Recruiting in China

The mainland and Taiwan adopted 19 joint proposals at the Ninth Cross-Straits Economic, Trade and Culture Forum, one of which encourages the island to cooperate with the new Shanghai Free Trade Zone.

The proposal, announced by John Chiang, vice-chairman of the Kuomintang, calls for cooperation between a pilot free economic area in Taiwan and the Shanghai Free Trade Zone as well as with three other pilot economic areas in eastern Fujian and Jiangsu provinces.

The free economic zones established by the two sides should cooperate and learn from each other to achieve common development, according to the proposal.

The Shanghai Free Trade Zone, which began operating in late September, is a 28.78-square-kilometer district billed as a test site for deepening market-oriented reforms.

Wu Poh-hsiung, KMT honorary chairman, said during his speech at the closing ceremony on Sunday he was delighted that both Taiwan and Shanghai have planned or established free trade zones and pilot free economic areas.

"We anticipate that the mainland and Taiwan will also consider cooperation opportunities in this field to give us more power to create a prosperous future," he said.

The forum, a key platform for communication between the mainland and Taiwan, ended on Sunday in Nanning, Guangxi Zhuang autonomous region.

With closer cross-Straits economic cooperation, the two sides should explore ways to keep pace with the Asia-Pacific region's economic integration, participants at the forum said.

The 19 proposals, which also cover cross-Straits cooperation in technology, finance, agriculture, education and tourism, are important and achievable, said Zhang Zhijun, the mainland's Taiwan affairs chief. The proposals reflect an urgency from both sides of the Taiwan Straits to stay competitive within international economic and scientific fields. The proposals will also provide a useful reference point for policymakers, said Zhang, head of the State Council Taiwan Affairs Office.

Zhang said both sides should seize opportunities to cooperate in order to increase advantages in global economic, scientific and technological competition.

"I truly hope relevant authorities from both sides turn these proposals into feasible policies and measures," Yu Zhengsheng, chairman of the National Committee of the Chinese People's Political Consultative Conference, said at Sunday's closing ceremony.

Yu urged both sides to overcome difficulties and seek opportunities to promote the peaceful development of cross-Straits ties and realize China's rejuvenation through cooperation.

Sun Zhaolin, deputy head of the Department of Taiwan, Hong Kong and Macao Affairs under the Ministry of Commerce, said it's advisable for the mainland and Taiwan to first reach a consensus on cooperation within the free trade zones before discussing details of cooperation.

In the proposals, participants urged both sides to expand financial cooperation by further opening their financial markets, jointly maintain stability in markets and build financial institutions on both sides to enhance exchanges. Participants also called on the two sides to promote cooperation in such sectors as culture, film, publishing, education, agriculture, medicine, as well as tourism and youth exchanges.

Active, growing financial markets and innovations in the sector are making Shanghai more prosperous as a financial hub for the world's second-largest economy, a report released on Monday suggests.

The 2013 H1 Shanghai Financial Prosperity Index, released by Roland Berger Strategy Consultants and the Shanghai Financial Association, shows that the city's financial industry is in good shape to grow.

The analysis covers six dimensions of the industry: markets, institutions, internationalization, innovation, talent and environment.

"Financial markets in Shanghai maintained relatively fast development in the first half of 2013 with a booming fund market, gold market and insurance market.

"The financial innovation index also surged, with more financial products designed and the Free Trade Zone approved by the State Council," said Lian Ping, an executive member of the Experts Committee of the Shanghai Financial Association and chief economist of the Bank of Communications Ltd.

Shanghai's financial industry "has become more stable since 2010, and the growth rate of this sector slightly improved in the first half of 2013", the report said.

The report said that Shanghai achieved more progress than other financial centers, including Hong Kong, Singapore, Mumbai, New York, London and Seoul, in the past six years in terms of the "development index".

The index incorporates indicators of financial markets and the development of the financial environment.

"It is not a comparison of absolute value," said David Ye, partner and vice-president of Roland Berger, lead author of the report.

"It is meant to compare how the financial industry is evolving and progressing in these markets. Shanghai achieved more in the past six years, but Singapore, Hong Kong and Mumbai showed a stronger growth trend in the first half of 2013," he added.

The Shanghai Financial Association and Shanghai United Assets and Equity Exchange also released their Shanghai Merger and Acquisition Index report on Monday.

That report said that during the first half of 2013, there was marked growth of merger and acquisition transactions in primary industry.

Private companies were more active in this market than State-owned ones. Outbound M&A cases surged in May and June, and the quality of the deals improved.

Patrick Becker, chief executive officer of Bexuco Ltd, an M&A project consulting and service company based in Shanghai, said that although Chinese companies have become more willing to pursue outbound cases, they still lack the experience and management skills to handle and execute an overseas investment.

This can lead to strategic mistakes, inappropriate deal structures and overpaying for the target firm, he said.

"But I see a substantial improvement in the past 12 months. Chinese companies are more and more willing to engage foreign M&A advisers acting in their interest," he said.

Nearly 80 percent of the 3,700 doctors surveyed by the Chinese Medical Doctor Association said they don't want their children to work in medicine. Many of the doctors surveyed cited the growing tension between patients and doctors as well as the escalating violence in hospitals across the country in recent years.

In 2009, 62.5 percent of the 3,200 doctors the associated surveyed expressed the same opinion, according to the Chinese Medical Doctor Association.

"We conducted similar surveys around the country in 2002, 2004, 2009 and 2011, and we found that the proportion of doctors who want to see their children become doctors keeps dropping," said Deng Liqiang, an official from the association.

An overwhelming majority of doctors also said that their salary didn't match how much work they put into their jobs, and that tense doctor-patient relationships and enormous amounts of pressure at work are creating a negative attitude toward their jobs.

"The survey results showed that doctors are not positive," Deng said.

A survey conducted by one of China's most popular medical websites, Dingxiangyuan, or dxy.cn, showed that many doctors are not in good health, with more than a quarter of those surveyed are at high risk for cardiovascular diseases. The incidence of hypertension among male doctors older than 35 is two times the normal rate.

The Heilongjiang Provincial Longmei Domestic Service League was founded in Harbin, capital city of northeast China's Heilongjiang Province, on October 23, 2013, to boost the province's domestic service industry.

The launch ceremony was attended by more than 50 members from domestic service agencies under the Heilongjiang Women's Federation.

Attendees discussed the league's development plans for the next three years as well as the industry's development trends, national policies and local regulations and standards.

Women's federations of all levels in Heilongjiang Province have achieved great progress in promoting the industry. There are now 57 domestic service agencies in the province and several brands have been launched.

There are about 20 million domestic workers and 600,000 domestic service agencies in China. As average income increases, the demand for domestic help continues to increase. Forty percent of urban Chinese families have a need for domestic help, indicating an additional 15 million potential job opportunities.

Approximately 90 percent of domestic workers in China are female, and ages range from 16 to 48 with the majority being 30 to 40 years old. These workers are primarily less-educated rural migrants and urban
laid-off workers.

Several government agencies share the responsibility of overseeing, regulating, and enforcing aspects of domestic work. The Ministry of Human Resources and Social Security (MOHRSS) is responsible for issuing policies, laws and regulations related to labor relations, employment, and vocational training. The Ministry of Commerce (MOFCOM) is in charge of monitoring domestic service associations at different administrative levels. The State Administration for Industry and Commerce (SAIC) issues business licenses and monitors market activity.

Domestic workers are more likely than workers in other sectors to use formal recruitment services. These services often include training, and are available from labor bureaus, and the All-China Women's Federation (ACWF). The ACWF runs 465 domestic service agencies in 16 provinces and cities, and cooperates with labor bureaus at different levels to provide vocational training and issue certificates to trained domestic workers.

Anyone who has followed China’s business billionaire lists in recent years will probably have noticed an encouraging trend: self-made entrepreneurs are climbing the charts. Six out of the ten billionaires topping this year’s list are genuine entrepreneurs.

There is, for instance, Baidu ’s (NASDAQ:BIDU) founder Robin Li, Tencent’s founder Ma Huateng, and Alibaba’s founder Jack Ma. They all developed true enterprises that parallel those developed by American, European, and Japanese entrepreneurs—they began with consumers and their needs, and came up with innovative products and services to accommodate them, amassing wealth in the process.

Baidu’s CEO Robin Li, number 3 in this year’s list, is a case in point. He made his billions by building a pioneering company in China’s brutal Internet market, where most companies fail to monetize their business model. Baidu’s revenues have been growing by leaps and bounds; reaching $4.17B in 2013, up from $515 million in 2008. Most notably, revenues come from several sources: Internet search, video stream (iQiyi),on-line travel services, on-line recruitment, and on-line payment systems (BaiduPai).

Baidu’s Financials

Forward PE Operating Margins (%) Qtrly Revenue Growth (%) Qtrly Earnings growth (%) Total Revenues Debt Cash
24.66 43.11 38.60 -4.50 4.17B 1.88B 5.43B
The rise of self-made billionaire entrepreneurs who build true enterprises which serve the interests of consumers is a significant departure from the old days, when entrepreneurs were government-made entrepreneurs who build “units” that served the interests of bureaucrats rather than the interests of consumers. This is true for three reasons.

First, it is a sign that China is making good progress in allocating its resources better, having entrepreneurs rather than government bureaucrats make important economic decisions. Second, it is a sign that Chinese corporations are making progress in moving from imitation to innovation, to catch up with their overseas counterparts.

Third, it is a sign that the government is loosening up its grip on the economy, releasing the ingenuity and creativity of the Chinese people.

To be fair, the government may be loosening its grip on the economy, but it continues to be on the driver’s seat, as guanxi –connections with government bureaucrats — continue to be a determining factor in who will get in what business, and for how long.

Nonetheless, this cruel reality doesn’t undermine the success of the self-made entrepreneurs – rather, it supports and re-enforces that success.

Hopefully, this trend will continue in the future.

The world's largest coffee chain, Starbucks, has come under fire in China for reportedly charging locals higher prices than in other markets, including the United States.

China Central Television (CCTV) analysts compared the price of a Starbucks Grande Latte (16 ounces) in four major cities around the world. Beijing came out as the most expensive at 27 yuan ($4.43), followed by London at 24.25 yuan, 19.98 yuan in Chicago and 14.6 yuan in Mumbai, India.

The CCTV report also pointed out that mugs sold in Starbucks in China are more expensive than in the US, even though they are made in China.

Starbucks responded to the report and said that the price gap between its drinks in China and the US is a result of different costs in the two markets and not because of unreasonable price settings.

Starbucks has more than 1,000 stores in the Chinese mainland and it keeps expanding rapidly. China is set to overtake Canada as its second-biggest market next year.

The issue became one of the most popular talking topics on Sina Weibo.

What do Shanghai expats think about the city's coffee prices and the prices of other foreign products in the city?

Robin Poulet, from France, designer

"We all know that Starbucks coffee is overpriced, and not only in China. The problem here is the unfairness. I don't think it is fair that Chinese customers need to pay more for their coffee when their average salaries are much lower.

It is interesting though that the Chinese customers don't seem to mind the prices; most of the Starbucks' shops I have been to in Shanghai are always full of local customers. Starbucks coffee has become something of a trend, a fashion statement, a sign of luxury for many fashion conscious Chinese while I know that many of my expat friends in Shanghai refuse to pay the higher prices here.

I splurge sometimes on a nice cup of coffee, not necessarily from Starbucks, and on other foreign products here, although I know they are much more expensive than they should be."

Laura Grossman, from the UK, manager

"Coffee in Shanghai, not only from Starbucks, is very expensive bearing in mind the average salary in China. It is pretty outrageous that Chinese customers have to pay extra for a cup of coffee considering that pretty much everything else, rent, cost of living, labor, is much cheaper in China comparing with other markets like the UK.

What surprises me is that Chinese are still willing to pay that much for their coffee. The majority of Starbucks' customers in Shanghai, Beijing, or any other Chinese big cities are locals. Considering the fact that China doesn't really have a coffee culture, this really dazzles me every time I walk into a local Starbucks.

As for me, I often pay that little bit extra to get a good quality coffee, be it in Starbucks or any other foreign coffee shop in the city. I have got used to the fact that almost any foreign product in Shanghai is way overpriced."

Grace Hamilton, from Canada, events planner

"This is not groundbreaking news for most of us. I'm aware, as are other Shanghai expats, that foreign products, including coffee, alcohol, food, clothes, shoes, or makeup, are more expensive in China than they are back home. I usually prefer to shop in local supermarkets, buy my veggies from a local wet market and eat out in local restaurants, as I know that everything that's foreign in Shanghai is usually overpriced. I would also prefer to sit in a nice small independent coffee shop and enjoy my coffee there instead of a crowded Starbucks, but unfortunately Shanghai doesn't have that many of them yet as the coffee culture here is still not that developed.

I still pay high prices for foreign products, from time to time, when I get homesick for a taste of home. As for clothes, makeup and perfumes, I shop in bulk when I go back home so that I don't have to pay these ridiculous prices when I come back to Shanghai.

But surprisingly Starbucks is filled with Chinese customers. For them, it is a luxury item and they don't mind paying the high prices."