Recruiting in China

Insurance sector in China is showing a continuing growth during the past few years. There‘re hordes of opportunities present for players in this sector.

According to recent news, there’s been a remarkable increase in the profits of China LIC (Life Insurance Co.) during the 1st half of 2006. The insurance company is said to have earned around 8.97 Billion Yuan during this period as compared to 5.21 Billion Yuan in the year-earlier period.

As per Macquarie’s research note released Sep 18 2006, the results would probably be dominated by investment gains from both sharp rally in the equity markets in China and strong post IPO rally of Bank of China, of which China Life holds 394 Million shares.

Bank of China has cautioned a slow down in the equity markets in China. Growth in policy fees and premium is likely to decelerate from 22 percent to 15 percent in the 2nd half of 2006.

“China Insurance Sector Analysis (2006)” the latest market research report published by RNCOS- a market research and analysis firm- provides an analytical overview of every aspect of the insurance sector in China.

According to this report, “Higher income among the Chinese and growing need for financial products to safeguard any unexpected loss are the main drivers for the China insurance market. Considerable amount of time and efforts have been put in to develop modern insurance solutions, so that insurance needs among the Chinese are met.”

Issues and facts addressed by this report include:

- Marketing strategies of key players in the insurance industry
- Growth in Health and Group insurance driving the Insurance sector in China
- Demographic factors, like death and birth rates, which affect the insurance market in China
- Emerging opportunities and challenges in this sector
- Factors that spur the growth of Life and Non Life insurance in China.

About the Report

RNCOS report on insurance sector in China provides extensive research and objective analysis of the Insurance Sector in China. It helps clients in analyzing the opportunities critical to the growth of Insurance market in China.

About RNCOS

RNCOS, incorporated in 2002, provides Market Research Reports for your business needs and aims to put an end to your information pursuit. Our expertise in gathering global business information for industry research, corporate training, growth consulting, and business consulting, brings reputed companies and firms to us for business enhancement solutions. We can be your one-stop-shop for Industry research information and niche market analysis.

SHANGHAI/SINGAPORE, OCT 2: Morgan Stanley, the world’s largest securities firm by market value, said it acquired Nan Tung Bank, China, giving it a commercial banking licence in China from which it can apply to do business in the local currency and offer new products, including mortgage-backed securities.

The acquisition, approved by China Banking Regulatory Commission, will enable Morgan Stanley to apply for a licence to offer yuan- denominated services in the world’s fastest-growing major economy.

The commercial banking license currently enables Morgan Stanley to offer foreign -currency denominated services, including deposits, mortgage loans, and trade finance to individual and corporate customers based primarily in the Pearl River Delta region of Guangdong Province, the New York-based firm said on Monday.

‘‘Nan Tung Bank is a good strategic fit for our China business,’’ Wei Christianson, chief executive officer of Morgan Stanley in China, said in an e-mailed statement. ‘‘This platform will allow us to provide a wider array of new product capabilities that are currently being offered only by commercial banks with a presence within China.’’

Zhuhai-based Nan Tung Bank, formerly funded by a Macau-based unit of Bank of China, is now a wholly owned subsidiary of Morgan Stanley, the US firm said, without giving details on pricing. Nan Tung Bank, which has only one branch and fewer than 40 employees, serves customers mainly from Hong Kong and Macau.

By fully acquiring Nan Tung, Morgan Stanley will be eligible to apply for a local-currency license immediately, rather than wait for five years had it started operations in China from scratch. Morgan Stanley can also apply to offer derivatives and foreign-exchange products to local and overseas clients based in the world’s mostpopulous nation.

‘‘That’s the right thing to do but you’d need to get the products past the regulator,’’ said Roman Scott, a Singapore-based partner at Boston Consulting Group Inc. ‘‘Everyone would love to do structured products or derivatives if they were allowed to do so in China, if the markets were stable enough to do it.’’

Rivals including Goldman Sachs Group Inc and UBS AG have bought minority stakes in Chinese lenders, which won’t help them win banking licenses to offer services on their own.

Still, a ban by the China Securities Regulatory Commission last month on international securities firms from buying stakes in local brokerages has blocked a route for Morgan Stanley’s expansion in China.

COLUMBUS, Ohio, Sept. 29 /PRNewswire-FirstCall/ -- Global competition, once defined by the Cold War arms race, has evolved into a "head and brains race" where nations measure success through the development and application of technology.

That was one of the conclusions from a Battelle-R&D Magazine report on international research and development trends. The report frames international competition as evolving from the arms race to a "hands race" based on lower-cost manual labor and now to the head and brains race driving the current escalation of R&D spending.

"It is tempting, and certainly reasonable, to acknowledge the fact that each of these races has involved a reliable adversary," says Dr. Jules Duga, senior research scientist at Battelle and co-author of the report. "These adversaries continue to present challenges to the United States that can be met and conquered or accommodated only by long-term strategic investment and will."

While the U.S. remains the standard-bearer in terms of worldwide R&D, China is emerging as an R&D giant. That trend will continue, the report projects.

The U.S. is responsible for 32.4 percent of global R&D this year, compared to 13.4 percent for China. Those numbers were first and second, respectively, worldwide but represent a decline for the U.S. and an increase for China. The same trend will continue in 2007, according to the report, when the U.S. will be responsible for 31.9 percent of global R&D and China 14.8 percent.

"There still is a considerable gap," says Duga, "but it's closing."

With China leading the way, Asia continues to seize more and more of the international R&D market. Asia's share of global R&D grew from 34.9 percent in 2005 to 35.6 percent this year and should continue to grow to a projected 36.5 percent in 2007, according to the report. The U.S., over the same period, has declined from 32.7 percent to 32.4 percent this year and is projected to dip to 31.9 percent next year.

Changes in government attitudes, direct government investments, liberalization of their economies, and an increased emphasis on developing a highly educated, technology-oriented population are some of the factors leading to the R&D growth in Asia. These also are reasons why industry from all over the world is changing the way it develops relationships with the R&D communities from these burgeoning countries. The first steps could be characterized as casual, "testing-the-waters" interactions that included preliminary contract research arrangements. These quickly have evolved into major investments in institution-building, the creation of subsidiary operations, and the development of a wide range of joint ventures.

"It is apparent that the modifications in the internal policies of East and South Asia, in particular, have had and will continue to have an influence on the amounts and patterns of R&D performance in the U.S. and other nations," says Tim Studt, editor of R&D Magazine and Duga's co-author on the report.

Outsourcing of R&D has been a growing trend and will continue to grow as long as the cost of doing business makes sense for U.S. companies, concludes the report. The lower costs in most areas, especially China and India, enhance the competitive position as compared to other (usually domestic) resources and lead to measures of higher productivity. When other advantages, such as enhanced global R&D infrastructure and improved support for other global operations, are considered, the value of outsourcing becomes apparent, says Duga.

"Host countries like China and India have come well down the road in terms of providing a technology-friendly environment," Duga says.

Battelle has prepared a report on U.S. R&D funding annually for more than 40 years, including the last 12 in partnership with R&D Magazine. Duga has co-authored that forecast for 27 years. This is Battelle's second comprehensive report on international R&D spending.

The full report is included in the September issue of R&D Magazine. Reprints are available by contacting Battelle's Jean Hayward at (614) 424-7039 or at haywardj@battelle.org.

Battelle is a global leader in science and technology. Headquartered in Columbus, Ohio, it develops and commercializes technology and manages laboratories for customers. Battelle, with the national labs it manages or co- manages, oversees 20,000 staff members and conducts $3.4 billion in annual research and development. Battelle innovations have included the development of the office copier machine (Xerox); pioneering work on compact disc technology; fiber optics for telecommunications; development of new medical products to fight diabetes, cancer and heart disease; breakthroughs in environmental waste treatment; homeland security technologies; and advancements in transportation safety and security.

BEIJING -- The New York Stock Exchange (NYX - commentary - Cramer's Take) and the Nasdaq Stock Market (NDAQ - commentary - Cramer's Take), worried they're losing out on big IPOs from China, are trying to boost their visibility in the region. They're staffing up and touting the benefits of a U.S. listing to dealmakers at investment banks, private equity outfits and law firms in China.

"Obviously China is a very exciting market. We see it as the fastest-growing market outside the U.S., as well as the strongest market internationally," says Charlotte Croswell, the London-based head of Nasdaq International.

This year the Nasdaq started publishing Going Public: A Guide for Chinese Companies to Listing on the U.S. Securities Markets. Written in both Chinese and English, it details minimum listing requirements, explains the role of investment banks and accountants, and even sets out a sample 20-week IPO timetable, from start to finish.

There's no mystery why the American exchanges are feeling anxious.

Last year, China's IPO proceeds of $24.3 billion ranked second only to those of the U.S., whose companies raised $33.1 billion, according to Ernst & Young/Thomson Financial. And in 2005 China claimed three of the world's 10 biggest public offerings.

But a U.S. listing is no longer the default for ambitious Chinese firms. All three of the Chinese companies on 2005's 10-biggest IPO list -- China Construction Bank, China Shenhua Energy and Bank of Communications -- passed up the U.S. in favor of listing in Hong Kong. The Bank of China, another multibillion-dollar IPO, followed suit earlier this year.

The moves are part of a broader trend of foreign firms passing up the U.S. exchanges.

Companies are discouraged by America's higher regulatory burdens, litigious investors and different accounting requirements. (The U.S. uses generally accepted accounting principles, or GAAP, while some other countries employ a framework called international financial reporting standards, or IFRS.)

And foreign companies that list outside the U.S. don't have any problem reaching American money managers. They can simply arrange ahead of time to sell shares to big institutional investors on the day of their IPO.
As a result of all this, the American exchanges are having to work harder to attract overseas listings -- and China is a key focus. Currently the NYSE has 17 companies listed from mainland China, while the Nasdaq has 29.

The NYSE "has an aggressive marketing campaign out to show the advantages of listing in New York as opposed to listing overseas," says Alan Seem, a Beijing-based partner at the law firm of Shearman & Sterling.

The NYSE and Nasdaq both are seeking Beijing's go-ahead to open offices in mainland China. The NYSE now has two salespeople on the ground in mainland China, with another in Hong Kong.

The Big Board is also hoping to score new listings business through NYSE Arca, an all-electronic trading platform aimed at small, fast-growing companies that don't yet meet the standards of the main board -- a category likely to include many firms from emerging markets such as China. Companies can aim to graduate to the NYSE as they grow bigger.

This year Nasdaq tapped a new Asia-Pacific executive to be based in Hong Kong who will work with another salesperson already focused on China.
Both exchanges say they're seeing progress on the mainland. The NYSE is in talks with four or five Chinese companies "that are considering the U.S. capital markets," according to Noreen Culhane, the NYSE's executive vice president of the global corporate client group.

"Our pipeline, I would say, is stronger now than it was 12 months ago," says Nasdaq's Crosswell, although she acknowledges that some of those IPOs may not take place for a couple more years.

Even as they vie for more Chinese business, both U.S. exchanges deny competing with the Hong Kong bourse.

"We say we don't compete with local markets," explains Crosswell. Chinese IPOs "have always gone to Hong Kong. That has always been quite a natural home for them as well as Shanghai and Shenzhen." Nasdaq offers a "complementary" listing that can increase their visibility, market liquidity and access to capital, she says.

But in fact, while Shanghai and Shenzhen are still crowded with weak, poorly run government-owned companies from the mainland, the Hong Kong exchange has emerged as a more powerful regional force over the past few years. Its legal infrastructure is much stronger than that on the mainland, and its regulations are respectably high -- though not as burdensome as those in America.

Still, American exchanges contend they are in a different league from their peers in Hong Kong and elsewhere. The 2,700 companies listed on the NYSE claim a total market value of $23 trillion. "This is the deepest investor pool in the world. Companies come here because they understand there is a valuation premium that comes with being associated with high listing standards," says Culhane.

Companies that trade on an American exchange are able to give stock options to employees based in the U.S. They also benefit from a higher profile that can help them attract stateside customers, business partners and employees.

That's important for Chinese outfits with international ambitions -- or so say the NYSE and Nasdaq. But lately, a small but notable number of major Chinese companies don't seem convinced.

Industrial & Commercial Bank of China attracted a great number of retail investors and is expected to raise up to $22 billion, the most ever raised in a stock debut anywhere.

HONG KONG - (AP) -- China's biggest lender, Industrial & Commercial Bank of China, attracted the largest amount of orders ever from Hong Kong retail investors for the bank's initial public offering, news reports said Friday.

The bank's dual IPO in Hong Kong and Shanghai is expected to raise up to $22 billion, the most ever raised in a single share debut anywhere.

The retail portion of the offering drew orders of more than HK$420 billion ($53.9 billion) in Hong Kong, The Standard newspaper and the Hong Kong Economic Journal said.

More than 1 million people -- or one in seven of Hong Kong's total population -- placed those orders, the Journal said.

The keen demand surpassed the record set by Bank of China, the mainland's No. 2 lender, whose IPO in June drew HK$280 billion in retail orders.

The Hong Kong portion of the IPO is being priced Friday, while the price of the mainland portion will be set Monday. The shares are due to begin trading simultaneously in Hong Kong and Shanghai Oct. 27.

Given the strong interest, the state-owned bank is expected to price its shares at the top end of the range specified in its prospectus. The price range for the Hong Kong portion has been set at HK$2.56-HK$3.07 ($0.33-$0.39), on par with its Shanghai offering, at 2.60 yuan to 3.12 yuan ($0.33-$0.39).

The IPO has also attracted well over $300 billion in orders from institutional investors, the South China Morning Post reported quoting unidentified market sources.

ICBC plans to sell 35.39 billion ''H'' shares in Hong Kong -- stocks for a mainland Chinese-registered company listed in Hong Kong -- and 13 billion ''A'' shares in Shanghai.

If priced at the top of the range, the dual IPO will raise about $21.9 billion -- exceeding the 1998 IPO by Japanese mobile phone company NTT DoCoMo, which raised $18.4 billion.

Mainland Chinese banks have a long track record of bad debts and lending scandals, but investors have been keen to buy shares, betting that government support will limit risks while allowing them to tap into China's economic boom.

Like the two other major state banks that have already sold shares in Hong Kong, Bank of China and China Construction Bank, ICBC has restructured and wiped out billions of dollars in bad debts.

IBM said on Thursday it would move its global procurement headquarters from New York to China in an endorsement of the country's ever-growing role as a supplier to the global economy.

The company said John Paterson, its chief procurement officer, had relocated to Shenzhen, the Chinese special economic zone that borders Hong Kong.

It is the first time the company has moved the headquarters office of a global unit outside the US.

The company said the move would not affect staffing levels in the US, where it employs about 2,500 people in its procurement operations.

IBM has operated a China procurement centre in Shenzhen for more than 10 years, and also established a PC manufacturing joint venture there in the early 1990s.

The company sold its PC business to Chinese rival Lenovo two years ago and has also hived off its hard-drive business to Hitachi, but it still maintains a large sourcing operation in Asia.

IBM says it spends about 30 per cent of its $40bn annual procurement budget in Asia, and also employs more than 1,850 procurement and logistics staff in the region.

Shenzhen has successfully attracted investment from a large number of multi-national IT companies, as it seeks to upgrade its industrial base.

The government has actively encouraged low-tech industries to move out of the zone, to cheaper locations inland.

Shenzhen raised its mandatory minimum wage rates by up to a quarter earlier this year in a bid to accelerate the flight of labour-intensive businesses.

While rising labour and other costs in Shenzhen are also a concern for high-tech investors such as IBM, these are mitigated by a dense network of component suppliers that have taken root in the Pearl River Delta, as well as the region's first-rate infrastructure.