Category: Announcements


Permalink 11:50:54 am, by dacare, 481 words, 73 views   English (US)
Categories: Announcements

Global firms hike spending on R&D

As China shifts its focus to attract more foreign investment in high-end manufacturing, services and green industry to transform its economy, overseas companies are pouring in additional funds to develop research and service-based businesses in China to maintain robust growth.

Many of these opportunities also come from the country's growing demand for consumption-related products and services, diversified market channels created by the Belt and Road Initiative and free trade deals with partner countries, as well as the hunger for more homemade sophisticated industrial products.

Thanks to the government's resolve to attract more foreign direct investment this year, segments newly identified as key to sustained growth?automation,

digitalization, financial and healthcare services, aviation, environmental technologies and renewable energy businesses?are all expected to benefit.

China's key areas for economic reform and industrial upgrading will grow into new opportunities in many German companies' investment plans, said Alexandra Voss, a member of the German Chamber of Commerce's all-China board.

"Consumption-related sectors will remain hot, and sectors that get well with China's new direction of economic growth, including high-tech, services and new energy, will also see more foreign investment," said Voss.

"Due to rising labor costs and weak global market demand, China is veering towards growth reliant on domestic consumption, rather than exports," said Gao Peiyong, director of the Institute of Economics at the Chinese Academy of Social Sciences.

Gao said companies from Europe, Japan and the United States have already discovered that it is time to invest more in Chinese research and development, as well as its science and technology and design businesses.

New growth points are expected to present themselves as the economy becomes more sophisticated.

Under government policies issued in January, foreign companies will be encouraged to invest in high-end, smart and green manufacturing; to set up research and development centers; and to strengthen cooperation with domestic peers. They will also be allowed to join national science and technology programs.

US-based Emerson Electric Co opened a new measurement technology center in Beijing on November 14 to serve its automation solutions business in China and across Asia. The facility, representing an investment of $28 million, includes the company's first China solutions center for customers and a newly built and expanded manufacturing plant to meet domestic and Asia-Pacific market demand.

David Farr, chairman and chief executive officer of Emerson, said with this new center, the company will be able to engage in closer collaboration with its customers in China in helping the industry adopt digital transformation technologies, as a growing number of Chinese companies are leveraging the growth potential arising from digitalization.

Siemens AG and Ningbo-based Consinee Group also kicked off their cooperation in a project for the first intelligent factory in China's wool textile industry on Nov 27. Involving a total investment of $50 million, Siemens will help its Chinese partner build 10 pilot intelligent production lines with an annual output of 1,000 metric tons of premium cashmere yarns.

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Permalink 11:25:32 am, by dacare, 196 words, 56 views   English (US)
Categories: Announcements

Chinese firms need specialist expertise

Chinese companies will continue to see rising demand for bilingual talent, experts in Internet technology and human resources in 2018 amid globalization and China's Internet Plus strategy.

People who move to new jobs can expect an average salary increment of 10 to 20 percent while those who stay in their jobs can see a 5 to 8 percent rise in China in 2018, according to a report by Robert Walters, a global recruitment consultancy.

This year is likely to see a generally steady salary increase with an average 15 to 20 percent rise, but cooling from a rally last year.

With China being the biggest e-commerce market globally with rapid development in digital payments, automation, big data and artificial intelligence under the Internet Plus strategy, employees in information technology companies who change jobs may see a 12 to 18 percent jump in salary, according to the report yesterday.

The Belt and Road initiative and the Go Globally strategy are also driving Chinese companies to pursue bilingual professionals who have experience in international companies and understanding of local markets.

"The demand for bilingual talents is expected to rise sharply by over 50 percent in several years," said Sean Li, associate director of the Shanghai branch of Robert Walters.

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Permalink 12:59:16 pm, by dacare, 418 words, 589 views   English (US)
Categories: Announcements

Shanghai FTZ finalizes pilot program

'Parallel auto imports' will be allowed in new scheme

A pilot scheme for "parallel auto imports" in the China (Shanghai) Pilot Free Trade Zone (FTZ) has been finalized and will be rolled out soon, Xinhua reported Tuesday.

The move is expected to bring down vehicle prices and improve warranties and after-sales services.

"Parallel imports" refer to the practice of car dealers importing genuine vehicles from foreign markets to China without the permission of the manufacturer or the authorized distributor. Prices of cars imported this way are usually 15 percent to 20 percent lower than the cars imported via regular channels, as the import process is simplified, analysts said.

Details of the pilot scheme will be released soon, including the requirements for enterprises that could participate in the scheme and the institution of trade rules, Xinhua quoted Gu Jun, deputy head of Shanghai Municipal Commission of Commerce, as saying.

The State Council released a batch of measures to strengthen China's imports on November 6, including speeding up the rollout of the pilot program for "parallel car imports."

"Parallel imports" will drag auto prices to a reasonable level, Gu said.

After the State Council approved the scheme, related authorities have been working to figure out details, especially on the vehicles' quality safety and after-sales services, said Gu.

Lack of warranties and after-sales services is a major reason that consumers hesitate to buy the parallel imported vehicles. The pilot scheme aims to solve these problems.

Analysts suggest a services center be established in the Shanghai FTZ to provide registration, insurance, tax and maintenance services to cars that are imported through the pilot scheme. Furthermore, existing automobile dealership stores and auto repair shops could also be motivated to provide services to these vehicles.

Cars imported via such "parallel" channels amounted to 83,000 in 2013, accounting for 8 percent of the country's overall vehicle imports, according to data from China Automobile Dealers Association. Hu Siyu, an official with the association, expected that the number of parallel imported vehicles would rise by 32 percent year-on-year in 2014.

A total of 16 Land Rover and Mercedes-Benz cars were transported by rail to Southwest China's Chongqing on Thursday, marking the first time that China's western region has imported autos through "parallel" channels, Xinhua said Tuesday.

It took just 18 days for the vehicles to arrive in Chongqing from Germany's Duisburg. In comparison, it usually takes at least two months under regular channels, as imported vehicles are shipped to port cities such as Tianjin and Dalian first and then transported to the inland provinces, the report said.

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Permalink 11:05:33 am, by dacare, 648 words, 476 views   English (US)
Categories: Announcements, News of China

Labor laws need to be overhauled

You see them everywhere in Asia.

They push street carts selling food and drinks, sell newspapers and water on busy intersections, and collect garbage for recycling while breathing in thick black smoke from the exhausts of trucks, buses and cars.

In the countryside they tend to small plots, growing just enough food to survive.

Despite Asia's massive economic gains over the last 30 years, very little of this new wealth has managed to trickle down to the grassroots, or what economists call the "informal economy".

The millions who work in the informal economy are not covered by formal employment agreements, which are so common in developed economies.

The International Labour Organization estimates the informal economy accounts for 60 percent of Asia's workforce.

The real challenge facing governments in emerging Asia is how to improve and protect those in the informal sector who have no protection from the non-payment of wages, and who can be retrenched at any time without notice or compensation.

They work in dangerous, low-skilled jobs with poor occupational health and safety conditions. None of them are protected by social security nets.

On the other hand, the formal sector - areas such as manufacturing, financial services and technology - is suffering from a growing skills shortage.

Asia reaped huge economic benefits when manufacturing migrated from many developed countries. Low-end manufacturing has even been migrating from China.

The World Bank has said the region's policymakers need to enact "labor regulations and social protection policies to benefit all workers, including those in the large informal economy".

Christophe Duchatellier, the Tokyo-based CEO of human resources firm Adecco Asia, says there has been a "significant deregulation of challenging labor laws" in many countries in Asia.

But he says that more deregulation still needs to be done if countries are to become "competitive from a labor perspective". Duchatellier says that over the last 20 years there has been a steady shift of industrial manufacturing from the West to the East.

Much of that shift was prompted by low productivity, high taxes and high wages in the West. "Companies need to do things cheaper and faster," he says, adding that the idea of a full-time job or 'job for life' is fast becoming a thing of the past in many global and regional markets."Young people want more options and will have more employers than we did in the past."

He believes Asian universities and schools need to better prepare young people entering the workforce with the right skills to help them get jobs.

"We need to remember that for the majority of the world, education is about preparing people to get a job. More 'later-in-life' retraining and re-skilling is needed for those in sunset industries and where new technologies are emerging. And companies need to encourage more apprenticeships," Duchatellier says.

A report released earlier this year by the World Bank, East Asia Pacific at Work: Employment, Enterprise and Well-Being, said: "Asia has seen rising productivity amid a brisk structural transformation, with large movement of people into cities and higher output in agriculture, manufacturing and services."

"Countries that were poor a generation ago successfully integrated into the global value chain, taking advantage of low labor costs," the report said.

Commenting on the report, Axel van Trotsenburg, regional vice-president of World Bank East Asia and Pacific, said: "The unprecedented economic development in East Asia Pacific has provided jobs and lifted millions of people out of poverty and has been a triumph of working people.

"It's time now to consolidate growth by adopting social policies that protect people, rather than any particular sector, location or profession."

When well-designed, those policies should make sure social protection and labor regulations benefit the most vulnerable workers in society."

The World Bank said that as economic growth is moderating and labor costs are rising, "constraints of the region's current labor market and social protection policies are becoming a more pressing issue".

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Permalink 10:22:56 am, by dacare, 812 words, 751 views   English (US)
Categories: Announcements

Wal-Mart to shut down outlet in Hangzhou

A customer shops at Wal-Mart's Zhaohui store in Hangzhou on Tuesday. Wal-Mart, the world's largest retailer by revenue, decided to shut down more than 20 outlets in China this year.

Closing part of company's plan to jettison underperforming stores

Wal-Mart Stores Inc, the world's largest retailer by revenue, plans to shut down another underperforming store?in Hangzhou, Zhejiang province?in late April, while a compensation dispute with employees from an inland store that closed in March remains unsolved.

Hu Yinghua, a saleswoman at Wal-Mart's Zhaohui store in Hangzhou, said they had a meeting on Wednesday afternoon as a formal notice of the closing of the store by the end of this month.

"The informal notification came on Tuesday night via text message. We have to choose before April 23 whether to be sent to other Wal-Mart stores in the city, or leave the company with a certain amount of compensation," she said.

Hu said upper-level managers explained during the meeting that the closure was strategically necessary.

There were a few customers at the store on Wednesday, but some shelves were already empty.

Shirley Zhang, media director from Wal-Mart China's Department of Corporate Affairs, confirmed that the store will close on April 23 as a part of the company's plan of shutting down those failing to make a profit.

The multinational company has opened about 400 stores on the Chinese mainland since it entered the market in the mid-1990s. The company decided to shut down more than 20 outlets in China this year because those stores comprise about 9 percent of the total, but have contributed only 2 to 3 percent of the total sales volume from 2013 to date, she said.

"We take these moves to achieve quality of growth, and we think the strategy adjustment will help us to better meet the demands of customers," she said.

Zhang said the company has tried to make proper arrangements for the employees affected by the closures, including allowing them to transfer to any outlet in China and subsidizing their relocation expenses, including transportation and accommodations.

However, the company's retreat from Changde was not seen as reasonable or fair by most of its local employees. More than 70 out of 135 employees from the store have asked their trade union to seek better compensation from the company after Wal-Mart told the workers on March 5 that the store would be closed in two weeks.

Huang Xingguo, chairman of the Changde store's trade union, said Wal-Mart did not provide an official notification to the trade union in advance for such a vital decision as the law stipulates and failed to show due respect to its employees.

"The day they announced the closure, employees from other cities arrived at the supermarket to replace our workers. It was humiliating and discriminatory," said Huang, whom employees elected as the trade union chairman in 2013.

He said the union has asked city authorities for formal arbitration to seek workers' rights in terms of collective negotiation, higher compensation for the mass layoffs, and pay for time not worked during the dispute.

"We ask Wal-Mart to double the existing compensation, but that is negotiable if the company is willing to resume dialogue," he said. "However, the company is busy removing its assets and has refused dialogue since late March."

Huang said Wal-Mart's tough stance was backed by inappropriate intervention from the local government.

He said the district's labor department provided written material to recognize that Wal-Mart closed its store in Changde legally, and police arrested several workers who took part in peaceful protests on March 21.

A labor inspection official surnamed Tan from Changde's Wuling district, who has been working as a mediator in the case, said the situation is "complicated" and urged workers to resort to legal channels to defend their rights.

Zhang, the media director from Wal-Mart China, defended the company's moves.

"Personally, I feel sympathetic toward these workers and understand their requirement for higher compensation, but our company has to handle that in accordance with the law," she said.

But Chang Kai, head of the School of Labor and Human Resources at Renmin University of China who participated in the legislation work for the Labor Contract Law from 2006 to 2008, believes Wal-Mart lacks legal justification for its behavior.

"The Changde outlet is just a branch of Wal-Mart, so it can't terminate employees' contracts under the name of disbanding the enterprise," he said. Under Chinese law, the company needs to provide an official resolution from a shareholders meeting to legitimize its decision to end its contracts with employees.

"What Wal-Mart did is actually a mass layoff, which requires the employer to inform workers one month in advance and listen to the trade union's suggestion for staff reallocation, which Wal-Mart has failed to do," he said.

Chang also said the trade union of Changde's Wal-Mart seeking better treatment for workers is significant, as it will set an example for similar cases in the future.

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Permalink 02:01:27 pm, by dacare, 766 words, 752 views   English (US)
Categories: Announcements, Investing in China

Guangdong outlines big FTZ plans

A booth showcasing Guangdong-based businesses at an expo in Guangzhou, the province's capital. Guangdong is currently seeking central government approval of a Guangdong-Hong Kong-Macao free trade zone. Provided to China Daily

Southern province aims to capitalize on links with neighboring regions

The Guangdong provincial government has vowed to realize liberalization of trade in services in the South China province and its neighboring Hong Kong and Macao special administrative regions by this year through CEPA (the Closer Economic Partnership Arrangement).

"It is a task assigned to Guangdong by the State Council," Vice-Governor Xu Shaohua told a Monday news conference. "We are striving for the central government's approval of specific preferential projects and policies.

"At the same time, we will open up more fields for investors from Hong Kong and Macao, including those in the service sector, using a 'negative list'."

Xu also said Guangdong is currently seeking central government approval of a Guangdong-Hong Kong-Macao free trade zone.

"We are talking with ministries about the construction plan and preferential policies," Xu said.

At a joint meeting between Guangdong and Hong Kong in September, Guangdong Governor Zhu Xiaodan said that the new free trade zone will focus on liberalizing trade and building a platform for the cooperation in the high-end service industry, capitalizing on Hong Kong's reputation as a premier international finance center.

A focus on liberalizing trade in services will set this free trade zone apart from the China (Shanghai) Pilot Free Trade Zone, which focuses on financial openness, according to Lin Jiang, dean of the public finance and taxation department of Lingnan College at the Guangzhou-based Sun Yat-sen University.

"The volume of trade in services has surpassed that of trade in goods in international trade," said Lin, who also is vice-director of the university's research center of Pearl River Delta, Hong Kong and Macao.

"The Guangdong-Hong Kong-Macao free trade zone is the pilot zone in China to make breakthroughs in fields such as offering tax refunds for service exports, which are intangible goods," Lin said.

"Liberalizing trade in services also answers the province's need for upgrading and transforming its processing trade. That's why the province doesn't stress liberalizing trade in goods," said Lin, who gave as examples of modern service industries high-end design and management consultancies.

Zhu also noted at the September meeting that the new free trade zone will help adapt the mainland's financial management mechanism to international practices in Hong Kong.

Lin said it will benefit the province to make business laws and regulations according to international practices in Hong Kong, since that will be one of the free trade zone's major incentives for international investors, compared with the Shanghai free trade zone.

Xu listed several items on the Guangdong government's action plan for liberalizing trade in services in the zone. They include: relaxing or canceling restrictions on Hong Kong and Macao investors' qualifications, shareholding ratios and/or scope of business; promoting mutual attestation of professional qualifications; and exploring possible business modes for individual professional services.

"The Hengqin New Area in Zhuhai, the Nansha New Area in Guangzhou and the Qianhai experimental zone in Shenzhen are the three areas opened up for Hong Kong service industry," Xu said. "In addition, Zhongshan, Foshan and Dongguan cities are proposing platforms to attract investors from Hong Kong and Macao."

The latest announced preliminary plan of the Guangdong-Hong Kong-Macao free trade zone includes the three new areas and experimental zones plus Guangzhou Baiyun International Airport, taking up an area of more than 1,300 square kilometers, which is 47 times of that of the Shanghai free trade zone.

Lin warned that it would be a challenge for the Guangdong government to figure out a way to coordinate so many areas.

Part of the reason for Monday's news conference was to interpret the provincial Party committee's suggestions for Guangdong's implementation of the central government's comprehensive reforms.

The suggestions were approved by the Third Plenum of the 11th General Assembly of the Guangdong Provincial Party Committee, held last weekend in Guangzhou.

"To further open up the province, Guangdong will also strengthen its cooperation with the US and European developed countries by establishing overseas offices of economic trade in these countries," Xu said, adding that an office in Germany already has been set up.

"This is to get in touch directly with big multinational corporations to attract investments and technologies that will assist in upgrading and transforming Guangdong's economy," he said.

Guangdong, the largest Chinese trader for ASEAN countries, also will further promote its foreign trade with these countries and spearhead the central government's strategy of building the Maritime Silk Road of the 21st century.

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