Recruiting in China

New home prices in 100 major cities averaged 10,442 yuan ($1,706) per square meter in August, rising for 15 consecutive months in month-on-month terms, and indicating the recovery of the property sector, a survey has shown.

Of the 100 cities tracked by the China Index Academy, the research arm of Soufun, China's largest property website, 71 cities posted month-on-month increases, with 31 of them seeing prices rising at a pace above 1 percent, two cities fewer than in July.

The other 29 cities saw monthly declines, 10 cities fewer than in the previous month. Of those, 14 cities saw drops more than 1 percent.

On an annual basis, new home prices in those 100 cities increased 8.61 percent on average, 0.67 percentage point higher than in July.

Among the 10 largest cities, Beijing saw the biggest property inflation with a 3.22 percent month-on-month increase in August, trailed by Wuhan, Hubei province, which posted a 2.16 percent month-on-month increase.

On a year-on-year basis, new home prices in the 10 top-tier cities grew 12.18 percent in August, extending the period of gains to 10 months and pointing to robust housing demand.

"It's increasingly less likely that we'll see new tightening measures in the property market, and investors and homebuyers are returning to the market and pushing up prices because of the limited supply," said Huang Zhijian, chief analyst at Shanghai Uwin Real Estate Information Services Co.

Loosened purchase restrictions in Wenzhou, Zhejiang province, and Wuhu, Anhui province, have sent signals lately that a relaxed policy environment might be in the works by local governments, and trading is now more active than a few months ago, said the report.

In August, Wenzhou quietly loosened purchase restrictions in the housing market by allowing local and non-local residents to buy second homes, while Wuhu decided to abolish transfer taxes and start paying a 20,000-yuan subsidy to undergraduate homebuyers with three-year work experience in the city.

Zhang Dawei, research director at real estate company Centaline Group, said there will likely be more cities following those moves across the nation to ease purchase restrictions. Local governments rely heavily on the property market, a key driver of economic growth and a cash cow for them, Zhang added.

However, Hui Jianqiang, research director of Beijing Zhongfang-yanxie Technology Service Ltd, said that Wenzhou and Wuhu tweaked the policies to stop the continuous fall of home prices in the two cities.

Wuhu saw the heaviest losses in the home price list after shedding 2.29 percent month-on-month, while Wenzhou saw home prices decrease 0.31 percent.

Xu Shaoshi, minister of the National Development and Reform Commission, said in a report delivered to a meeting of the Standing Committee of the National People's Congress on Aug 28 that the government will launch pilot property tax programs in more cities.

"There will be between six and eight more cities with trial property tax programs this year, with some of them possibly levying the tax on pre-owned homes," said Chen Sheng, vice-president of the China Real Estate Data Academy.

An overwhelming majority of those questioned in an online survey expressed opposition to a proposal pushing back the retirement age.

Nearly 95 percent of some 25,300 polled netizens said they were against the prospect of the retirement age being increased, according to the survey jointly conducted by the Beijing-based China Youth Daily and Sohu, a leading news portal.

The retirement age in China is 60 for male employees, 55 for female officials and 50 for female workers. Retirees can claim a pension immediately.

Delaying the pension age would relieve the State's financial burden in supporting a rapidly aging population, according to a proposal released by Tsinghua University earlier this month. It suggested that the government should lift the pension age for workers, both men and women, to 65 from 2030.

Yang Yansui, director of the Tsinghua Center for Employment and Social Security and one of the drafters of the proposal, said it is a matter of urgency for China to lift the pension age given the accelerated imbalance between the working-aged population and the number of senior citizens.

Currently, it takes about seven workers to support one pensioner over 65.

If there is no change to the system, in 2035, it will take two workers to support a pensioner and this would place a heavy burden on the economy, Yang said.

However, about 91 percent of respondents said that they were unwilling to work until 65. Most of the surveyed were aged between 24 to 53, according China Youth Daily on Thursday.

Some 60 percent believed they would be physically incapable of working up to 65 and half of them said increasing the retirement age would make it harder for younger people to get work.

Ma Chenkai, department manager of a toy company in Dongguan, Guangdong province, said it is unrealistic to require blue-collar workers to postpone retirement.

"It's physically demanding to work in manufacturing workshops, eyesight and energy levels deteriorate," Ma, 43, said.

"Plus, their wages will not rise that much even if they continue to work. So the option of looking after their grandchildren at home becomes even more attractive."

More than 60 percent of those polled believed China should introduce more flexible retirement arrangements for people from different walks of life.

Li Guizhen, associate chief technician from the department of laboratory medicine in the Tianjin Academy of Traditional Chinese Medicine Affiliated Hospital, said she would be happy to prolong her working life, as she believes it is a waste of medical expertise to let female paramedics retire at 55.

"It takes years of education and training to become a senior medical professional and I feel energetic, so I prefer to contribute more to society," said Li.

There is no one-size-fits-all solution in terms of the retirement age and the government should allow people to have more options, based on health and their attitude, Li said. She also agreed that the retirement age for government officials should not be pushed back as this would increase the taxpayers' burden.

BEIJING - At least one disabled person should be employed in China's provincial-level Party or government organs and municipal working committees for the disabled by 2020, according to an official statement.

Those bodies are asked to offer more preference to help the disabled get employment and ensure their rights to apply for the civil service, according to the statement posted Thursday on the website of China's Disabled Persons' Federation (CDPF).

At least 15 percent of disabled people should be employed in provincial-level disabled persons' federations, according to the statement.

The statement was jointly issued by seven departments including the Organization Department of the Communist Party of China Central Committee, the Ministry of Finance and the CDPF.

China has more than 85 million disabled people. The number is expected to exceed 160 million by 2050, according to the federation.

China's National Human Rights Action Plan (2012-2015) provides that the country will stabilize and expand employment for the disabled.

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

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

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

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

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

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

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

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

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

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

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

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

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

Financial strength

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

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

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

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

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

Investing in Chinese equities is not easy - even the most experienced investors can get their fingers burnt trying to find the right stocks to back in an opaque and volatile market - but one manager has a tip for would-be investors.

Mirabaud Asset Management's Daniel Tubbs has one golden rule to invest successfully in the region - align yourself with whatever the government wants to do.

The group's head of GEM and manager of the $108m Mirabaud Equities Global Emerging Markets fund said he has been choosing his investments according to government policy, backing the property and infrastructure sectors recently after an uptick in state support.

Tubbs (pictured) said the government's spending on infrastructure such as railways is accelerating, while it is becoming more relaxed about the property market after three years spent trying to dampen the bubble.

"Average house prices have increased 6% year on year, in line with wage inflation," said Tubbs. "We bought Yuexiu Property Company in January. It has a business on the eastern seaboard where there is still pent-up demand.

"It is one of the few property companies which has an investment grade rating, leading to a cheaper cost of capital, which is a big advantage for a property company. It has a 5% yield, trades on six times earnings, and has rallied a lot in the last few weeks," he said.

One of the government's long-term aims is to rebalance the Chinese economy towards domestic consumption, and it will do this by boosting income levels, said Tubbs. He owns China State Construction in the fund's top ten holdings as a proxy to this theme.

The manager argued investors are too fixated on economic deceleration in the BRIC countries, especially China, and said a hard landing is not cause for concern as long as the corporate sector remains robust.

Low summer trading volumes have meant swings in sentiment are exaggerated, he added. This has combined with incremental positive data in the developed world to create a home bias, which is why emerging market equities have been at the sharp end of a sell-off in the last few months, said Tubbs.

He is overweight Russia, Turkey, and China because he is still able to find quality companies to own in those markets and, in China especially, he is seeing encouraging signs of stabilisation.

"It is wrong to be pessimistic on China - it was hard for it to continue to grow at 10% a year," he said.

"I am not worried about growth decelerating as long as companies are still doing well. The Chinese companies we hold reported average net profit growth of 38% year on year in Q2, which is not bad considering the consensus forecast for the whole of China was in the teens.

"People have not given the government enough credit that it can manage the recovery."

Over the year to 27 August the Mirabaud fund has lost 2.91% against an average 0.11% gain from the Equity - Emerging Markets sector, according to FE.

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

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

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

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

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