Recruiting in China

EMI Group Plc, which lost a copyright lawsuit against Baidu.com, has agreed to work with the Chinese search engine to distribute streaming samples of its music online and share advertising revenue from the service under a "strategic partnership."

The two companies will also explore advertising-supported music download services that will be free of charge for all users of Baidu, the world's fourth most visited site and whose MP3 search function already contributes to 14 percent of its online traffic.

"It's a landmark revenue-sharing arrangement between an Internet search engine and an international music company in China," said a joint statement by the two companies yesterday.

Beijing-based Baidu will set up a special EMI Music Zone in its music search channel that will stream all of EMI Music's Chinese language music. While users listen to the music for free, they will be exposed to online ads.

"It provides an efficient digital distribution platform to reach Chinese consumers, allowing fans to listen to EMI's latest quality music immediately on the Internet," said Norman Cheng, chairman of EMI Music Asia in the statement.

Sales of search engines in China last year rose by nearly 50 percent from a year ago to 157 million yuan (US$20 million), at a much greater growth pace than Web portals.

Based on ratings of the commercial users that paid for advertising on the search engines, Baidu.com topped the market with a 39 percent share of the China market, followed by Google Inc's 20 percent and Yahoo's 12.6 percent.

Meanwhile, sales of online advertising excluding ads revenue by search engines in the past year in China also soared by 51 percent to nearly five billion yuan.

EMI was one of seven record companies that filed an infringement lawsuit against Baidu in September 2005, claiming the Website violated copyright by providing links to illegal music on non-affiliated sites. A Beijing court ruled in Baidu's favor.

China's rapid economic expansion has allowed Beijing to fund a recruitment drive targeting some of the best and brightest IT graduates from U.S. universities, according to Chinese sources.

In turn, this brain trust is being used by China both as a control on its own Internet revolution and as a potential resource for North Korea' cyberwar program.

South Korean defense ministry said North Korean hackers are targeting the most tightly-guarded systems of that country's main foes to extract intelligence information and to spread viruses capable of wiping out material or, at least, slowing down computers.

North Korean students learn how to use computers at an elite school in Pyongyang. AFP

Defense officials said privately that North Korea, with no great pool of computer whizzes from which to select, is relying on Chinese aid and advice to train some 600 qualified hackers in five years.
One Hong Kong-based specialist said China has a budget for hiring the best IT graduates from U.S. universities to monitor and control Internet news reporting, and useage within its own borders as well as for a national security resource. "They've got the money, and they are spending it," he said.

In North Korea, the campaign ranks as a priority for Kim Jong-Il, who whetted his appetite for computer skullduggery during visits to China and Russia several years ago. Kim made a point of visiting computer labs in both countries and decided that all North Koreans should somehow become adept at operating computers even though Internet access is forbidden except for the highly privileged elites.

Those having access include Kim Jong-Il closest relatives, friends and allies, notably from the armed forces, as well as extremely well-trained technicians who had to pass strenuous tests of loyalty before being accepted into the elite computer course.

Students are studying in China and also at an academy that South Korean officials say has been educating a cadre of elite technicians for more than 20 years in a remote mountainous region.

CEBU, The Philippines: China and the Association of Southeast Asia Nations (ASEAN) signed an agreement on trade in services here yesterday - a major step toward establishing a free trade area (FTA) in the region by 2010.

The deal, which was inked in the presence of Premier Wen Jiabao and 10 ASEAN leaders, will help firms from the Southeast Asian economic bloc gain improved market access to multi-billion dollar service sectors including banking, information technology and tourism.

The agreement "marks a key step forward in building the China-ASEAN Free Trade Area and lays the foundation for its full and scheduled completion," Wen said in a keynote speech yesterday at the 10th ASEAN-China Summit.

Trade between China and the ASEAN states has been booming in the past 15 years it grew more than 20 per cent a year, reaching $160 billion last year. The two sides are each other's fourth-largest trading partners.

Trade volume will continue to grow by about 20 per cent this year although the possible outbreak of bird flu, natural disasters, regional security and global financial risks could slow the increase, Lu Jianren, a researcher at the Chinese Academy of Social Sciences, predicted.

An agreement on merchandise trade took effect in July, 2005, following an early harvest scheme of initial tariff cuts on meat, fish, dairy products, vegetables, fruits and nuts. The services agreement was one of the remaining key items to be finalized in addition to an investment agreement.

Speaking at the summit, Wen called for the acceleration of talks on the investment agreement so as to complete setting up of the FTA by 2010 as planned.

When completed, the China-ASEAN FTA will be the world's largest, encompassing around 1.7 billion consumers and with total trade estimated at $1.2 trillion. Related comment: ASEAN comes of age
Southeast Asia is moving, though very slowly, towards economic integration. Once established, the region will be the largest trading bloc in the world.

To promote the building of the FTA, China is ready to speed up discussions and sign a memorandum of understanding on establishing the China-ASEAN Trade, Investment and Tourism Promotion Center, Wen said.

China also proposes ASEAN transport collaboration be strengthened in the next 10 to 15 years to facilitate development of regional transportation and communication.

Wen noted China would enhance cooperation in combating transnational crime, maritime security, disaster reduction and relief, prevention and control of communicable diseases and environmental protection.

Wen was in Cebu to attend a series of East Asian summits that include the 10th ASEAN-China Summit, the 10th ASEAN Plus China, Japan and Republic of Korea (ROK) Summit ("10+3" Summit) and the 2nd East Asia Summit. He also chaired the 7th Chinese, Japanese and ROK Leaders' Meeting yesterday.

Is finding a new job on your list of New Year's resolutions? The market may be in your favor.

Recent reports from the U.S. Labor Department indicate that while the expansion of the U.S. economy is slowing, it is doing so at a reasonable pace, and inflation has steadied. A moderated, yet stable, job market is expected to carry over into 2007 with gains that will remain strong enough to keep the unemployment rate in check.

University of Michigan economists predict the United States will create 1.5 million jobs in the next 12 months. According to CareerBuilder.com's annual job forecast, 40 percent of hiring managers and human resource professionals operating in the private sector report they will increase their number of full-time, permanent employees in 2007, compared to 2006. Eight percent expect to decrease headcount while 40 percent expect no change. Twelve percent are unsure.

Employers are expected to become more competitive in their recruitment and retention efforts in the New Year as the pool of skilled labor shrinks and productivity growth plateaus. Forty percent of employers report they currently have job openings for which they can't find qualified candidates.

This bodes well for workers who are likely to benefit from more generous job offers, more promotions, more flexible work cultures and other major trends identified for 2007:

No. 1: Bigger Paychecks
To motivate top performers to join or stay with their organizations, employers plan to offer better compensation packages. Eighty-one percent of employers report their companies will increase salaries for existing employees.

Sixty-five percent will raise compensation levels by 3 percent or more while nearly one-in-five will raise compensation levels by 5 percent or more.

Nearly half of employers (49 percent) expect to increase salaries on initial offers to new employees.

Thirty-five percent will raise compensation levels by 3 percent or more while 17 percent will raise compensation levels by 5 percent or more.

No. 2: Diversity Recruitment -- Hispanics Workers in Demand
Understanding the positive influence workforce diversity has on overall business performance, employers remain committed to expanding the demographics of their staffs. With the Hispanic population accounting for half of U.S. population growth since 2000, according to the U.S. Census Bureau, and buying power growing 8 percent annually, one-in-ten employers report they will be targeting Hispanic job candidates most aggressively of all diverse segments. Nine percent plan to step up diversity recruiting for African American job candidates while 8 percent will target female job candidates.

Half of employers recruiting bilingual employees say English/Spanish-speaking candidates are most in demand in their organizations.

No. 3: More Flexible Work Arrangements
Work/life balance is a major buzzword among U.S. employers as employees struggle to balance heavy workloads and long hours with personal commitments.

Nineteen percent of employers say they are very or extremely willing to provide more flexible work arrangements for employees such as job sharing and alternate schedules. Thirty-one percent are fairly willing.

No. 4: Rehiring Retirees
Employers continue to express concern over the loss of intellectual capital as Baby Boomers retire and smaller generations of replacement workers fall short of labor quotas.

One-in-five employers plan to rehire retirees from other companies or provide incentives for workers approaching retirement age to stay on with the company longer.

No. 5: More Promotions
With the perceived lack of upper mobility within an organization being a major driver for employee turnover, employers are carving out clearer career paths.

Thirty-five percent of employers plan to provide more promotions and career advancement opportunities to their existing staff in the New Year.

No. 6: Better Training
In light of the shortage of skilled workers within their own industries, the vast majority of employers -- 86 percent -- report they are willing to recruit workers who don't have experience in their particular industry or field, but have transferable skills.

Seventy-eight percent report they are willing to recruit workers who don't have experience in their particular industry or field and provide training/certifications needed.

No. 7: Hiring Overseas
Companies continue to drive growth by entering or strengthening their presence in global markets. Thirteen percent of employers report they will expand operations and hire employees in other countries in 2007. Nine percent are considering it.

With China's economy expanding at 10 percent annually and India's at 8 percent, these two countries are particularly attractive to U.S. companies.

Twenty-three percent of employers recruiting overseas report they will hire the most workers in China and 22 percent will hire the most in India.

Survey Methodology
This survey was conducted online by Harris Interactive on behalf of CareerBuilder.com among 2,627 hiring managers and human resource professionals (employed full-time; not self employed; with at least significant involvement in hiring decisions), ages 18 and over within the United States between November 17 and December 11, 2006. Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents' propensity to be online.

With a pure probability sample of 2,627, one could say with a ninety-five percent probability that the overall results have a sampling error of +/- 2 percentage points. Sampling error for data from sub-samples is higher and varies. However that does not take other sources of error into account. This online survey is not based on a probability sample and therefore no theoretical sampling error can be calculated.

Matt Ferguson is CEO of CareerBuilder.com. He is an expert in recruitment trends and tactics, job seeker behavior and workplace issues.

SOHO China Ltd, a Beijing-based property developer, hired Goldman Sachs Group Inc and HSBC Holdings Plc to revive a Hong Kong initial public offering, people with direct knowledge of the transaction said.

SOHO China may raise US$400 million by June to finance new projects, Bloomberg quoted the people, who declined to be identified before a public announcement. Company spokeswoman Wang Chunlei declined to comment.

Mainland developers are tapping the Hong Kong stock market to fund new properties as the government tries to limit bank lending to the industry. China has restricted land supply, curbed loans to real estate companies and imposed new taxes to slow a surge in property prices and investment.

"Traditionally, developers have relied on bank loans," said Jason Yang, a senior manager at the professional services department of property agency Colliers International in Beijing.

"They are now either launching public share sales or real estate trust offerings to cope with the funding crunch as a result of the tightening measures."

Chinese developers aren't allowed to use bank loans to buy land sites, said Wayne Zane, a director of research at Colliers in Shanghai. The government in 2004 raised the amount of cash developers have to come up with on their own to 35 percent of total development costs from 20 percent.

SOHO China in 2002 delayed a US$250 million IPO in Hong Kong and the US because of disagreement between arranger Goldman Sachs and other advisers involved in the sale over its profit outlook, bankers involved said at the time.

The company in January 2003 scrapped the sale, citing unfavorable market conditions in a filing with the US Securities and Exchange Commission. SOHO's Website contains no information on its earnings.

SOHO was co-founded by former oil ministry employee Pan Shiyi and his wife, former Goldman Sachs analyst Zhang Xin, in 1995. The couple ranked 237th on Forbes magazine's list of Chinese mainland's 400 richest people last year.

Beijing's average real estate prices increased 16.7 percent to 8,792 yuan (US$1,128) per square meter last year, Xinhua news agency reported on Jan. 8, citing a report released during an industry conference.

As much as 200.1 billion yuan worth of apartments, houses, office buildings and shops were sold in the Chinese capital last year, Xinhua said without giving a comparative figure for 2005.

SOHO China has focused on buying sites in the Central Business District in eastern Beijing, where it built residential and office properties under the SOHO brand, catering to the city's newly rich.

"It has shown a track record of acquiring prime sites," Yang of Colliers said. "Its property sales have been brisk."

The company has developed 1.58 million square meters of properties, about a fifth of the Central district's total area, according to its Web site. Projects include Jianwai SOHO, a residential and commercial complex opposite the China World Hotel.

Some Chinese property stocks traded in Hong Kong have rallied in the past year, triggering a rush to raise more money selling stock. Hopson Development Holdings Ltd. which invests in Chinese properties, saw its shares jump 132 percent in 2006. The company raised US$126 million in a Hong Kong stock sale in November.

Guangzhou R&F Properties Co Ltd, which raised US$208 million selling shares in September, soared 149 percent last year.

MAN Group Plc, the world's largest publicly traded hedge fund manager, said assets under management rose above US$60 billion as clients added more money in the final quarter of 2006 compared to a year earlier and investments gained.

Fund sales reached US$2.5 billion in the quarter, while redemptions stood at US$1.1 billion, London-based Man said in a Regulatory News Service statement yesterday, according to Bloomberg News. Fund performance added US$2 billion to assets. Man had US$56.8 billion under management at the end of September.

Chief Executive Officer Stanley Fink, who steps down in April, has increased Man Group's assets under management more than tenfold during his five-year tenure. Net client inflows totaled US$1.4 billion in the three months through December, double the US$700 million during the same period a year earlier.

"The good news in the story is the low redemption rate and the sales to private investors," said Bruce Hamilton, an analyst at Morgan Stanley in London who has an "overweight" rating on the stock.

Man Group said US$34.6 billion of its assets were overseen for individual investors, compared with US$23.5 billion for institutions. Companies benefit from individual investors because they tend to pay higher fees than institutions such as pension funds.

Replacement

During the first six months of the company's fiscal year, which end in March, Man Group posted net inflows of US$7 billion.

Fink took over Man in 2000 when it had US$4.7 billion of assets. He will be replaced by Finance Director Peter Clarke.

The company took in money even as some of Man Group's funds underperformed. Its flagship AHL Diversified fund last year gained about 6.4 percent to December 25, undershooting the 17 percent surge of the Morgan Stanley Capital International World Index and the 11 percent gain for the Standard & Poor's 500 Index.

Hedge funds typically cater to clients with at least US$1 million to invest, and take larger bets than traditional funds. They usually charge a fee of about two percent for managing money as well as 20 percent of any investment gains.