issue."

Some Chinese professionals also are getting riled over the often-huge differences in pay between local and expatriate staff. Under China's old centrally planned economy, workers were paid roughly the same. These days, pay scales are uneven, and working elbow-to-elbow with highly paid expats stokes resentment, says S. Prakash Sethi, a professor at the City University of New York's Baruch College who advises multinationals on codes of conduct. He says similar workplace frictions are playing out in other countries where skilled local professionals are in demand, such as India.

In this environment, some trade-union officials see an opening to expand their membership among white-collar workers in foreign companies, one-third of which are unionized. China's unions fall under the umbrella of the All-China Federation of Trade Unions, which traditionally has been closer to management than workers.

Some multinationals are trying to adjust their policies pre-emptively to meet the changing needs of their workers -- and of their own fast-growing operations in China. Merck, which has a female-heavy work force, says it has introduced flextime for working mothers and opportunities for managers to work in the U.S.

PricewaterhouseCoopers, whose annual revenue is growing more than 30%, is revving up hiring and becoming more selective about which projects it takes on. "With our China practice becoming more mature," says Johnny Chen, partner in charge of the firm's Beijing office, "we need to focus more on retaining the qualified accountants we have recruited and trained."

-- Kersten Zhang contributed to this article.

By James T. Areddy

From The Wall Street Journal Online

CHONGQING, China -- As one of Ford Motor Co.'s managers in China, 30-year-old John Larsen is exposing his family to a culture they couldn't imagine back home in a Michigan suburb.

But when his wife and kids -- ages 2, 4 and 6 -- moved here last September, they preferred to stay inside a 19th-floor Hilton hotel suite, where the family lived for nine months. The rarity of fair-complexioned, American children on the sidewalks of the gritty industrial city of Chongqing makes the Larsen family a crowd-stopping spectacle.

"It's not very fun and my kids hate it," says their mother, Laurel, 31. Over a bowl of her homemade vegetarian chili in the five-star Hilton, the Cincinnati-born woman added, "When we go home and close the door, we feel like we are back in America."

As corporate ambitions bore deeper into China, foreign companies are sending families to less-developed cities like Chongqing. Such places offer huge, untapped markets for companies. They also provide accelerated career opportunities to young executives eager to punch their ticket on the way to upper management. But the postings can feel like a detour into isolation and culture shock for some families.

Chongqing is a city of 32 million people, but Westerners are still rare here. The city is nearly 900 miles west of Shanghai, and about a decade behind it in terms of economic prosperity. So-called bang-bang men hang out on the streets, hungry to earn a few cents lugging stones, machinery or even garbage on their bamboo poles. Residents walk on sidewalks covered in cooking oil and spittle. Even the weather isn't a selling point: Fog trapped in by the surrounding mountains creates generally soupy skies, made worse by pollution.

American companies are drawn to cities like Chongqing because they are cheap; the average annual wage here is $1,500, about half of what it is in Shanghai. Merchandisers see markets for all kinds of products. In Chongqing, for example, car ownership is just 1.3 per 100 people, a fifth of the rate in Beijing.

A tall, confident man with wispy brown hair, Mr. Larsen sees many benefits to the move. He likes his job, developing marketing strategy for Ford. He's glad his children are seeing a different way of life. The private school that the older two kids attend provides an excellent education, he and his wife agree.

Still, the adjustment has been more challenging than they expected. "We thought we would be eating a lot of Chinese food and the kids would be learning Chinese quickly because they'd be immersed," says Mr. Larsen. So far, that hasn't happened.

A marble lobby dominated by a waterfall and piano bar makes the Hilton the swankiest address in this part of China. English is the first language and a concierge takes care of smoothing over any rough spots. A blue-lettered "WELCOME" mat marked the entrance to the Larsen's three-bedroom suite, converted from six guest rooms. It cost $4,300 a month, paid mostly by Ford. When the family needed to step outside, their driver, Jojo, waited in a black Ford Mondeo sedan, provided by the company.

Ford picks up most of the rent for its expatriate employees and encourages them to live in hotels because the conveniences help workers "remain focused on running the business," says Ron Tyack, a senior Ford executive in China.

Expat perks are being scaled back in cities such as Beijing, Shanghai, Guangzhou and especially Hong Kong, parts of China where rapid development has made it easier for foreigners to adjust. But perks remain a must to lure Americans and their families to cities like Chongqing.

Shanghai and Beijing each have a dozen international schools, many with hundreds of students. Chongqing has one international school, in a converted house, with 40 pupils ages 2 to 17. Ten hospitals in Beijing offer foreign-grade medical care. Chongqing has a single Western-style clinic, located in the Hilton, that rotates a different doctor through every few months. Even breathing is easier in Shanghai. Chongqing has 88 fewer days of good-quality air than Shanghai during the average year, according to Chinese government statistics.

Perhaps most shocking: The Starbucks chain, which boasts nearly 100 coffee shops between Beijing and Shanghai, doesn't have one in Chongqing.

In recent years, "the demographics of the expats have changed," says Joseph Verga, a 45-year-old financial controller for Ford, who lives in Chongqing. When he moved here two years ago, "there wasn't a baby" among his U.S. co-workers, he says.

Shortly after Mr. Verga and his 42-year-old wife Marybeth were dispatched to China, they trekked through Tibet. She filled their apartment with paintings from Vietnam and a clay warrior statue from Xian in western China. But after Ms. Verga became pregnant, she decided she didn't want to go to a Chinese hospital. So this spring, two months before her due date, she flew home to Detroit to give birth to her son in a U.S. hospital. "There's not one thing that's the same," about Chongqing and the U.S., she says.

Before Ford started making cars here in 2003, the city -- familiar overseas as "Chungking" -- hadn't seen so much foreign attention since serving as an allied supply post in World War II. Decaying hillside mansions are a reminder that Chongqing was a capital for the Nationalist government before the civil war that brought communists to power in 1949. Today Chongqing is the main jumping-off point for tourist cruises on the Yangtze River toward the famed Three Gorges Dam.

The government is eager to boost interest in places like Chongqing, which gets just 5% of the $8 billion of foreign direct investment that Shanghai takes in annually.

The first time either of the Larsens saw China was when Ford flew them to Chongqing last summer for a visit after his job offer. The couple, who have been married eight years, realized they would be in for a big change. But there was never really much debate whether he would take the job. Ms. Larsen jokes that she knew that in accepting his marriage proposal she was also agreeing to someday follow him to China.

Her husband caught the China bug after being assigned by the Mormon Church to do missionary work in Taiwan at age 19. While there, he learned to speak and read Chinese. Today he speaks Mandarin Chinese well enough to conduct business meetings. Before moving to China, Ms. Larsen's international experience consisted of living in London for 18 months and a vacation to Cancún, Mexico.

Like many foreigners in town, Ms. Larsen says she won't touch Chongqing's signature cuisine: "huoguo," or hot pot -- a fondue-like dish so loaded with fiery chilies that its aroma seems permanently suspended in Chongqing's air, along with diesel fumes. Supermarkets feature chicken feet jutting out of crushed ice and slabs of pork dangling from sharp hooks.

Neatly dressed in slacks, a black argyle V-neck and bright white blouse, Ms. Larsen shows off her solution to the food challenge: A closet full of cans, stacked to the ceiling, with labels like Green Giant, Crisco and Hormel -- items lugged to Chongqing in suitcases or mailed from overseas. Her birthday present in February was a silver, side-by-side U.S.-sized refrigerator-freezer.

Food is a bargain in Chongqing. Ms. Larsen spends only $50 to $100 a week on groceries, compared with $200 to $300 in Michigan. With the help of her small network of expat wives, she has found one store that has Oreo cookies and another that stocks Fruit Loops cereal and canned refried beans. The children see little in the markets that resembles the food they remember back home. Ms. Larsen says they don't give her much sass when she tells them: "here's what you're eating."

Recently, the Larsens faced an important new food complication. Four-year-old James was diagnosed with celiac disease during the family's summer visit back to the U.S. The boy now needs a diet free of gluten, which is found in wheat. In the U.S., Ms. Larsen prepared two cartons of special wheat-free foods to take back to Chongqing.

Entertainment in Chongqing is hard to find, the Larsens say. At a drive-through "safari park," the children looked through car windows and watched tigers devour live chickens tossed from a ranger's jeep. Enthusiasm about visiting pandas was marred, Ms. Larsen says, by seeing the zoo's grubby bathrooms. The Larsens attended a Chinese opera, featuring two actors with painted faces, one in a horse costume. Tickets cost only $2, but the family, unimpressed, left at intermission.

One pastime Ms. Larsen has designed for 2-year-old Eliza is spotting dogs near the Hilton hotel. A look down an alley found no animals one Tuesday. After an hour, the little girl had glimpsed two mutts. "He's going to his house," Eliza said as a scruffy brown dog jostled along a sidewalk crowded with scaffolding equipment.

Chinese men and women made way for the tot to amble down on the sidewalk. Nearly everyone reacted to the rare sight of a foreign child, pointing, giggling, staring and sometimes touching her. "Eliza's kind of like the monkey on show," her mother said.

Ms. Larsen and her daughter took a route back to the Hilton over a pedestrian bridge, where merchants sell sunglasses, combs and belts. One woman's habit is to thrust a mirror into the little girl's hand each time they pass, Ms. Larsen says. She says she feels obligated to buy it, even though she is tiring of the routine. At first, the woman asked only one yuan for a mirror, Ms. Larsen says, but now she charges eight yuan, about 99 cents, for each one.

As Ms. Larsen settled up, a middle-aged man bent down for a closer look at Eliza, while a bang-bang man leaned on his bamboo stick and watched. An elderly passerby gave Eliza's cheek a quick pinch. Everyone tried to be friendly, but Eliza, unsmiling, said nothing. She kept her head down, eyes fixed on the new mirror.

Foreigners are such a rarity in Chongqing that even Ms. Larsen gawks at times: "There's a Westerner we don't know," she says, on one drive through town. Only about 25 of Ford's 2,500 employees in Chongqing are foreigners. The Larsens say they know literally every expat family living here.

Ms. Larsen says she hasn't learned enough Chinese in her two hours of weekly lessons to make even basic points to the family baby sitter. She often calls her husband on the cellphone to seek translation help. Looking over the skyscrapers outside the hotel window, she says, "Real life is happening out there, and I'm not connected." Even so, she adds, "What would I do out there?"

Her offer to volunteer at an orphanage was turned down, she says. Her major diversion is teaching two Pilates-style exercise classes each week for expat women, plus dance classes for little girls. Instead of paying her, a few dollars are collected per class for a local school for the blind.

A centerpiece of expat social life is a Wednesday "ladies' lunch," where funds are raised for the blind school and news is swapped about which store has taco shells or sour cream. The women make visits to the fabric market, using calculators to bargain, then use gestures to show a tailor what they want made.

While she hasn't made friends with locals, Ms. Larsen says she values her new expat friends. They are people who simply wouldn't be in her orbit back home, she says, including a woman from Cuba and a woman closer to her mother's age.

From the Hilton, every morning a white van picked up the older two children, Emma and James, for the 20-minute drive to the place in China they enjoy most: school. Ms. Larsen prizes the 7-to-1 student-teacher ratio at the Yew Chung International School, which Ford covers at an annual cost of $13,000 per child.

National flags wrap along the ceiling of Yew Chung School. Children from a dozen countries sit shoulder-to-shoulder at little desks. Emma's class groups 5-, 6- and 7-year-olds. She studies Chinese each day and practices with her father at night. She is reading English above her U.S. grade level.

"I think I'm going to be a snob when I go home and walk into the public school," Ms. Larsen says. "They go a lot faster [here]."

With two years still to go on their assignment, the Larsens recently decided to move out of the Hilton and into a five-bedroom house in a new gated community designed for expatriates. Ford pays almost all of the rent. The couple say they want their kids to have a more "American" experience, in particular a yard to play in and the responsibility to clean it up. There's also a local pool and a playground in the area.

Mr. Larsen has recently needed to spend part of each week at Ford's new plant in Nanjing, several hours away by plane, near China's east coast. Ms. Larsen says his absences sharpen the isolation she feels in the new house, away from the helpful, English-speaking Hilton staff. But she says she accepts that her husband's new assignment is a sign of his value to Ford.

The Larsens credit life in Chongqing with deepening their family ties. "We have to be friends with each other," Mr. Larsen says. They have taken trips to Thailand and South Korea, and made plans to visit Bali and Hong Kong's new Disneyland. Ms. Larsen says she is also trying to get out of urban Chongqing more on weekends, going to places such as parks around the mountainous region.

But they are always aware how far they are from home. Mr. and Ms. Larsen returned from dinner one evening to a find a poem from their 6-year-old daughter Emma, complete with a child's misspellings, taped to their bed-stand. It read:

Amarica is my place!
I love Amarica.
It was fun.
It was so fun.
I miss it.
I miss my frieds.
I love Amarica.
Amarica was my place and it still is my place.

As chief executive of China's third-biggest online recruitment company, Liu Hao makes a living off the demand for talented people eager to prosper in the nation's dynamic economy.

Zhaopin.com Ltd. has 18 offices across the country and more than 1,000 employees. At any given time it typically posts 200,000 to 300,000 jobs, ranging from drivers to salespeople to senior executives. Mr. Liu says that is 10 times the number of offerings in 2002, when he took over Zhaopin, in which he was a major investor.

Both the company, whose name means "recruitment" in Chinese, and the industry are still small. Market-research firm iResearch estimates that China's online job-recruitment market was worth about 800 million yuan, or about $100 million, last year, and puts Zhaopin's 2005 revenue at 70 million yuan and its market share by registered users that year at 9.8%. Mr. Liu puts its market share by revenue at 20% to 25%.

But the industry is growing fast. And Zhaopin, which started up in 1994 and now counts such regular clients as the China units of Microsoft, Unilever, Alcatel, BMW and Hitachi, is growing with it. The online recruitment market was up 46% from 2004, iResearch reckons, and Mr. Liu says earnings, which he won't disclose, are, like his job postings, 10 times what they were in 2002. In April of last year, Monster.com, a major U.S. online recruitment company, spent $50 million to buy 40% of ChinaHR.com, one of Zhaopin's two larger rivals. (The other is 51job.com.)

Mr. Liu, 37 years old, takes pride in having propelled the company to its current position. His co-investors include the venture-capital arms of computer maker Lenovo Group and Taiwan's Acer Group. He says Zhaopin could go public, perhaps next year.

But Mr. Liu also takes pride in his own metamorphosis, from Beijing University physics major to Yale University law-school graduate and attorney at New York-based multinational law firm Davis Polk & Wardwell to California venture capitalist to entrepreneur, believing that in the end it's better to commit to one vision than to make a run at many projects.

Mr. Liu spoke from Beijing with Juying Qin in Hong Kong about that principle and about connecting China's leaders and workers with jobs in a fast-changing economy.

WSJ: How does Zhaopin.com mediate between prospective employer and job hunter?

Mr. Liu: We usually sign contracts with our clients or the employers. We check the veracity of the company as well as the job positions they want to post. Job hunters can put their own information into our database .

WSJ: Have you ever found your jobs online?

Mr. Liu: Well, no.

WSJ: What was your first job and what was the most important lesson you learned from it?

Mr. Liu: Practicing tax law. I was extremely impressed. The law firm is like a university or a learning machine, passing along knowledge to junior associate lawyers like me. Law students still tend to be less practical, especially Yale law students.

WSJ: Why did you turn from physics student to lawyer to venture capitalist and then to corporate executive?

Mr. Liu: Being a physicist was my childhood dream. But after a few years, I had a lot more discoveries about myself. I call this process rediscovery.

I went to law school not because I wanted to be a professional lawyer but because in law school, students could be exposed a lot more extensively to society. From a venture capitalist to the manager of this company was quite a natural choice for me. I was managing the company at the time as an investor, the company was not doing well, and I thought it was kind of an obligation for me to go in.

Most of my friends were against my choice, in part because they thought the risk was so high. Being a venture capitalist or being a lawyer is really kind of a cushy job. Lawyers do not really take that much risk. You do give advice to your clients, and you do have to make judgment calls, but those judgment calls do not eventually affect you.

To be a lawyer, you need to restrain your passion and be unemotional. To be a manager, you have to have some passion. If you don't have it, you can't do it.

Fundamentally I felt like were all kind of passive. In my life, I have always wanted to point to something that I really built.

WSJ: You didn't go to business school and had no real managing experience before. What made you so confident you could turn this company around?

Mr. Liu: I actually asked myself the same question when I took this position. But I think personality is the most important thing that leads to success. I was always able to manage the transitions well, from physicist to lawyer and then to venture capitalist, so I should be able to manage another transition well.

WSJ: In your industry, are there big differences between China and the rest of the world?

Mr. Liu: The American job market is more like a seller's market, while China, with a larger labor base, is more like a buyer's market. But the job market in China is nascent. Fundamentally, its problems reflect the problems stemming from the educational system.

Many fresh college graduates don't have the skills to cope with real work. They don't have enough career training. So it can be quite hard for them to find their niches in the first couple of years after graduation.

There are two main problems. First, some people, especially fresh college graduates, make fake résumés by exaggerating their experiences. Second, people change jobs very frequently.

WSJ: Can you describe China's leadership potential?

Mr. Liu: The quality of managers in China has been improving quite obviously in recent years, but there are still far fewer experienced managers than the market demands. Back in 2000 to 2002, people without much management experience could easily get around by carrying some master-of-business-administration degree from some big-name university like Harvard, although some were really not very capable.

WSJ: What is the most important piece of technology you use?

Mr. Liu: Basically I talk on the cellphone 24 hours a day. Sometimes people call me at 3 a.m., and they don't even ask whether I was asleep. If I didn't have a cellphone with me, I would start to worry about what I am missing. This really has become part of my body.

BEIJING (Reuters) - Houston Rockets center Yao Ming believes more of his Chinese team mates need to gain experience abroad for the national team to be competitive at the 2008 Beijing Olympics, state media reported on Tuesday.

China finished a disappointing 11th at the world championships in Japan after being knocked out 95-64 by eventual runners-up Greece last week.

Yao, who averaged a tournament-high 25.3 points and virtually carried China into the second round, told state TV that several of his team mates should join more competitive leagues overseas.

"As the 2008 Olympics are drawing near, we should send abroad the likes of Yi Jianlian and Wang Shipeng as soon as possible in a bid to raise our level in the short term," the 7ft 5in NBA All-Star center said.

"Even if our basketballers fail to play as regulars, we still could benefit at least from their training. I played as a substitute 10 minutes per game initially, too. It depends on your will and work."

Yao lamented his team mates' lack of strength and courage after China crashed out of the worlds, and remarked in media reports last week that Chinese basketball was too inward-looking.

But he conceded it was "impossible" for domestic clubs hungry for national success to send key players to foreign leagues, Xinhua news agency reported.

China's basketball officials, concerned that foreign careers might interrupt national duty, have also been reluctant to allow young talent to seek their fortunes in overseas leagues.

Yi Jianlian, touted as China's next Yao Ming and courted by several NBA clubs, declined to enter this year's NBA draft after China Basketball Association (CBA) Director Li Yuanwei voiced concerns about young Chinese players warming benches in the NBA.

Menk Bateer and Wang Zhizhi, the other two towers in China's NBA "Great Wall," were characterized by regular transfers and little game time.

His NBA aspirations clashed with China duties, leading to his sacking after failing to join the national team during the Asian Games in 2002. Wang returned to China earlier this year.

Wang and the rest of Yao's team mates will return to domestic league clubs for the kickoff of the CBA 2006/2007 season in October, before being called up for November's Asian Games.

Yao has been exempted from the Asian Games, Xinhua reported.

Source: CRI
09-14-2006 16:05

China needs to take action against the large number of poorly qualified and low quality professionals with university or college certification, Chinese Talents Society Vice President Wang Tongxun said.

China Youth Daily reports Wang Tongxun issued his warning at a forum on human resources development held recently in Beijing.

Record numbers of Chinese citizens have received higher education in recent years. Over 66.5 million people have college degrees or above and around 17% of high school graduates enrol at university. There were 2.8 million graduates in 2005, nearly 9 times the number of graduates in 1985.

But Wang Tongxun said that as universities and colleges grow from institutions that cater to an elite group of students to institutions that education the masses, several problems have been created.

Degrees and titles are easy to obtain in China. Some universities or colleges issue diplomas recklessly, even providing them to people who have not attended the university courses. The lack of a sound qualification system allows poorly skilled Chinese professionals to receive titles more easily than their foreign counterparts.

Wang Tongxun also said the academic research at Chinese universities and research institutes is often carried out in a poorly planned and impatient manner. The resulting papers are rarely cited by foreign researchers and rank below 120 in the world in terms of citations. As a result, most of the research has no value and can't be put into practice.

To compound the problem, the tendency for employers to value people according to their degrees rather than their talent and work experience has led to a culture of degree-hunting where people neglect to improve their talents in a measurable way.

Finally, Wang Tongxun said the phenomenon has led to a brain drain. Around 930,000 Chinese have traveled overseas to study since 1986, but only 230,000 have returned

Editor:Sun Luying

IBM, the world's biggest computer-services firm, said on Wednesday it could open four offices annually in second-tier Chinese cities in coming years to take advantage of robust growth and a deep talent pool.

Any expansion would come after IBM's Asia-Pacific office completed its move to Shanghai from Tokyo this year, attracted by vibrant growth and deep talent pools in China.

The move also brought the company closer to India, IBM's fastest growing market.

"We set up four new offices last year," Michael Cannon-Brookes, vice president for business development in China and India, told Reuters on Wednesday.

"And that pace is sustainable in the near term."

IBM, based in Armonk, N.Y., had 22 offices in China at the end of last year. It employs 43,000 staff in India, the center of the world's software services industry, and 7,300 in China, the world's manufacturing hub.

"That's why I'm in Shanghai," said Cannon-Brookes.

IBM's business in India grew 61 percent in the first quarter from a year earlier as telecoms, banking, insurance and services sectors bought computer hardware and services to spur expansion.

Its revenue in China rose 15 percent. The company did not give sales figures for individual countries, he said.

IBM, which derives about half its revenue from information technology consulting and outsourcing, has made India a global delivery hub for software needs and client services.

By: Steven Schwankert

Tao Sixuan sighed when asked about hiring people for her start-up, Beijing Rose Technology Ltd. "It took a lot longer than I expected, to say the least," she said, recounting difficulties finding staff to perform basic tasks such as Web design with hosting and back-end support.

"One girl wanted 5,000 renminbi (US$627) per month as a personal assistant--and I had to show her how to use the fax machine," said Tao, who passed on the interviewee. Someone at that level would normally receive a salary of about 2,000 renminbi per month.

Technology industry employers face a number of problems finding good workers in China, including the spoiled, "Little Emperor," attitude among young people in many parts of the country, a by-product of the government's one-child policy.

Raised as only children under China's population control policy, they are seen as spoiled, lacking any practical experience, and unwilling to endure even basic work-related discomforts such as long commutes or occasional overtime, executives say.

"The attitude is 'me, me, me, me... and now,'" said Cyrill Eltschinger, chief executive officer of Beijing-based Information Technology United Corp. (I.T. United), a software development outsourcing firm. Eltschinger referred to the attitude of many entry-level employees, who, unlike some of their Western counterparts, couldn't care less about non-salary benefits like retirement packages.

Other serious issues include a lack of skills and creativity, breaches of business ethics, and a dearth of understanding of how to function in a Western or other type of multi-cultural work environment.

Unlike their parents, who often spent their entire lives at a single employer, regular job changes in China's tech sector are common enough that spending even two years at one position or company can be seen as too long. Demand for workers is so high that employees regularly seek higher bidders for their services, one reason they change jobs frequently.

Finding workers with basic IT skills is not a big problem for companies in need, but asking them to do more can be difficult.

"If you need someone who understands and can use the software or hardware, that's no problem," said Tao. "But if you need them to do something with it on their own, something creative, that's entirely different."

Several employers interviewed for this article complained about workers who show up completely unprepared for interviews, who start off by asking questions about what the company does and what the job entails.

"Not so much now, but earlier we got applicants who never looked at our Web site, never Googled us, and came in without the slightest inkling of who we are or what we do," said Sam Flemming, chief executive officer of Shanghai-based CIC Data LLC, which monitors Internet-based public opinion via bulletin boards and blogs.

Business ethics have also become a major hiring concern, with everything from theft of intellectual property all the way up to more enterprising workers forming their own companies based around their employer's infrastructure.

One technology executive in Beijing, who spoke on condition of anonymity because of a pending legal investigation, told of an employee he just fired this week.

"He had a full-time employment contract with another company while working full-time for us," said the executive, adding that the man, "registered with our company using his Chinese ID card. He never told us he was a Canadian citizen."

For foreign companies, hiring workers in China can be particularly difficult due to language and cultural barriers.

Offshore companies often find plenty of talented IT workers in China but face difficulties finding such talented workers who also have excellent English or Japanese communication skills, Eltschinger said. While language skills are improving, hiring people who understand the needs of Western or foreign clients, what he called a "cultural market perspective," is still difficult, he said.

Eltschinger said retaining people is also a major challenge for small companies. Brand-name corporations carry greater prestige, and therefore give "face" to the people who work for them. As such, smaller firms have a tougher time holding onto employees for periods beyond two years, even with incentives such as advancement and training.

But being a foreign company with a big name can also work against an employer. When one candidate requested a salary four times more than his previous position, Eltschinger asked why he felt he deserved such an increase. "Because you're a foreign company. You should pay more," was the reply.

VANCOUVER - Canadian companies doing business in China are having trouble finding people - the right people - in the world's most populous country.

As multinational corporations race to set up shop in the economic powerhouse, China's supply of experienced, English-speaking workers is rapidly dwindling.

"There is intense competition for well-educated, English-speaking, professional staff who have experience working with multinational companies," said Diana Barkley, director of public affairs for Vancouver-based Methanex Corp.

Partly to avoid that problem, Methanex, the world's biggest methanol producer, decided not to establish its Asia-Pacific headquarters in mainland hot spots such as Beijing and Shanghai when it moved from New Zealand earlier this year.

The company maintains a small marketing office of three workers in Shanghai, but it chose, instead, to base its regional head office in the former British colony Hong Kong, where the pool of talent is wider. ''When we chose to relocate our Asia-Pacific logistics office that was, in fact, one of many criteria we looked at," Barkley said.

Despite a population of more than a billion, China is facing a critical talent shortage, according to a report released last month by the international employment services company Manpower Inc.

Managers and executives are in greatest demand, the report, titled The China Talent Paradox, stated.

Older managers arising from China's Cultural Revolution lack the education and training needed to work as senior managers for foreign-based companies, while recent university graduates lack management experience, it said.

Most Chinese employees also have low English-language skills, and those who do meet companies' standards for high-level positions tend to be difficult to retain, especially when they're presented with higher salaries, career advancement opportunities and benefits by competing firms.

Although Chinese students and workers recognize the need to learn English, the shortage of fluent English-speakers is "still a very big issue," said Vincent Wong, president of Richmond, B.C.-based ACT360 Solutions Ltd., which markets its language-skills testing software to universities and companies in China.

Most university graduates have good English reading and writing skills, he said, but their ability to speak the language is often poor.

"Even in some of our own dealings there, the English standard isn't as fluent as needed for high-level business discussions," Wong said.

With the exception of some of the "more progressive" multi-national companies in China, most business operations there don't provide internal corporate training, leaving it up to employees to learn English themselves, he said.

But, in light of the strong competition for talent, Wong said he expects more companies in China will start offering language training for their staff.

According to the Manpower report, the number of university graduates in China is expected to increase by 22 per cent in 2006 to 4.1 million, which will add to the pool of educated potential employees.

Even so, demand is outpacing supply, and the report estimated it will still take six to eight years before graduates gain sufficient work experience to ease the current competition for mid-level and senior managers.

In a survey of 141 companies, Manpower found two in every five are struggling to fill senior management positions in China.

Manpower's spokeswoman Britt Zarling said recruiting and retaining qualified staff can be even more of a problem for small and mid-sized businesses.

Nearly 75 per cent out of more than 300 Chinese job candidates surveyed by Manpower said they would prefer to work for a wholly owned foreign company rather than a joint-venture or domestic Chinese firm because they tend to offer higher wages, and better training and working conditions.

But with large multinational corporations clamoring for the best workers, the competition among smaller foreign companies is all the greater, Zarling said.

In the report, Manpower noted China's talent shortage deals a "quadruple blow" for many companies. They aren't able to quickly jump on growth opportunities because they can't recruit workers needed to expand their businesses; they face higher attrition rates as staff defect to other companies; they are forced to replace people that have significant knowledge about their products and services; and they are distracted from their core business while they train new employees to replace those leaving.

As well, higher labour costs boosted by the rising demand for trained professionals is squeezing companies' margins, the report added.

Still, Manpower said, foreign-based companies find it more beneficial to hire local Chinese employees, rather than bring in expatriate managers.

"Local managers have an advantage over their western counterparts when it comes to working with their local staff, given cultural considerations," Zarling wrote in an e-mail.

It's important for western companies to adapt to the local environment and adopt an insider's perspective, she said.

"For those hardest-to-fill positions, companies may bring in their foreign managers (expats) to run the business but sooner or later it is likely that they will be replaced by local people," she added.

And despite rising labour costs, foreign companies still find it more affordable to shell out for local staff than to bring in foreign workers, said Alison Winters, general manager of the Canada China Business Council's Vancouver office.

Winters said some sources have indicated that companies can, on average, hire five Chinese workers for the same amount of money required to hire a single North American worker.

"They know it's terribly expensive to hire expats and the expats don't want to stay that long," she added.

Winters said that many of council's member firms have been able to weather the talent shortage in China by building loyalty among their staff over time.

The fundamentals of attracting and retaining employees are the same in China as anywhere else, she said. Employers need to select people that fit well within their company, offer strong leadership, and provide opportunities to move up in the company, as well as bonuses or other incentives.

"It's not any different from any other country," she said.

PARIS (MarketWatch) -- Hubert Giraud of French IT and consulting company Capgemini (12533.FR) never thought hiring people in China, the world's most populous country, would be so difficult.

As multinationals like Capgemini flood the market looking for skilled workers, they are running up against unforeseen problems. Salaries among qualified workers are rising faster than expected, mid-level managers in their 40s are scarce, education standards are weak and many Chinese say they'd rather work for a local rather than Western company.

Strong competition for experienced employees, the cultural complexities of working in a Western company and the sense that the top positions will always be held by European or U.S. managers push many Chinese workers out of Western companies after only a few years.

"Eighty million people live in this province," Giraud says, referring to Guangdong in southern China, where Capgemini employs 500 people in its business outsource unit. "When you see that you think you can get anything you want. It's just not true."

In a nation of 1.3 billion only 5.2% of the population has a college degree and above, China's National Bureau of Statistics reported in March. By comparison, roughly 25% of the U.S. population of 298 million have college degrees.

Many multinationals, which spend heavily on training young Chinese graduates to compensate for the educational shortfalls, lose them to local companies after a few years because young Chinese perceive that opportunities for career development and promotion are greater.

In China as well as rapidly developing economies like India, it isn't unusual for Western companies to lead investment and import their own educational standards. What surprises some companies are the lengths to which they have to go to train young Chinese, as opposed to Indians who generally have workable English.

It's not uncommon, managers interviewed for this article say, for a company to lose a third of its workforce in a year. Heidrick and Struggles, a headhunting firm, said in a July study that "talented managers" in China change jobs every 15 months at present.

Heidrick says most companies are happy if they can limit turnover to no more than 15%, particularly in fast-growing industries like technology and telecommunications. Bob Krysiak, STMicroelectronic NV's (STM) president and general manager for Hong Kong, Taiwan and China, says attrition rates for the company's China operations range between 12% and 15%.

"China is like the Internet bubble in the U.S. - vibrant and bullish," says Vincent Gauthier, general manager for Hewitt Associates in Hong Kong. "If you are in your 30s, have English and skills you can walk right out of one job and into another without breaking a sweat. And people do."

The recent influx of college students to Chinese universities means it is easy to recruit 22-year-olds with no job experience. However, people with even a few years of experience are in deep demand.

The surge in employment opportunities has been driven by China's entry into the World Trade Organization in 2001, which led to a leap in investment in China. Last year foreign companies invested $60 billion in China from $38 billion in 2000, according to the China's National Bureau of Statistics.

China's Ministry of Commerce said in the first four months of 2006 roughly 12,000 new foreign companies began operations in China. Heidrick and Struggles notes that established companies in China, both local and foreign, are rapidly expanding their ranks. Of the companies polled by Heidrick, the number of those with staff of more than 5,000 tripled in the last two years from two to six.
Few companies are backing down from ambitious plans to carve out a corner for themselves in China's thriving marketplace, despite rising wages and intense competition. That is because most companies see the Chinese market itself as an important source of revenue. According to Heidrick and Struggles, two-thirds of respondents cite selling to China's 1.3 billion people as the key reason for being in China while setting up operations to outsource goods for the West is a secondary concern.

Both U.S. based and other foreign companies face intense competition for staff and rising salaries to increase their operations. Capgemini, which derives 1% of its revenue from China, is looking to triple its staff in China in the next four to five years to 2000-3000 employees.

STMicro, which draws a quarter of its sales from China, announced last spring it would invest $500 million in a new semiconductor factory. It plans to hire 2,500 across China during next few years.

Meanwhile, General Electric Co. (GE) said it is looking to maintain its annual 10% earnings growth in part by outsourcing to China. At present the company makes about $5 billion in revenue from China and recently Chairman Jeff Immelt said he expects that number to double in the next four to five years. GE employs 13,000 people in China.

The labor shortage, particularly among experienced workers, means companies routinely poach talent from each other, driving up salaries in the process. Hewitt Associates estimates that wages are rising as much as 15% a year for experienced, English-speaking workers, but anecdotal evidence puts the number much higher.

Stefan Dyckerhoff, head of Capgemini's consulting arm in China, hires first-year consultants for $5,000 a year but bumps their pay up to $35,000 by the third. By comparison the average rural salary in China is $225 annually and the average urban salary is $1,164 according to the China's National Bureau of Statistics. Dyckerhoff says salary inflation is outpacing what the company charges in consulting fees, though profit is still possible.

STMicro which employs 4,000 people in China, pays a relatively experienced engineer in Shanghai about $40,000 a year, about a third less than an engineer's salary in Silicon Valley, but not a pittance, the company says.
The problem says STMicro's Krysiak, is that raising salaries alone doesn't keep workers. Many are leaving for rising Chinese technology companies or even to become entrepreneurs.

"There is a lot of venture-capital money chasing Chinese enterprises," he says. "We lose people because some of these guys all want to be part of the next IPO."

Junwen Mo, a 22-year-old Chinese business student, has an internship at BNP Paribas SA (13110.FR) but says many Chinese want to work for a Chinese company in the long run. "For prestige and personal satisfaction it is better to work for a Chinese company," he said, adding that foreign companies might pay better salaries but they don't grant promotions. "If you are ambitious you have to work for a Chinese company after a few years of experience."

Losing people like Mo is painful for Western companies that have spent both time and money training them.

Although China produces 3.1 million college graduates a year, educational standards are lacking, U.S. consulting firm McKinsey & Co. (MCK.XX) says in a 2005 report. Even engineering students from the most prestigious universities in Beijing receive little practical training in either projects or working with a team. Few speak passable English. As a result McKinsey estimates that only 160,000 engineering graduates a year are suitable to work in multinationals - a pool no larger than the U.K.'s, who's population is about 60 million.

To compensate for the poor education system companies are investing in training programs to get new recruits up to speed which can add 15% to personnel costs, McKinsey says.

STMicro routinely trains new recruits for six months or more. Teaching English is the biggest problem but the basics of business - everything from marketing to how to say no to your boss - has to be taught.

Steven Shaw, head of Networks for Nokia China (NOK), spends a fifth of his time mentoring Chinese workers.

"We have English classes, technical training classes, lots of training." Shaw says. "It can be expensive, but it has to be done. It's one of the most important things to young Chinese. They want skills."

However, they also want to believe that they can reach the highest echelons of the companies. It's a message that Western companies are finally getting loud and clear, although finding Chinese managers to head operations is by far the most vexing personnel issue, several managers said.

"Graduate degrees were basically suspended in the late '60s and '70s," says Gauthier, referring to China's cultural revolution. "The 45-year-old manager who speaks English really isn't available."

Nevertheless companies are bending over backward to find Chinese-speaking managers, increasingly poaching talent from firms in Hong Kong, Taiwan or Malaysia.

Capgemini recently hired Chen Bo, the former vice-president of Hewlett-Packard China (HPQ), as chief executive officer of Capgemini China, despite the fact that he doesn't speak English. Chen works closely with a multilingual assistant.

Nokia, too, has boosted its Chinese representation. Shaw says on his management board two thirds are Chinese nationals.

Other companies are also taking notice. Heidrick and Struggles reported that three-quarters of firms operating in China today have native-born Chinese represented on their management teams, up from half two years ago.
"It's important for morale to have Chinese managers, either from China, Hong Kong or Taiwan, at the top," Shaw says. "It is not always the easiest thing to find them."

(Mimosa Spencer in Paris contributed to this article.)

In the three years since receiving his engineering degree in Shanghai, Jason Zhang has switched jobs twice and quintupled his salary as overseas companies scour China for professional workers.

"If you have language skills, if you have technical skills, it's very easy to find a job," says Zhang, 26, who speaks fluent English and now writes software for International Business Machines. "There are more jobs than even two years ago because of the outsourcing from Europe and the U.S."

Employers like General Electric, Freshfields Bruckhaus Deringer and Ernst & Young are struggling to find engineers, lawyers and accountants as Chinese universities fail to turn out qualified professionals, especially those who speak English. The shortage is threatening expansion plans and driving up salaries in the world's fastest-growing major economy.

"We could argue that more than water, energy and infrastructure, talent is the greatest constraint on China's growth," said Andrew Grant, who heads the greater China office of McKinsey, a consulting firm that advises two-thirds of the Fortune 1000 companies.

Fewer than 10 percent of Chinese job seekers are qualified for accounting, finance and engineering jobs at overseas companies, according to a November report by McKinsey that was based on interviews with more than 80 human resources officials. Most lack English skills and a "cultural fit," the report said.

Ernst & Young, which plans to expand its work force in China fivefold to 25,000 in the next decade, has turned down clients because it cannot hire enough accountants, said Anthony Wu, a senior adviser and former chairman of the firm's China office.

China lifted a one-year ban on share sales this year, and public companies are required to meet international accounting standards by next year, spurring demand for accountants.

The country has 69,000 licensed accountants and needs more than 300,000, said Chen Yugui, secretary general of the Chinese Institute of Certified Public Accountants. China did not have a university major in certified public accounting until 1994.

"The gap between the need and the supply is still huge," Chen said.

Other professions are suffering, too. Even though a third of China's university graduates receive engineering degrees, international companies cannot find enough engineers. Many graduates are not qualified because they are steeped in theory and have not learned to handle projects or work in a team, McKinsey said in its report.

Freshfields, a London-based law firm that has offices in 18 countries, is searching for qualified lawyers as it plans to add as many as 65 attorneys in China over the next five years, said Mary Wicks, human resources director for Freshfields in Asia. Freshfields is recruiting lawyers who are fluent in Mandarin and have international law degrees.

China has 120,000 lawyers, or one for every 10,800 people, compared with a ratio of one to 375 in England and Wales.

"Competition is tough," Wicks said.

Companies are increasing pay and benefits to attract talented workers. The average salary for accountants at firms such as Ernst & Young and Deloitte & Touche Tohmatsu rose 30 percent to $9,000 last year, according to a survey by Mercer Human Resource Consulting, based in New York.

Ernst & Young is offering more vacation time and flexible work schedules, said Catherine Yen, head of human resources for China.

In the first half of this year, average annual wages in urban China rose 14.3 percent from a year earlier to $1,160, the National Bureau of Statistics reported.

Many companies are responding to the shortage by expanding internship programs and sponsoring university training programs.

General Electric has forged relationships with 17 of China's 50 top universities, including Fudan University in Shanghai and Peking University, said Heather Wang, personnel director for GE in China. "China has a significant imbalance of supply and demand for talents," Wang said. "It's still tough to find people who are strong in technical expertise and bilingual."

The search for talent has led to rapid turnover. Manpower, one of the world's largest providers of temporary workers, said in June that 24 percent of the more than 300 employees it had surveyed in China planned to leave within the next year.

Ernst & Young, one of the biggest U.S. accounting firms, has watched its own clients lure away auditors.

"Everyone is striving very hard, so they poach," Wu, the former chairman, said. "Who better to pinch than the auditors working on your company?"

The loss of senior employees is especially costly in China because of the concept of "guanxi," or relationships based on mutual interests, said Victor Apps, Manulife Financial's general manager for Asia. Manulife, the biggest Canadian insurer, has 12 offices and 4,500 workers in China, and is preparing to open offices in the cities of Jiaxing and Jiangmen, as well as in Shandong province.

"Guanxi and relationships are very important to business," Apps said. Workers are the winners in this competition.

Zhang, who has been at IBM for a year, said that his first job at a software developer paid 2,000 yuan, or $251, a month. Within six months, Citibank hired him away for twice as much. Now he earns 10,000 yuan a month.

"For young people today, job security is really not a problem," Zhang said.

Individual Income Tax (IIT)
There has unfortunately been a lot of nonsense spoken about registering for individual income tax in China, how much to pay, being paid partially overseas, actually working here but consistently on tourist visas and so on that the real picture over registering for, assessing liabilities and the payment of IIT in China has become rather muddled. Ask one expatriate, then ask another, and they’ll give you different opinions. However unfortunately, China's tax regulations are not decided by expatriates. Neither is the situation short of clarity in the eyes of China's tax bureau, who are quite clear on the subject and who are progressively clamping down on abuse of non-working visas and the under-declaration of income by foreigners in China. In this article we outline the circumstances, liabilities and procedures for registering for Individual Income Tax (IIT), explain the rationale and hope to take some of the pain away from being a tax payer in the PRC. Assessment of IIT can be very complex. You should also do your homework well in advance to assess your personal tax situation with the related authorities and ensure you are in compliance — China's tax authorities are increasingly targeting expatriates who evade or only partially declare their IIT, with painful consequences for them and the international companies who employ them if tax is found to have been under declared.

Tracking Liabilities
Up until recently, China has been able to effectively track potential tax abuse only by inspecting foreigners’ passports and crosschecking with the tax bureau over whether or not registration had been completed. In practice such inter-government bureau co-operation never really transpired, with the Immigration and Tax bureau worlds apart. This has now changed and more information-sharing activities are taking place between different bureaus in the country. Entry/exit forms are computerized with the data compiled and made available to the tax bureau who now, at a glance, can ascertain visa types, length of stay, numbers of entries / exits and other information to assess whether IIT is applicable or not. This effectively means that the Chinese authorities can track properly movements of aliens through the country and retrieve data pertinent to tax assessments, as is routinely common in most Western nations. New regulations have also specified how to count the days in China and specifically the arrival date and departure date. These will all be counted as days effectively spent in China and are actively used for computation of IIT purposes.

Who Has to Pay?
China has a multi-tiered system of tax liabilities for foreigners, which has lead to some confusion, particularly over the so-called "90 or 183 days rule". We identify the more likely scenarios and the tax liabilities as follows:

Expatriates on extended business trips to China
If you are sent by your organization to China and your salary is paid off-shore (probably in your home country) and you spend more than 183 days in China in a calendar year, than you have to pay IIT in China based on the days you effectively spend in the country. This means that if you spend in China, let's say, 184 days within a calendar year, than you would have to pay taxes on all income sourced from China (meaning income related to your work performed in China).

Foreigners working for legal enterprises in China
Without going into too many complicated calculations and theories, if you hold positions such as the Chief Representative (CR) of a Representative Office (RO) or the General Manager of a Chinese Limited Company, Wholly Foreign Owned Enterprise or a Joint Venture anywhere in China, then you are subject to IIT from the first day you commence work in the country.

Interestingly, should you not actually visit China within a calendar year but are still acting as the Chief Representative of a Representative Office, then zero tax filings should still be made monthly to the local authorities.

According to the law you should declare the full salary for the position and pay IIT accordingly. In practice, however, it is common to see foreigners declaring an "arranged" fixed salary for their China position (with the rest being paid off-shore) and pay taxes accordingly, lowering to a great extent their full tax liability. This practice is illegal so be careful should you decide to pursue this route. While this has been common practice in the past, it also puts the employer out of compliance — fines of several million RMB have been levied just recently to FIE's engaged in such practices in China — and the risk of being caught — with the issue now highlighted at audit — is increasing.

Foreigners holding concurrent posts both in China and elsewhere.
Firstly, you should be arriving in China on a business visa, and are subject to IIT based on the number of physical days you are in China. This is assessed upon the total salary you are claiming from your local employment position and from the parent company overseas — the Chinese tax bureau may want to see proof of earnings from your parent (tax slip, payment voucher etc) to support your case. At the end of each month, your China office should take copies of your passport, together with the entry/exit stamps for that month, and file and pay for taxes based upon the number of days spent in the PRC. The tax bureau will issue a receipt showing this has been paid, this can be credited against the tax paid in your resident location (ie: you won't have to pay tax both in China and your resident location for the time spent in China).

China residency status and IIT on your worldwide income
Be aware that if you are regarded as tax resident by the Chinese government, which means you have stayed in China for more than 5 years (without residing outside the PRC for more than 90 days cumulatively each calendar year or 30 consecutive days always within a calendar year), you have to pay IIT on your worldwide income without limitation of source. This means that shall you have income elsewhere related to property rentals or interests, these shall also be declared to the Chinese tax authorities. The taxes paid overseas can be deducted from the taxes payable to the Chinese tax authorities. To be fair, we did ask the State Administration of Tax if they had ever collected such revenues, and the honest (and slightly bashful) answer was "No" — however why expose yourself to such a law without reason ? It's easy to avoid so count those days and give yourself a month out of China every 5 years.

Work Permits Registration Procedures
If you are based in China and working here, then you should apply for working visa, working permit and residence card.

Please be aware that constant checks in residential areas are conducted by the local Public Security Bureau and one of the first things you should do when you arrive and rent an apartment in the country is to get registered with the local Pai Chu Suo (local police responsible for your area).

Before you obtain all the documents mentioned above you should also go through a medical examination at the appointed local hospital. It should not take you more than a couple of hours to get through the exams with the results normally being issued the day after (or if you pay more on the same day!).

Your spouse and children (if any) would also have to register with the local authorities.

Tax Rates & Liabilities
The first RMB4,000 of your earnings in China are tax free. That does not mean you can rush out and declare salaries of RMB4,500! The tax bureaus are wise to this and will demand to see concrete proof of your earnings elsewhere. If you can't provide this they may refuse to register you, effectively immediately making your presence in China illegal.

China's IIT rates are high compared to neighbouring countries. The following table demonstrates salary brackets and tax rates, plus the quick tax deduction system. Your Total Liability can be calculated as follows:

Salary minus 4000 x Tax Rate, less Quick Deduction Figure = IIT Tax Bill
Monthly Taxable Salary-----Tax Rate-----Quick Calculation Deduction

From RMB500 to RMB20,000-----20%-----RMB375
RMB20,001-40,000-----25%-----RMB1,375
RMB40,001-64,000-----30%-----RMB3,375
RMB60,001-80,000-----35%-----RMB6,375
RMB80,001-100,000 -----40%-----RMB10,375M
In excess of RMB100,000-----45%-----RMB15,375

There are some implicit or explicit benchmarks at local tax bureaus on what a reasonable salary is in certain industries and this could vary with your position, your education background and the country you come from. Local authorities have the power to increase your declared salary. Should this be manifestly low or inadequate to your position, they shall assume and obtain the proved confirmation that you are deliberately reducing the figure to escape from a higher IIT threshold. This can be enormously damaging for you and your employer who would be placed under far greater tax scrutiny in the future for potential tax evasion issues within the business.

Deductible Allowances
China is also pretty reasonable as regards non-taxable elements as part of an expat package, however some attention may need to be paid to the structuring of the inclusive package with certain items needing to be properly defined in the employment contract.

As a rule of thumb, if you pay for the expenses yourself (against local official invoices) and the company provides you cash allowances, then these are considered taxable. However, if the company pays for certain expenses on your behalf (for ex. Your apartment rental), then this kind of allowance is not taxable and can be deducted from your company FEIT computation basis.

Benefit Taxable as Part of Overall Package?
Hardship Allowance - Yes
Housing at Cost - No
Fixed Housing Allowance - Yes
Free Use of Vehicle - No
Fixed Expenses Paid in Cash - Yes
Reasonable Expense Reimbursed - No
Reasonable Home Leave Allowance - No
Reasonable Education for Dependents - No

Enterprises are obligated to withhold employees' IIT when paying salaries to them; failing to do so will cause penalties. Meanwhile, the enterprises can get 2% of the IIT withheld from the tax bureau as commission. Pay attention to the calculation of the IIT if the companies are paying IIT for the employees, in this case the income has to be grossed up for the purpose of calculating IIT.

Individual Income Tax calculations for standard salaries are fairly easy to assess, but get more intricate according to the complexity of the expatriate's salary package. It makes sense to take professional advice when structuring expatriate salary packages to ensure liabilities can be planned, and catered for in the most tax-efficient manner.

Non-Compliance Penalties
No Government likes tax evasion and China is no exception to the rule. The penalties for late payments, non-payment and other transgressions (naivety is no excuse) can be severe — often up to five times the amount due, plus the original liability. In cases of blatant evasion, businesses can have their licenses withdrawn and assets seized. If you have any doubts, please seek professional advise immediately — this is the one area it is best not to mess about with, fees spent on decent advise are less than the amounts levied in fines and penalties!

Though China has a vast workforce, the country is facing a severe shortage of skilled labor. " [The shortage] is across the board,"says Stella Hou of Hewitt Associates, a human-resources consultancy. "[International] companies have a hard time recruiting ideal candidates to run their operations in China. The local workforce mainly lacks management skills, leadership, creativity, autonomy or risk-taking, marketing and research."

Developing economies often encounter talent shortages as they take off, and China is no exception. Private business has flourished only during the past 15 years and most professionals are still at a junior level. Since most enterprises were previously State-owned and operated within a centralized economy, a sense of "corporate spirit"and "business initiative"has yet to take hold in the domestic workforce. Concepts, such as branding, project management and other skills involving international standards of corporate operations still need to be learned. "After more than a decade under State-owned enterprises, Chinese businesses lack the mindset to adopt Western working practices,"says Larry Wang of Wang Li & Asia Resources, a recruitment company based in Beijing.

However, economic growth is pushing most companies to develop higher work standards. It has also pushed them to expand domestic operations, and thus to increase their demand for employees with strong leadership and management skills. As a result, China is currently demanding a bigger talent pool that it can supply. Chinese professionals with experience working at the international level are highly sought after, and rare. Unable to find domestic workers with these qualifications, companies have thus continued to lean on experienced and skilled expatriates for management of regional operations. In fact, the dearth of a skilled domestic workforce threatens the competitiveness of companies in China, since the need to rely on skilled foreign (and therefore expensive) labor has increased operating costs.

Expatriate Demand
Multinationals have always relied heavily on expatriate executives to head their departments and organize business expansion. Foreign firms choose expatriates from their company headquarters because they represent a bridge from corporate office to the local market. "I was chosen because I already have the experience in expanding businesses overseas and can quickly adapt to diversity,"says Sheila Lester-Smith. former vice-president of Motorola for the Asian Region. Analysis by Hewitt on expatriate annual salaries for 2004 indicates that salaries are high and packages attractive. A country-level managing director receives US$250,000 to US$300,000 per year, while top executives can expect US$500,000 or more. "The salary is completed with bonus and compensation such as free housing and schooling for the children and company,"says Stella Hou.

According to Hewitt, the number of expatriates in China is rising and includes both Western foreigners and, increasingly, Asians from neighboring countries. "It is getting difficult to define what 'expatriate' actually means, since there are so many different kinds in China. We do not have a one-size-fits-all type,"says Hou. The Asia-Pacific region expatriate population represents fully 55.6 percent of China's external recruitment channel. "There is a continuous transfer of Asia-Pacific headquarters to China. China is a growth in the multinational radar screen and companies are sending their employees there to ensure the development of their firms,"adds Hou.

Chinese returning from study overseas are filling up some of the shortages at the most senior levels. Confident in getting more rapid career advancement in China than in the Western countries where they studied or worked, returnees are also attracted by China's fast business growth and improvement of quality of life. In 2004, the number of foreigners (from multinationals' home countries) sent by their companies to China fell to 41.7 percent (from 52.9 percent in 2003). Conversely, the number of Asia-Pacific workers (Hong Kong, Taiwan and Singapore) and Chinese returnees continues to increase. "The Asia-Pacific workforce is more sensitive to Chinese culture, can often speak Chinese and English and is seen as 'quasi-international' by most employers,"says Larry Wang. "Their package is comfortable compared to the one they can have in their home countries and most importantly they can develop or sustain their career in the mainland."

Recruiting, retaining and localizing
Human resource issues have become high priority concerns for companies in China. Recruitment, retention and localization of staff represent their top priorities. Georges Desvaux, director of China for McKinsey, says the key point is that the critical skills that are missing in many firms are not so much top management, where one can find highly qualified locals, but more often highly specialized functional skills at middle and supervisory levels where experience in organizations that have long-standing systematic processes is critical. Strong multinationals that want to operate at global performance levels hire expatriates for these jobs, and slowly build a cadre of skilled locals.

But most firms realize that they cannot replace their expatriate staff for local employees as quickly as they have planned. They are therefore customizing their expatriate packages and creating hybrid packages to attract skilled employees into their companies. "Most multinationals keep their expatriates and manage the process based on better selection, preparation, and mentoring of local successors,"says Hewitt. The agency indicates that 36.9 percent of companies in China have current formal localization plans and 61.3 percent plan to or are making a transition over one to three years. Since many firms are investing in training staff in leadership, management and talent development, the local skill base is rising quickly. More than 69.7 percent of companies in China have development programs to build local successors for expatriates.
But while expatriate compensation is shrinking as the workforce diversifies, the number of expatriates will continue to grow. Most firms can now find more foreign talent choices in the local market and will continue this recruitment strategy. Multinationals are also competing for talent with China's domestic companies, which need to improve the quality of their people as their markets open to foreign rivals. Despite this demand, however, Western expatriates are still reluctant to work for local companies.”

Local companies have now started to offer decent packages for expatriate employees that can include an annual salary of US$80,000 to US$120,000 for manager and top executive levels. However, only a few local companies have successfully hired and kept expatriates in their firms. "I am extremely skeptical about local companies hiring foreign expatriates”, says Larry Wang. "Most of these companies are used to being in a more centralized economy and are uneasy about giving up control."

Despite the high cost, foreign firms hope to keep their expatriates until the "localization"of their staff is completed. But some firms have difficulty retaining them within their companies after termination of their assignments. "I quit my job as the Motorola vice-resident because it was the end of my term in China and I preferred to stay in China and look for opportunities over the next few years,"says Sheila Lester Smith.

China's shortage of talent has indeed given a bright future to expatriates but "they have to love the people and the country first to enjoy their work here,"says Stella Hou.

By Kelly Proctor and Tina Qiu Bloomberg News

Published: August 16, 2006, Shanghai

In the three years since receiving his engineering degree in Shanghai, Jason Zhang has switched jobs twice and quintupled his salary as overseas companies scour China for professional workers.

"If you have language skills, if you have technical skills, it's very easy to find a job," says Zhang, 26, who speaks fluent English and now writes software for International Business Machines. "There are more jobs than even two years ago because of the outsourcing from Europe and the U.S."

However, Zhang is an anomaly in China and his successful job moves illustrate the large demand in China for qualified workers.

Employers like General Electric, Freshfields Bruckhaus Deringer and Ernst & Young are struggling to find engineers, lawyers and accountants as Chinese universities fail to turn out qualified professionals, especially those who speak English.

The shortage is threatening expansion plans and driving up salaries in China, the world's fastest-growing major economy.

"We could argue that more than water, energy and infrastructure, talent is the greatest constraint on China's growth," said Andrew Grant, who heads the greater China office of McKinsey, a consulting firm that advises two-thirds of the Fortune 1000 companies.

Fewer than 10 percent of Chinese job-seekers are qualified for accounting, finance and engineering jobs at overseas companies, according to a November report by McKinsey that was based on interviews with more than 80 human resources executives. Most lack English skills and a "cultural fit," the report said.

Ernst & Young, which plans to expand its work force in China fivefold, to 25,000, in the next decade, has turned down clients because it cannot hire enough accountants, said Anthony Wu, a senior adviser and former chairman of the Ernst & Young office in China.

The need for people qualified to work in the financial field shows no sign of decreasing. China recently lifted a one-year ban on share sales, and public companies are required to meet international accounting standards by next year, spurring demand for accountants.

The country has 69,000 licensed accountants and needs more than 300,000, said Chen Yugui, secretary general of the Chinese Institute of Certified Public Accountants. China did not have a university major in certified public accounting until 1994.

"The gap between the need and the supply is still huge," Chen said.

Other professions are suffering, too. Even though a third of China's university graduates receive engineering degrees, international companies cannot find enough engineers. Many graduates are not qualified because they are steeped in theory and have not learned to handle projects or work in a team, McKinsey wrote in its report.

Freshfields, a law firm based in London that has offices in 18 countries, is searching for qualified lawyers as part of an expansion that will add as many as 65 attorneys in China during the next five years, said Mary Wicks, human resources director for Freshfields in Asia. Freshfields is recruiting lawyers who are fluent in Mandarin and have international law degrees.

China has 120,000 lawyers, or one for every 10,800 people, compared with a ratio of one to 375 in England and Wales. "Competition is tough," Wicks said.

Companies are increasing pay and benefits to attract talented workers. The average salary in China for accountants at firms like Ernst & Young and Deloitte & Touche Tohmatsu rose 30 percent to $9,000 last year, according to a survey by Mercer Human Resource Consulting, based in New York.

Ernst & Young is offering more vacation time and flexible work schedules, said Catherine Yen, the firm's head of human resources for China. In the first half of this year, average annual wages in urban China rose to $1,160, or 14.3 percent, from a year earlier, China's National Bureau of Statistics reported.

SHANGHAI In the three years since receiving his engineering degree in Shanghai, Jason Zhang has switched jobs twice and quintupled his salary as overseas companies scour China for professional workers.

"If you have language skills, if you have technical skills, it's very easy to find a job," says Zhang, 26, who speaks fluent English and now writes software for International Business Machines. "There are more jobs than even two years ago because of the outsourcing from Europe and the U.S."

However, Zhang is an anomaly in China and his successful job moves illustrate the large demand in China for qualified workers.

Employers like General Electric, Freshfields Bruckhaus Deringer and Ernst & Young are struggling to find engineers, lawyers and accountants as Chinese universities fail to turn out qualified professionals, especially those who speak English.

The shortage is threatening expansion plans and driving up salaries in China, the world's fastest-growing major economy.

"We could argue that more than water, energy and infrastructure, talent is the greatest constraint on China's growth," said Andrew Grant, who heads the greater China office of McKinsey, a consulting firm that advises two-thirds of the Fortune 1000 companies.

Fewer than 10 percent of Chinese job-seekers are qualified for accounting, finance and engineering jobs at overseas companies, according to a November report by McKinsey that was based on interviews with more than 80 human resources executives. Most lack English skills and a "cultural fit," the report said.

Ernst & Young, which plans to expand its work force in China fivefold, to 25,000, in the next decade, has turned down clients because it cannot hire enough accountants, said Anthony Wu, a senior adviser and former chairman of the Ernst & Young office in China.

The need for people qualified to work in the financial field shows no sign of decreasing. China recently lifted a one-year ban on share sales, and public companies are required to meet international accounting standards by next year, spurring demand for accountants.

The country has 69,000 licensed accountants and needs more than 300,000, said Chen Yugui, secretary general of the Chinese Institute of Certified Public Accountants. China did not have a university major in certified public accounting until 1994.

"The gap between the need and the supply is still huge," Chen said.

Other professions are suffering, too. Even though a third of China's university graduates receive engineering degrees, international companies cannot find enough engineers. Many graduates are not qualified because they are steeped in theory and have not learned to handle projects or work in a team, McKinsey wrote in its report.

Freshfields, a law firm based in London that has offices in 18 countries, is searching for qualified lawyers as part of an expansion that will add as many as 65 attorneys in China during the next five years, said Mary Wicks, human resources director for Freshfields in Asia. Freshfields is recruiting lawyers who are fluent in Mandarin and have international law degrees.

China has 120,000 lawyers, or one for every 10,800 people, compared with a ratio of one to 375 in England and Wales. "Competition is tough," Wicks said.

Companies are increasing pay and benefits to attract talented workers. The average salary in China for accountants at firms like Ernst & Young and Deloitte & Touche Tohmatsu rose 30 percent to $9,000 last year, according to a survey by Mercer Human Resource Consulting, based in New York.

Ernst & Young is offering more vacation time and flexible work schedules, said Catherine Yen, the firm's head of human resources for China. In the first half of this year, average annual wages in urban China rose to $1,160, or 14.3 percent, from a year earlier, China's National Bureau of Statistics reported.

SHANGHAI In the three years since receiving his engineering degree in Shanghai, Jason Zhang has switched jobs twice and quintupled his salary as overseas companies scour China for professional workers.

"If you have language skills, if you have technical skills, it's very easy to find a job," says Zhang, 26, who speaks fluent English and now writes software for International Business Machines. "There are more jobs than even two years ago because of the outsourcing from Europe and the U.S."

However, Zhang is an anomaly in China and his successful job moves illustrate the large demand in China for qualified workers.

Employers like General Electric, Freshfields Bruckhaus Deringer and Ernst & Young are struggling to find engineers, lawyers and accountants as Chinese universities fail to turn out qualified professionals, especially those who speak English.

The shortage is threatening expansion plans and driving up salaries in China, the world's fastest-growing major economy.

"We could argue that more than water, energy and infrastructure, talent is the greatest constraint on China's growth," said Andrew Grant, who heads the greater China office of McKinsey, a consulting firm that advises two-thirds of the Fortune 1000 companies.

Fewer than 10 percent of Chinese job-seekers are qualified for accounting, finance and engineering jobs at overseas companies, according to a November report by McKinsey that was based on interviews with more than 80 human resources executives. Most lack English skills and a "cultural fit," the report said.

Ernst & Young, which plans to expand its work force in China fivefold, to 25,000, in the next decade, has turned down clients because it cannot hire