Recruiting in China

Bayer has signed a memorandum of understanding with the China Europe International Business School to work together to develop and enhance best practices in the chemical and pharmaceutical sectors in China, which have grown rapidly in recent years.

Bayer Technology and Engineering (Shanghai) Company Ltd. (BTES), a subsidiary of Bayer Technology Services of Leverkusen, Germany, signed the MOU with CEIBS a month after Bayer and the CEIBS established the "Bayer Chair in Strategy and Marketing" as well as the "CEIBS Center for Health Policy and Management."

A key element of the MOU is the joint hosting of the "International Technology Excellence Congress in Process & Pharmaceutical Industry," which was recently held on the CEIBS campus in Shanghai from April 17 - 18, 2007. The congress, which is set to become a joint annual event from this year onward, featured leading international experts from the chemical and pharmaceutical sectors.

"The cooperation with the China Europe International Business School, China's leading international business school, is a landmark step forward, not only for Bayer Technology Services in China, but also in the continuing development of the chemical and pharmaceutical sectors," said Dr. Armin Knors, head of BTES, at the congress, which attracted more than 150 participants from the chemical industry and leading universities. "These industries are likely to play a critical role in the ongoing growth of China, and we believe that the MOU will facilitate improvements in practices and procedures, both from a technological perspective and also in terms of the knowledge and expertise that workers in these sectors will need to have."

The planned cooperation under the five-year agreement is just the latest stage in the sustained growth of Bayer Technology Services in the Asia-Pacific region. In recent years, the company as carried out a range of complex, cutting edge projects in China.

Dr. Rolf Cremer, Dean of the China Europe International Business School, said: "Our mission is to provide an understanding of international business management practices and how these can be applied in China. Our relationship with Bayer Technology Services means that we will be able to work closely with an acknowledged industry leader to help advance best practice in the chemical and pharmaceutical sectors in China."

CEIBS was established in Shanghai on November 8, 1994 and is the leading China-based international business school. Its main objective is the contribute to the economic development of this country and its business communities. It does this by offering MBA students, top managers and senior executives of companies operating in, or planning to enter, China the latest knowledge and a thorough understanding of current practices in international management, helping participants to adapt them successfully to their own business environment. Based on its own campus in Pudong, Shanghai, the school is a not-for-profit joint venture established under an agreement between MOFTEC and the European Commission. CEIBS also has representative offices in Beijing and Shenzhen.

Metso Paper, Inc.

Metso Paper to establish a new service center in Guangzhou, China

Metso Paper will establish its second Service Center in China. The
center, which will be located in Guangzhou, Guangdong province, will
provide advanced machinery maintenance and process development services
to the pulp and paper making industry in southern China. The value of
the investment is close to EUR 10 million.

The new greenfield Service Center will be operational in 2008. In the
beginning, the center will employ 40 service professionals - recruiting
of personnel is already ongoing.

The Guangzhou Center will feature a fully equipped roll service workshop
providing rolls, roll covers as well as mechanical roll maintenance for
all makes and sizes of pulp and paper machines. In addition, the center
will offer a full scope of spare part and mill site services.

Establishment of the new Guangzhou Service Center is a natural
continuation to Metso's commitment to serve the Chinese pulp and paper
industry locally. In line with this, Metso Paper is also strengthening
its existing service operations in China. The Wuxi Service Center that
was opened in Jiangsu province in 2001 will double its roll service
capacity by opening an extension in October 2007.

In 2003, Metso Paper established a logistics center in Wai Gao Qiao,
Shanghai, to support fast deliveries of spare parts and consumables.

To serve the growing paper, board and pulping equipment market, Metso
Paper also has a production plant in Shanghai with 500 employees, and
a 1,100-strong manufacturing joint venture in Xi'an.

During the last ten years the Chinese pulp and paper industry has made
substantial investments in new machinery and technology. Metso Paper has
been involved in many of these projects, and is currently the leading
technology supplier to this industry.

Metso is a global engineering and technology corporation with net sales
of approximately EUR 5 billion. Its 25,500 employees in more than 50
countries serve customers in the pulp and paper industry, rock and
minerals processing, the energy industry and selected other
industries.
www.metso.com

SHANGHAI has launched a technician training program to solve unemployment among young people by matching polytechnic and college graduates with employers, city officials announced yesterday.

The pilot training program will be implemented this year in schools and vocational institutes specializing in training of students for the automobile, equipment manufacturing, new material and new energy, logistics, trade, exhibition and other manufacturing industries.

Jiao Yang, the city government spokeswoman, said matching graduates with companies could fill the professional vacancies while at the same time ease the city's youth unemployment pressure.

Schools are required to cooperate with firms to design curriculums and carry out classroom teaching according to employers' requirements.

Schools can send students to work at the companies on a regular basis throughout the three-year study period to gain practical experience. But the total hands-on job training period should not be less than one year.

The government will allocate money from the city's unemployment fund to subsidize companies for costs of using their equipment.

Officials said the training program was expected to raise the city's percentage of high-level technicians from 17 percent now to 25 percent by 2010.

GENERAL Motors, Ford and DaimlerChrysler announced today they will provide training for their suppliers in China on how to keep their working conditions safe, health and legal.

The plan has the backing of the China Association of Automobile Manufacturers, a government-supported industry group, the three automakers said in an announcement, according to The Associated Press.

General Motors Corp has more than 20,000 employees in China and relies on suppliers employing thousands more. Ford Motor Co and German-American automaker DaimlerChrysler AG similarly have many suppliers based in China.

Senior executives of the three automakers were in China's commercial capital for the weeklong 2007 Shanghai Auto Show, which ends on Saturday.

The automakers will use training designed by the Automotive Industry Action Group aimed at educating suppliers about Chinese labor laws and improving compliance with safe working standards, the statement said.

"The single most important resource at any of our member companies is people," J. Scot Sharland, the action group's executive director, said in the statement.

"Given the tremendous growth of North American investment in the developing Chinese automotive supply chain, it is imperative that these companies are cognizant of local labor laws and fundamentally understand that Ford, GM and DaimlerChrysler expect 100 percent compliance."

The training is due to begin by the middle of 2007, it said.

The statement cited an unnamed official from the Chinese automotive industry group noting the need for companies to abide by domestic labor laws.

Multinational companies operating or sourcing in China are under intensifying scrutiny for labor conditions at their factories and those of their suppliers. Meanwhile, China has been urging foreign-invested companies to let employees join the government-sanctioned labor federation.
The Automotive Industry Action Group was set up in 1982 to handle industry-related issues such as cost reduction, product quality, health, safety and the environment. It has more than 1,500 member companies in North America, Europe and the Asia-Pacific.

The group said it is also beginning training sessions in Mexico in mid-2007.

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.

GRACE Construction Products, a leading US construction and building materials maker, said it plans to complete at least one acquisition this year in China.

Jeremy Gray, Grace's vice president for Asia Pacific, said in an interview that the company also plans to build one or two plants in 2007 in China's underdeveloped western region to capture potential growth there. It now has four manufacturing sites in the country.

The company is a business unit of New York-listed W.R. Grace & Co.