Recruiting in China

Chinanews, Beijing, October 25 ¨C According to the ¡°Report on Migrant Workers¡¯ Life in Cities¡± by National Statistics Bureau, more than 70% of them find cities friendly, and over 50% want to stay.

Over 40% of migrant workers believe their working conditions are improving. About 40% find life in cities expensive, and their lack of training adds to their difficulties. Nearly 20% wish to enjoy social security benefits and housing allowances.

The great population shift from rural areas to cities is unavoidable in China¡¯s industrialization and urbanization, and migrant workers (especially migrant industrial workers) play an irreplaceable part in accelerating this process.

Chinanews, Beijing, October 24 ¨C According to the People¡¯s Bank of China, the country has a foreign exchange reserve of $987.9 billion, ready to top $1 trillion with an average monthly growth of $20 billion.

The great leap of China¡¯s trade surplus contributes a lot to the rapid growth of its foreign exchange reserve. Statistics show that China enjoyed a $32 billion trade surplus in 2004 (China¡¯s foreign reserve then was only $800 billion), and the figure soared to $101.9 billion in 2005. It is estimated that there will be a $150 billion trade surplus in 2006.

The great foreign exchange reserve actually guarantees financial security in the country, and strengthens investors¡¯ confidence in China¡¯s economy and its influence in the world as well.

Oct. 25 - The trading of stock index futures will be launched at the Shanghai-based China Financial Futures Exchange in early 2007, the country's top regulator Shang Fulin said in Beijing Tuesday.

"With the listing of some major state-owned commercial banks and big enterprises, there is a much stronger connection between the stock index and the national economy. The opportunity to trade stock futures has arrived," the chairman of China Securities Regulatory Commission (CSRC) said at a seminar on financial derivatives.

The capital market has been keen to develop financial futures for years. It is also a must for further development of the capital, monetary and insurance market, Shang said.

China Financial Futures Exchange, the country's first financial derivatives exchange, was inaugurated on September 8.

Zhu Yuchen, the exchange's general manager, said trading stock futures will provide investors with a new risk hedging tool.

"Currently investors can only profit when the index is going up. With the introduction of index futures, investors now can also make money when the index falls," he said.

Oct. 24 - The European Union (EU) has drafted a new strategy for its relationship with China, with the nation being described by senior EU officials as "having returned to the centre" of world affairs.

The EU's executive Commission will release the new policy paper today.

In it China-EU relations are described as positive but there are also calls for a closer partnership, to deal with global challenges such as energy supply and sustainable development as well as smoother economic and trade co-operation.

"We both have a huge stake in effective multilateralism, and in international peace and stability across the globe," said EU Trade Commissioner Peter Mandelson and External Relations Commissioner Benita Ferrero-Walder in a joint article for the International Herald Tribune newspaper.

"We have a shared responsibility to address climate change, sustainable development and energy security. We have a shared responsibility to work more closely on issues such as development assistance in Africa."

They said that China's economic success in the past two decades had "lifted more people out of poverty more quickly than ever in human history" and China had become "an increasingly active international player."

The two EU officials will jointly present the policy document to the European Parliament today in Strasbourg, according to European Commission (EC) spokesman Stephen Adams.

The document, which will review China-EU relations over the past 10 years and map out a new strategic initiative for the 25-member bloc's interaction with China, is accompanied by a policy paper on trade and investment, the EU's first ever strategic paper solely focusing on trade and investment with China, said Adams.

On bilateral economic and trade ties, the joint article said "Europe has benefited from China's market for advanced technology, high-value goods and complex services, and European consumers and businesses have benefited from competitively priced Chinese imports."

"Europe should continue to offer open and fair access to China's exports and to adjust to the competitive challenge," they said, urging China to strengthen its commitment to economic openness and market reform.

"It (China) should improve legal protection for foreign companies and reject anticompetitive trading practices and policies," they said.

It is learnt from the Sate-owned Assets Supervision and Administration Commission (SASAC) of the State Council on the 14th that China has formally commenced the recruitment of senior executives for central gov't-owned enterprises (CGE) from home and abroad. A total of 26 executives will be hired, which is the largest number of its kind to date. The soon-to-be first round recruitment will fill ten positions.

These ten posts are seven deputy general managers (deputy director generals and vice presidents) and three general accountants. There are three features in this year's recruitment. First is the recruitment of a few each time but many more recruitments. The first batch, to be recruited from within and outside of China, will be for positions for ten CGEs, the second batch will include five general accountants to be hired for five CGEs with special characteristics, which will only target CGEs in a given range, and the public recruitment notice will be posted shortly in a specially designated area. Consigned by 11 CGEs, the third round will recruit 11 general counselors-at-law from society at large around this August.

In addition, on the basis of summing up the experience of the recruiting work in the previous three years, SASAC will introduce in full the evaluating technology of examination and assessment centers, starting this year. This technology focuses on examining the candidates' genuine abilities at work as well as his organizing and coordinating capabilities, which is more suitable for selecting talents of senior management level.

Starting in 2003, SASAC openly recruited senior executives from around the globe for the first time. After three years, it has hired 75 senior executives, including those in two key jobs. It realized a major breakthrough in CGEs' marketization in employing senior executives.

Earlier this year, New York-based recruiter Henry Lipschutz persuaded Kurt Berney, a prized partner at Wilson Sonsini Goodrich & Rosati, to join O'Melveny & Myers' China practice.

Landing a skilled M&A partner like Berney who was willing to relocate to China was a coup. And it came from a cold call.

The world's largest law firms are intensely interested in China and the other fast-growing economies of Asia. But firms eager to open or expand offices there are finding the supply of lawyers is outstripped by demand.

That's creating opportunities for U.S.-based recruiters like Lipschutz, who says Asia now accounts for about 60 percent of his placements. For now, it's a small market -- there just aren't that many partners in Asia willing to move around. But it's expected to grow.

"There is tremendous opportunity for search work on the horizon [in China]," says Newport Beach, Calif.-based consultant Peter Zeughauser, who advises many firms on their China strategies. "It's starting now and it will be a long run -- maybe 15 to 25 years."

Firms with established China practices, like O'Melveny, can recruit people like Berney, who are willing to take a specialty and move it overseas. Firms trying to launch a China practice, however, need partners who've been on the ground in Asia.

"There are a lot of legal recruiters actively recruiting in China -- there is no shortage of people trying to do that," says partner Howard Chao, who heads O'Melveny's Asia practice. "Where things are tight are senior people with lots of China experience."

Lipschutz, who points to the shortage of partners in explaining why he's focused on recruiting second- to fifth-year corporate securities associates, agrees. "All the partner-level lawyers that should be in Asia have been there for the last three years," he says.

Thomas Shoesmith is one of them. After starting his career with Cooley Godward, he joined the Shanghai office of Paul, Hastings, Janofsky & Walker. Earlier this year, recruiter Avis Caravello brought the IP litigator to Thelen Reid & Priest, where he's launching the firm's China practice.

"Tom would call me at 8 at night" -- morning in China -- "and the kids would answer the phone, 'It's Tom Shoesmith,'" Caravello said.

Despite the need for evening and even middle-of-the-night phone calls -- there's a 15-hour time difference between San Francisco and Shanghai -- more U.S.-based recruiters are making inroads in China.

Zeughauser, who says he only represents partners who've told their current firms they are looking to leave, says he's currently doing some work in China.

Major, Lindsey & Africa joined the small colony of Western recruiters with offices in Hong Kong a few years ago. Recruiters there are increasingly doing more work for U.S. firms that want to open in Beijing and Shanghai.

"Demand has been strong now for five years, but at least with respect to China, it does now seem to be hitting a fever pitch," says Charles Fanning, a global practice leader at Major Lindsey who is based in San Francisco.

Joe Macrae, founder of Mlegal consulting, primarily does recruiting on behalf of U.S.-based firms in the London market. He says his firm is currently handling work on behalf of five candidates in Taiwan and Shanghai seeking to work stateside, or to move within their local markets. Silicon Valley recruiter Carl Baier recently handled work for candidates in China and India, and as a solo he forges deals with larger search firms in other parts of the world.

The biggest hurdle for recruiters is the shortage of recruits. "To the extent that we could find people in China, they would be very viable candidates," says Caravello. "But it is like the needle in the haystack in Asia."

Adding to the difficulty, talent searches in China have become increasingly specialized. Where firms employed generalists who could handle foreign direct investment, they're now calling on specialists in IP, private equity and M&A, says Gregory Nitzkowski, co-managing partner at at Paul, Hastings, Janofsky & Walker. The latter are especially in demand, recruiters say, as Chinese companies in the last year have developed an appetite for American ones.

As in other international markets, poaching is common. And as with many ex-patriot communities, lawyers in Hong Kong and China seem more often willing to make the move.

"There is more mobility in Asia," says partner Michael Gisser, who co-heads the Asia-Pacific practice of Skadden, Arps, Slate, Meagher & Flom. "There is less stigma associated with job-changing by partners and associates alike. In the U.S., "if someone is on their third or fourth law firm, it is more likely to raise a question."

While individual hires account for much recruiting, some firms prefer to bring on groups in the international market.

"Our London growth has been with groups and I love recruiting [that way]," says Morrison & Foerster Chairman Keith Wetmore. "I have higher confidence around quality and demonstrated team dynamics [with a group]. With a single person, you don't know why they are in the market."