Archives June 2007

Over foreign opposition, China passes law meant to protect workers

BEIJING // China’s legislature passed a sweeping new labor law yesterday that strengthens protections for workers across its booming economy, rejecting arguments from foreign investors that the measure would reduce China’s appeal as a low-wage, business-friendly industrial base.
The new labor contract law, enacted by the Standing Committee of the National People’s Congress, requires employers to provide written contracts to their workers, restricts the use of temporary laborers and makes it harder to lay off employees.

The law, which is to take effect in 2008, also enhances the role of the Communist Party’s monopoly union and allows collective bargaining for wages and benefits. It softens some provisions that foreign companies said would hurt China’s competitiveness but retains others that American multinationals had lobbied vigorously to exclude.

The law is the latest step by President Hu Jintao to increase worker protections in a society that, despite its nominal socialist ideology, has emphasized rapid capitalist-style economic growth over enforcing labor laws or ensuring an equitable distribution of wealth.

But it could fall short of improving working conditions for the tens of millions of low-wage workers who need the most help unless it is enforced more rigorously than existing laws, which already offer protections that on paper are similar to those in developed economies.

China, India pose different hiring challenges: survey

By Susan Fenton

HONG KONG (Reuters) – Multinational companies in China have a hard task hiring people with leadership skills while in India they face unreasonably demanding fresh graduates, a survey shows.

The fast pace of business expansion in Asia’s two emerging economic powerhouses has created a talent shortage and a host of challenges for employers.

“Staff are impatient and there are a lot of jobs out there,” said Shalini Mahtani, chief executive of Hong Kong-based Community Business. “If companies are not providing good career opportunities, staff will leave.”

Community Business, an organization promoting corporate social responsibility, conducted the survey in Shanghai and Mumbai with Schneider-Ross, a UK-based business consultancy.

Pay is still important as staff in China have no qualms in leaving a company to pick up a higher salary elsewhere, according to the survey. In India, employers say younger professionals are demanding excessive compensation packages, inflated job titles and immediate opportunities for overseas assignments.

One multinational talked of a fresh graduate who came for interview saying he had four job offers on the table and how could the company better that. Such demands were not unusual, the company said.

Pay is talked about openly in India and employees are liable to switch jobs if they know that their fellow graduates from business school are earning more. This makes it difficult for companies to reward good performance, survey participants said.

In China, competition for staff is so acute that one company reported losing a junior member of staff to a local company that more than doubled her salary and offered a position for which she did not have any experience.

The survey interviewed 25 senior managers and HR directors at foreign companies in Shanghai and Mumbai and conducted a focus group in each of the two cities.

A lack of leadership skills among staff poses a real challenge in China and many employees there leave a company because of the attitude or behavior of their boss, survey participants said.

Western multinational companies are no longer routinely seen as the preferred employer, as staff in both countries often see local companies that are expanding globally as a better opportunity to gain visibility and climb the career ladder. Multinationals now are having to approach second and third tier colleges for staff.

Diversity in the workforce, whether by gender, generation or culture, is also difficult to implement because local managers either are not sensitive to the issue or business is growing so fast they have no time to focus on it.

In India stereotyping of women is still common.

“There’s an assumption that women will get married and they’ll leave the workplace,” said Mahtani.

In China, poor leadership skills means companies often havean.

State Grid Corp launches worldwide recruitment plan

BEIJING, June 28 — State Grid Corp of China (SGCC), the nation’s largest electricity transmission company, yesterday launched a worldwide recruitment plan for its five research and development (R&D) institutes.

Under the plan, the company will recruit 100 top scientists for its R&D work, including four academicians.

The five R&D centers are China Electric Power Research Institute, Nanjing Automation Research Institute, Beijing Electric Power Construction Research Institute of SGCC, Wuhan High Voltage Research Institute of SGCC and State Power Economic Research Institute.

The five institutes now have 2,699 staff members, including four academicians.

“The move will increase the company’s R&D capabilities. Last year, we made many breakthroughs in the R&D field,” SGCC said in a statement.

The company last year started to build China’s first ultra-high voltage (UHV) transmission line. The pilot project will see 1,000 kilovolts of alternating current linking the southeastern part of Shanxi Province with Jingmen city in Hubei Province, passing Nanyang city in Central China’s Henan Province.

(Source: China Daily)

Sales Engineer¨C Channel

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China to Enact New Labor Law

BEIJING — Abundant low-cost labor has fueled China’s economic boom. But alongside the success stories of bustling factories and surging foreign investment are widespread complaints of unpaid wages, forced labor and other abuses.

When Beijing set out to tackle those problems by proposing a new labor law in 2005, it ignited a heated debate, prompting warnings that the measure might hurt the economy and accusations that U.S. and other foreign companies wanted to erode workers’ rights.

This week, after 18 months of deliberation and a rare government request for public comment on the law, legislators are expected to enact a final version that is meant to set standards for China’s rapidly changing labor market.

The law, the most significant change in Chinese labor rules in more than a decade, would set standards for labor contracts, use of temporary workers and severance pay.

The change reflects Beijing’s willingness to balance its desire for investment against the need to improve conditions for workers at a time of rising tension over a growing wealth gap, said Ronald Brown, a specialist in Chinese law at the University of Hawaii.

“The question facing the decision-makers often has been, ‘What will happen if we have hard enforcement? Will that scare people away and take away our competitive advantage?'” Brown said.

“I think the government has been listening and seeing that maybe it’s not going to hurt its competitive advantage, and that it’s time, and it’s important for social stability.”

The law was proposed in December 2005 amid complaints that companies were mistreating workers by withholding pay, requiring unpaid overtime or failing to provide written contracts.

Many complaints are directed at Chinese employers or smaller companies run by foreign entrepreneurs. Major Western companies are regarded as offering the best pay and working conditions. But state media are quick to publicize accusations of misconduct against well-known American and other Western employers.

In April 2006, the government published the first draft of the law and asked for public comment, an almost unprecedented step in a communist system where most lawmaking takes place in secret.

It received more than 190,000 responses from workers and Chinese and foreign companies.

Foreign business groups expressed alarm at proposed restrictions on firing workers, limits on use of temporary workers and a provision giving the All-China Federation of Trade Unions _ the umbrella group for unions permitted by the communist government _ a voice in staffing decisions.

The law is “like going 20 years backward,” said the monthly magazine of the American Chamber of Commerce in Shanghai, which represents 1,300 U.S. companies. The U.S.-China Business Council warned that restrictions on temporary employees would be “prohibitively expensive.”

Labor activists reacted angrily to the foreign lobbying. The U.S.-based group Global Labor Strategies dubbed companies involved the “sweatshop lobby” and accused them of pushing Beijing to “weaken or abandon significant pro-worker reforms.”

Apparently stung by that criticism, the European Chamber of Commerce in China backed away from earlier criticism of the law, declaring in December that it “stands firmly behind the Chinese government’s efforts to improve working conditions.”

The business comments appear to have prompted Beijing to remove the most contentious provisions. The third draft of the law, the latest version released, no longer requires approval from the official labor body to fire workers.

The Standing Committee of the National People’s Congress, China’s parliament, votes Friday on a fourth version, and its press office said its law committee recommended approval.

The American Chamber of Commerce in Shanghai declined to comment on the latest draft but its chairman, James Zimmerman, expressed thanks to the government for accepting comments.

“We are pleased that the Chinese government has allowed public participation in the law-drafting process, and believe that this has been a constructive exercise in transparency,” Zimmerman said in a written statement.

The proposed law adds to a series of government steps to update China’s legal and political systems to keep pace with explosive economic and social change.

A law passed in March ended two decades of blanket tax breaks for foreign investors, equalizing their rates with those paid by Chinese companies.

The All-China Federation of Trade Unions has been setting up branches at hundreds of foreign companies in a campaign launched last year.

The ACFTU often is regarded not as an advocate for better pay and working conditions for employees but as an intermediary that represents employers to workers.

But if the proposed labor law is enacted, it could force the body to act more like a Western-style union by giving it formal responsibilities to stand up for workers, Brown said.

“As these new laws are enforced,” he said, “the labor union is likely going to have to accept a larger role as an adversary and an advocate, negotiating better conditions for its members.”

On Wednesday, China announced a new crackdown on illegal labor practices following an outcry over revelations of slave labor at brick factories in the country’s central provinces.

The two-monthlong inspection campaign starting next week will focus on small-scale kilns, coal mines and workshops, according to a statement posted on the central government’s official Web site.

Officials have been ordered to “fix illegal labor practices, attack illegal criminal behavior, conscientiously protect the personal interests of the broad masses of the people, and resolve … problems of the protection of the rights of migrant workers,” the statement said.

China has been in the throes of a slavery scandal that has unleashed a flood of negative publicity against officials in Shanxi and Henan provinces. Hundreds of children and adults were abducted and sold to brickyards in those areas. Operators, often acting with local government protection, beat, starved and forced workers to labor long hours without pay.

Nearly 1,000 workers have been released following police raids in recent months, prompted in part by accusations posted on the Internet that authorities were ignoring such practices.

How to fix service at Chinese banks? Yup. Up wages. Hire more tellers

MUCH has been said recently about domestic retail banks doing all they could to pacify unhappy customers who suffer long hours of waiting in line.

Major domestic banks are now three months into their campaign to improve their customer service. I decided to make some observations to see if what we read and hear are what we get.

My first stop was at a China Construction Bank branch in Shanghai. Certainly fewer customers were in queue but only two counters were open during lunch hours. Behind the two cashiers were empty chairs.

Why do the bank’s staff have to go for lunch together? Must lunch hours for retailers be the same time as for the customers, who obviously have less than an hour to return to their workplace?

As I planned to withdraw 3,000 yuan (US$394), I happily queued at the ATM behind a guy whom I later believed came from another city.

I walked off after waiting more than 15 minutes and made a suggestion to the floor manager. You see, this chap seemed to have an unlimited number of ATM cards and the beauty of it was that he probably did not realize he could withdraw a maximum of 2,500 yuan at one go. He kept punching in 500 yuan per withdrawal.

I then made my pilgrimage to Sichuan Road. Amazingly, the Industrial and Commercial Bank of China there was closed for lunch.

Finally, China Merchants Bank’s main hall was less crowded and the service speedier.

It seems that Shanghai has a dire shortage of cashiers – tellers. I can think of only one solution.

Yup, up their starting wages and reward the good and faithful ones.

Coach Targets China Via New Hire

There are an estimated 1.3 billion people living in China. The suits over at Coach hope their newest hire will help all those folks line their closets with high-ticket handbags, scarves and patent leather belts.

Coach (nyse: COH – news – people ) has named Thibault Villet, formerly of L’Oreal, as President of Greater China. Villet was Vice President, Luxury Products Division in Japan at L’Oreal for 13 years. He was also Vice President, General Manager of the Luxury Products Division for China from 2002 through 2006.

Margaret Mager, an analyst at Goldman Sachs, says Villet’s hiring highlights Coach’s growing commitment to developing its presence and brand awareness in China, its next great market.

Mager said Coach plans to open at least 20 additional locations in Greater China during the next three years. Currently, there are 43 Coach locations in Greater China, with 19 in Taiwan, 12 in Hong Kong, and 12 on the mainland.

Though Villet’s hire is unlikely to impact near-term fundamentals Coach continues to lay the foundation for long-term growth in the global accessories market, Mager said.

In morning trading Wednesday, shares of Coach increased 1.1%, or 50 cents, to $47.98.

Beijing to recruit record 22,000 Olympic torch bearers

Beijing – Organizers of the 2008 Olympics on Saturday unveiled plans to recruit nearly 22,000 torch bearers for next year’s torch relay, almost double the number taking part in the Athens 2004 torch relay.

The Beijing organizing committee (BOCOG) will start recruting 21,880 torch bearers from Saturday, including 19,400 from mainland China, Zhang Ming, the director of BOCOG’s Olympic Torch Relay Centre, told reporters.

The previous highest number of torch bearers was 13,300 for the 2000 Olympics in Sydney. Atlanta in 1996 had almost the same number as Sydney, while Athens recruited 12,102. Montreal in 1976 used just 1,214 torch bearers, BOCOG said.

‘Under the theme of ‘Journey of Harmony’ and slogan ‘Light the Passion, Share the Dream’, the torchbearer selection programme aims to involve the public participation in a most broad and extensive way.’ Zhang said.

‘It will recruit a group of torchbearers who are most deserving and worth of carrying the Olympic Flame within their communities,’ she said.

Among the selction criteria, all torch bearers must ‘patriotic and dedicated to the Olympic Movement’, have contributed to the ‘building of a harmonious society’, and be ‘distinguished for remarkable feats in his or her profession or community’, Zhang said.

According to Olympic tradition, the Olympic flame will be lit in ancient Olympia, Greece, on March 25, 2008.

The torch relay will travel across Greece to the Panathinaiko Stadium in Athens, the site of the first modern Olympic Games in 1896.

A handover ceremony will be held in the stadium before sending the Olympic flame to Beijing on March 31, 2008.

One torch will carry the flame to dozens of cities in five continents, while a special high-altitude torch will carry the flame to the 8,844-metre summit of Mount Everest in May.

The torch relay will culminate in the lighting of the cauldron in the Olympic stadium at the August 8, 2008, opening ceremony of the Beijing Games. The last torch-bearer is one of the best-kept secrets at Olympic Games.

BOCOG listed Taiwan in the torch relay route that would include the island state under political conditions that it deemed unacceptable.

Jiang Xiaoyu, the BOCOG executive vice president, on Saturday said he still hoped Taiwan’s leaders would accept an agreement that he said the island’s Olympic officials had made.

Taiwan objected to China’s listing of Taiwan in the route immediately before the Chinese territories of Hong Kong and Macau, which are followed by a succession of Chinese mainland cities, saying Beijing could attempt to portray the island as part of its domestic leg.

China’s great wall of job discrimination

HONG KONG – Although the Chinese Communist Party still upholds the late leader Deng Xiaoping’s policy of “building a socialist market economy”, today’s China in fact has the ugly features of unbridled capitalism at its early stage. One such feature is social injustice. And one of the rampant malpractices of social injustice is discrimination in employment.

While China now suffers a shortage of talents and skilled workers

in certain fields such as high technology, finance or management, the labor market in the country in general is still dictated by oversupply of labor given its huge working population. This enables employers to become very picky in hiring workers by setting up various discriminatory requirements. And job discrimination is found not only in the private sector but among government departments and government-related institutions as well.

In August 2005, the Standing Committee of the National People’s Congress, China’s parliament, ratified the International Labor Organization’s Discrimination (Employment and Occupation) Convention, 1958. But surveys last year and recent media reports show discrimination in employment still runs rampant in the country.

Between May and October 2006, Cai Dingjian, a professor with China University of Political Science and Law, led a team to conduct a survey on job discrimination in 10 major Chinese cities – Beijing, Guangzhou, Nanjing, Wuhan, Shenyang, Xian, Chengdu, Zhengzhou, Yingchuan and Qingdao. The results show that discrimination in employment is a serious problem in China. Some 85.5% of the respondents said there is job discrimination, and more than half of all the interviewees said the discrimination is “very serious” or “considerably serious”.

The poll finds that the most victimized are the disabled. About 22% of the disabled interviewees said their job applications had been turned down. Next are people with low education (18.7%) and then job-seekers who do not have local hukou or residency registration.

And employers do not hide their discrimination against the disabled, as 51.3% of the interviewed employers said that when they turn down job seekers for health reasons, they frankly say so to them.

More striking, 65.9% of the respondents say there is discrimination in the recruitment of civil servants. Excuses for the discrimination are low education (45%), absence of a local hukou (43%), disability (40.9%) and other health problems (40.7%).

“It may be reasonable for government departments to set education requirements for their employees. But it is by all means discrimination to require an applicant to have a local hukou. Does where one is from have anything to do with his or her capability to work in a government department?” Cai told the media when releasing the survey.

Moreover, he said it has been found that in some cases of civil-service recruitment there were discriminatory requirements regarding the applicants’ sex, height and appearance. “Many courts demand [that] applicants have dignified features, saying this is to show the dignity of the law. This is nonsense,” he said. An ongoing court case serves a good illustration in this regard.

Last June, the personnel and labor authority of Tiantai county, Zhejiang province, put up a notice to recruit three clerks for the local court. Hu Binbin, a 24-year-old local woman who had been working in the court as a part-time clerk for three years, filed an application. She failed to pass the physical examination because she was a bit shorter than the 158 centimeters required by the court. Hu then filed a lawsuit with the county court against the personnel authority for job discrimination, as no law and regulation sets a requirement on height for a court clerk.

Hu lost her case in the first trial. She then appealed to the Intermediate Court of Taizhou city, whose jurisdiction covers Tiantai county. The court hearing was held this April and the court has yet to pass down its ruling.

If there is such serious job discrimination in government recruitment, it is not hard to imagine how rampant the malpractice is in the private sector. And not only ordinary laborers but university graduates now also suffer discrimination in employment.

The rapid expansion of higher education over the past decade has resulted in an oversupply of university graduates, particularly those in humanities, arts and social sciences. Official statistics show that nearly half of the graduates could not find jobs after graduation last year. As a result, university graduates, who used to be regarded as “sons and daughters of heaven” and who never worried about employment, now also suffer discrimination when they compete with one another for jobs. According to a survey co-sponsored by China Central Television, 74% of job-seeking university graduates say they are discriminated against.

For university graduates, sexism is the most common form of job discrimination. Employers normally prefer men to women when they have a choice. Another survey co-sponsored by Sina.com showed that 60% of female graduates interviewed said they had more difficulty finding employment than their male competitors.

A boss of a trading company in Shenzhen does not hide his sexist view, saying it is out of “practical concerns”. “I prefer hiring male staffers. A female university graduate would soon get married after taking a job. Then she would get pregnant and give birth to a child, taking a long leave. Afterward her mind would be occupied with her baby and could hardly concentrate on her work even during office hours. It’s troublesome. In contrast, a male employee normally would be more career-oriented,” he said, declining to be named.

There are now even cases that job seekers from the one-child generation are discriminated against. A civil servant from Tianjin municipality complains that his only son’s job application has been rejected by several large state-owned enterprises, which all say, “We don’t consider single-child applicants.” The reason? Single children born after 1980 are generally spoiled, are unable to endure hardships, and cannot get along with others.

“Such discrimination is openly defiant against the one-child policy, which is a national policy backed up by law. The government must do something to stop such illegal practice,” the civil servant said.

But since most youngsters in their 20s today are single children, how do these enterprises find employees? “They would look for university graduates from farmers’ families, as the one-child policy is not carried out to the letter in the countryside. And even a single child from a farmer’s family may be considered less spoiled,” he said.

Job discrimination runs rampant because there is no legal protection for equal opportunity in employment. China’s constitution stipulates, “Citizens enjoy equal right of employment.” The Labor Law says, “Laborers enjoy equal right of employment and selection of jobs” and “Laborers shall not be discriminated against because of their ethnicity or religious beliefs.” Except for such vague stipulations of principle, there is no detailed legislation on what should be banned as job discrimination.

China’s fast economic development over nearly three decades has greatly benefited from globalization. To cope, the country has been trying to adapt to international practices by ratifying international covenants and conventions such as the Discrimination (Employment and Occupation) Convention, 1958. But after signing and ratifying such documents, China has rarely passed the necessary legislation for their implementation.

The International Labor Organization convention has a clear-cut definition of what constitutes job discrimination. If the Chinese government is serious about implementing the convention, it should work out detailed laws and regulations. Only in this way can the constitutional right of Chinese citizens to equal job opportunities be truly and fully protected.

Competition is the Driving Force of China’s Resurgence

The weather is scorching hot in Beijing these days. The mercury has soared to a 30-year high. The Chinese call the heat at this time of year the “college admissions heat wave,” kind of like our own “college admissions cold snap.” (The SAT in South Korea is held in winter.) The Gaokao, the Chinese version of the SAT, is conducted at the beginning of summer every year, and ten million students, the largest number ever, took this year’s Gaokao last Thursday and Friday. Before their scores are released on June 25, they still have to take a physical strength test. It feels as if the already hot summer has become all the hotter because of the Gaokao.
Chinese colleges recruit their freshmen based solely on Gaokao scores, without consulting school records. Chinese parents pay extreme attention to their children’s education, starting from elementary school, to make sure they get into the top schools. A college professor in Beijing said that some families pack and move every few years to the most prestigious school districts so their kids can go to the best schools. Before the Gaokao, families go to hotels to snap up “college admissions specialty,” a special food prepared with rare ingredients that are supposed to enhance brain activity. Some parents stock up on wonder “study drugs” from special pharmacies, while others head to Buddhist temples to pray for 100 days. One temple even sells incense bundles specially made to bring good luck for admissions for 99,999 yuan (US$1= CNY7.66).

This year marks the 30th anniversary of the revival of the Gaokao, which was suspended for 11 years during the Cultural Revolution (1966-1976). Mao Zedong abolished the exam as a bourgeois breeder of elitism. During the Cultural Revolution, only party loyalists and workers and peasants — people with the “proper background” — were admitted to colleges.

But in 1977, Deng Xiaoping, who had resumed power, revived the Gaokao and removed the barriers of class background and party fealty from the college admissions system. These days the revival of the Gaokao is seen as a turning point in the history of modern China, one of the steps on the path to becoming the competitive nation it is today. The Nanfang Daily, one of the three biggest newspapers in Guangdong, wrote, “China’s history has changed thanks to Deng’s courage and foresight.”

In 1977, the first year the Gaokao was revived, 5.7 million students took the test; only two percent were admitted to colleges and universities. Among them were a brickyard worker who was more than 30 years old and housewives with two or three children. These were young people who had prepared for their future despite the hardships of life on farms or in factories during the dismal Cultural Revolution days. The competition was just as fierce the following year. The students, many of whom were older, had studied harder than any other generation. These people have since become the backbone of today’s newly-emergent China.

Among them are Li Keqiang, secretary of the Communist Party of China’s Liaoning Provincial Committee who is believed to be the likely successor to President Hu Jintao, and Bo Xilai, the minister of commerce of the world’s third-largest trading power. Also from this generation are world-renowned film directors Zhang Yimou and Chen Kaige, both of whom have brought Chinese film-making to the international level. Many famous scholars hail from this generation, including Wang Jisi, dean of the School of International Studies at Peking University and a foreign affairs advisor to Hu, and Yi Zhongtian, a professor at Xiamen University who has created a boom in classic Chinese literature with the publication of his book “Pinsanguo.” Chinese websites distribute e-books that teach about the school days and study methods of the famous students of those two special years, 1977 and 1978. The media is encouraging the younger generation to learn about their seniors’ enthusiasm for education and teaching them that competition is good.

China’s current resurgence is the outcome of all this competition. Meanwhile, South Korean politicians are attempting to replace academic competition with a standardized and equalized education system, with the idea that competition is bad. They should look to China to understand the mistakes they are making.