Recruiting in China

GUANGZHOU - High numbers of company closures and large-scale redundancies have led to a surge in labor arbitration cases in Guangzhou, a senior official said on Monday.

Xie Yingjian, director of the arbitration office of the Guangzhou labor and social security bureau, said that by the end of last month, more than 60,000 applications had been made for arbitration this year.

The figure is about the same as the combined total for the previous two years, he said.

"There has been a sharp increase in the number of cases since May," he said.

"About 60 percent of them are claims for back pay, with most of the rest being appeals for compensation from people who have been made redundant."

In the past few months, the number of applications has been at least double the total for the same period of last year, he said.

"The global economic crisis has led to the closure of many firms, especially labor-intensive ones, and pushed dozens of others to the brink of bankruptcy. Downsizing and lay offs were inevitable," Xie said.

"Also, because arbitration services are now provided free of charge, more people are pursuing labor disputes."

Labor arbitration became a free service across the country on May 1, with the implementation of the labor dispute intermediation law.

Because of the massive increase in demand for arbitration services, Guangzhou currently has a backlog of more than 9,600 cases, some of which might not be completely settled until next September, Xie said.

Peng Peng, a researcher with the Guangzhou Academy of Social Sciences, said it is no surprise to see labor authorities struggling to cope with the heavy workload.

"Guangdong handles about 25 percent of all labor disputes in China each year, yet the province is home to less than 7 percent of the country's arbitrators," he said.

"It's hardly surprising that they have been struggling to cope since the service became free."

Both trade unions and the government should play an active role in trying to prevent problems from escalating into full-scale labor disputes, Peng said.

"If arbitration is necessary, however, the process should be simplified," he said.

"Under the current economic circumstances, the number of labor disputes is likely to keep rising next year, but people who have been made redundant can't afford to wait around for arbitration," he said.

Social stability could be threatened if the registered urban unemployment rate rises above 5 percent next year, a senior lawmaker warned on Tuesday.

Zheng Gongcheng, a member of the National People's Congress Standing Committee, told China Daily the jobless rate could rise next year from the current 4 percent because of massive job cuts.

His remarks come as policymakers are holding a three-day Central Economic Work Conference to discuss measures to create new jobs and keep the present unemployment level in the face of the global financial crisis.

"If the government can keep the registered urban jobless rate around 4.5 percent, everything would be okay," said Zheng, also a leading scholar in social security at Renmin University of China.

But if the rate - which excludes migrant workers - rises above 5 percent, "it will lead to a series of negative consequences". The number of poor urban residents will increase and living conditions in cities will be compromised, he said.

In such a situation, local governments would be prompted to hire more urban residents instead of migrant workers to keep the jobless rate low. It would leave millions of migrant workers without jobs and force them to return to the countryside.

That is the "last thing we want to see", he said, because a drastic increase in the number of jobless migrant workers could pose a threat to social stability.

The job market in the labor-intensive exports sector shrank in the third quarter of this year because falling overseas demand has forced the closure of many factories.

The job market will reach a two-year low in the first quarter of next year as the global financial crisis takes its toll, according to a survey released on Tuesday.

Conducted by Manpower Inc, a leading global employment services provider, the survey shows the intention of employers in Beijing, Shanghai and Guangzhou for new recruits is the weakest.

"The global economic downturn and decline in exports have made employers more cautious about hiring new staff," said Lucille Wu, managing director of Manpower Greater China.

Late last month, Zhang Xiaojian, vice-minister of human resources and social security said the government would be able to keep the urban registered unemployment rate below 4.5 percent this year, but the figure could rise in 2009.

The ministry, which said 24 million people would be competing for 12 million jobs next year, has submitted a job stimulus package to the State Council, or the country's Cabinet, for approval.

The highlight of the package is the introduction of a special nationwide vocational training program, especially for laid-off and migrant workers, to help ease the pressure on the job market.

Local governments will provide most of the finance for the package by making full use of special employment and unemployment insurance funds, sources said.

"The unemployment insurance fund has topped 100 billion yuan ($14.5 billion), and it's high time it is used," Zheng said.

The country has more than 230 million migrant workers, with about half of them working away from their provinces. About 60 to 70 percent of them are below 28 and lack basic agricultural skills, Zheng said.

"The social trend shows more and more surplus laborers will migrate from rural areas to cities and become industrial workers. We should not drive them back to the countryside," he said.

Top policymarkers will convene today to discuss how to grapple with the challenge of ensuring at least 8 percent economic growth next year while at the same time pushing forward with the nation's economic restructuring, economists have said.

The annual Central Economic Work Conference, to be held from today to Wednesday in Beijing, will set the tone for next year's economic policy. The three-day event is expected to shed more light on how the government will use fiscal and monetary measures to bolster employment and domestic demand, while reducing excessive dependence on exports.

"The meeting will detail measures for achieving at least 8 percent growth in 2009, the minimum required to keep the unemployment situation under control," said Song Hong, a researcher with the Chinese Academy of Social Sciences (CASS). Song was one of the two economists who attended a Nov 28 meeting with top Party officials to discuss economic priorities for 2009.

The nation's economic growth dropped to 9 percent in the third quarter, compared with 11.4 percent for 2007. The global economic slowdown may even drag down China's growth to 7.5 percent in 2009, the lowest in two decades, the World Bank forecast earlier.

Such growth, considered high for many economies, is however not deemed enough for a nation that needs to churn out 10 million jobs for fresh job seekers each year. Over the past months, a number of factories in the costal export bases have closed down, leading to the layoffs of hundreds of thousands of migrant workers.

The bleak situation has led the government to unveil a host of measures such as a $586-billion stimulus package and hefty cuts in interest rates to jack up domestic demand.

Analysts said the government may elaborate at the conference on how it plans to finance the massive stimulus package, which is critical to make up for declining foreign demand.

Zhang Ping, minister of the National Development and Reform Commission, said earlier that the package could bolster annual GDP growth by 1 percentage point by 2010. Previous statistics show 1 percentage point in GDP growth could create about 1 million jobs.

"Policymakers may put forward further fiscal and monetary stimulus measures," Song said. "The $586 billion package may prove insufficient, given the worsening world economy."

It was reported earlier that policymakers would also discuss raising the threshold of personal income tax from 2,000 yuan to 3,000 yuan a month. The move, combined with tax cuts already announced for local businesses, is expected to boost domestic consumption and corporate investment.

Some analysts also expect the yuan to start to depreciate after the conference, which could benefit the nation's struggling exporters.

While most analysts are looking at the conference for more pro-growth measures, some say policymakers will also reiterate the message that they have no intention of delaying the transformation of the country's development pattern.

"The current crisis could be an opportunity to reduce the economy's excessive reliance on exports," Zhao Tao, deputy secretary-general of the Policy Research Office of the CPC Central Committee, wrote in commentary published on Saturday in Outlook Weekly, a publication of the Xinhua News Agency.

According to Zhao, the nation's polices will be directed at boosting domestic demand, consumption in particular, rather than low-end manufacturing for exports.

And the nation will strive to reduce its dependence on foreign trade, as a share of GDP, from 60 percent last year to 40 percent by 2020 and eventually to less than 25 percent.

The government will also unveil more measures to encourage consumption, which should account for about 75-80 percent of the GDP by 2020, Zhang said.

Final consumption, which includes household and community spending, now makes up about a half of the nation's economy, compared with an average of 70 percent in developing countries and 80 percent in developed economies. This forces China to rely heavily on foreign demand, which also makes it vulnerable to economic downturns abroad.

"Policymakers should make clear that growth should not come at the expense of a delay of the nation's economic restructuring," said Zhang Xiaojing, an economist with the CASS, the country's top think tank. "Or we risk repeating today's plight in a few years."

GUANGZHOU - Sun Xiaogang is more familiar with studying the works of famous Chinese writers such as Lu Xun, but now he is swotting up on how to make the best cuts of pork.

Chen Sheng, chairman of Guangdong Tiandi Food Group, gives postgraduates tips on how to sell pork on Thursday in Guangzhou, Guangdong province. [China Daily]

Sun was one of 35 postgraduates hired by Guangdong Tiandi Food Group who worked in markets throughout the city.

The postgraduate student majoring in Chinese literature at Guangzhou's Sun Yat-sen University, will graduate from the school in the summer of next year.

"We do not have specific requirements regarding what they learn, but our one requirement is that all applicants are postgraduates," a manager at the company surnamed Lin told China Daily.

To win the post, Sun sold pork in the market for three days.

The 35 successful applicants signed agreements with the company on Thursday, meaning that they can formally start working as soon as they complete their studies.

After they start work, they still need to sell pork in markets for at least two months, Lin said.

"This is training for all of our new employees," she said.

After the two months, they will be appointed to managerial posts, earning between 80,000 yuan ($12,000) and 100,000 yuan a year, she said.

"The job market is very tough this year. Among all of the students of the Chinese literature postgraduate department at our school, I am the first one to get a job," Sun said.

In contrast, most of last year's batch of postgraduates had no problem finding jobs, he said.

Sun said he did not mind having to work in the market as a pork seller, given the current poor state of the job market. In addition, the firm has offered him a great opportunity, he said.

Li Xiaolu, director of Guangdong education department last month warned students who are going to graduate from college and graduate school next year that the job market they will face will be the toughest in three decades.

He encouraged students not to set their sights too high, adding that working in less-developed areas or setting up their own businesses were two options open to them.

While Shanghai tries to lure top overseas professionals, representatives of 247 companies in Zhejiang will be visiting the city to attract some its workers to the province.

Zhejiang is offering more than 5,000 jobs at a fair to be held in Shanghai on Saturday.

The province is seeking managers, administrative directors, executive vice-presidents and vice-presidents.

"There are 50 to 60 small and medium enterprises (SMEs) from Wenzhou participating at this job fair, with several hundred positions available," Zhou Dewen, chairman of the Wenzhou SMEs development promotion federation, said yesterday.

"Wenzhou is keen on attracting professionals from Shanghai," Zhou said.

He said it is part of an overall plan to attract 600,000 mid- to high-level professionals.

"Although many SMEs have been hit by a drop in overseas orders due to the current financial crisis, it is still of vital importance to recruit and retain good people," Zhou said.

Zhejiang is offering a number of perks in its recruit drive - granting of residential status, subsidized education for children, and spouse employment. "We are offering a salary package 10 to 15 percent higher than anywhere else in China," Zhou said.

The Shanghai University of Finance & Economics (SUFE) has urged its students to attend the job fair.

Ruan Shan, a second-year SUFE student majoring in tourism management, said that her schoolmates, mostly finance majors, are suffering greatly from the global financial crisis.

"Even those few corporations that are continuing to recruit, have drastically cut down on numbers," she said.

Although there is still more than six months to go before graduation, Ruan and her classmates have attended many job interviews, but have received no offers.

Ruan said she will attend the job fair. "I have lowered my expectations. All I want is just a job here, so long as it pays about 3,000 yuan, ($440) after tax," she said.

Representatives of 28 financial institutions here will leave tomorrow for the United Kingdom and the United States in a bid to recruit professionals.

Organized by the Shanghai municipal bureau of human resources and social security, the institutions include banks, fund, and asset management companies. About 170 senior positions are being offered.

In the non-financial sector, more than 1,000 positions are being offered, the government said at a regular press briefing yesterday.

The municipal bureau, together with the local financial services office, will set up three recruitment booths in London, Chicago, and New York.

The booths will be open on Saturday, Tuesday and next Saturday.

"The timing is great for us given the fact that some premier foreign financial institutions are facing hardship and redundancy problems because of the global economic downturn," Chu Minwei, president of Shanghai Finance University, said. The university is also looking to recruit overseas.

It is seeking three people to fill the positions of dean, department of international securities; assistant president, academic affairs; and chief economist, international finance institution.

"We expect the overseas professionals to help extend our global academic network, and introduce more top people to our university," Chu said.

Jeanne Qian, China country manager for human resources consulting firm, Neumann Partners, said.

"It's a smart move by Chinese companies to conduct this strategic hiring given the current situation under which foreign firms are laying off staff.

"Overseas professionals have a broader global view and have more international exposure, in particular to risk management, than domestic professionals."

Ian Crawford, executive director of the British Chamber of Commerce Shanghai, said the City of London is the largest financial market in the world, and thus has a wide variety of outstanding professionals.

"Overseas professionals work in a much bigger and wider market, and therefore have the opportunity to learn more about the trading and application of sophisticated financial products," Crawford said.

However, there are stumbling blocks ahead for the talent hunters, the major ones being salaries and the cultural divide.

"The payment gap will still be there, although we will offer attractive salary packages for ideal candidates. We will offer an annual salary of 500,000 yuan ($ 74,000) or above, which is much higher than the average in China," Chu said.

Crawford said Chinese financial institutions may baulk at the salary and bonus packages being offered to attract top professionals "but there is relatively little attraction for these professionals to come to Shanghai until the Chinese financial markets are significantly opened up".