Archives 2008

China’s Urbanization Means Rich Rewards for Business

By 2030, 1 billion consumers will live in China’s cities. Chinese and global companies are well aware of the huge size and potential of this emerging urban market. But businesses should shift their sights from a panoramic view of the opportunity to a close-up of the dynamics of urbanization. To be successful, they need to keep pace with the rapidly changing managerial strategies that city leaders are employing as their cities expand.

China’s urbanization is largely a local phenomenon. City mayors are the most powerful movers and shapers of the process. Their effectiveness—or lack of it—should be a key component of companies’ strategic planning for the Chinese market. New research by the McKinsey Global Institute (MGI) argues that business has a chance to play a key role as cities mature. Companies can bring not only capital but also an infusion of knowledge and can help guarantee greater efficiency and productivity from major public projects.

The scale of the urbanization phenomenon is startling. MGI estimates that, between now and 2025, China’s cities could pave 5 billion square meters of roads and build up to 170 new mass-transit systems (twice the number that all of Europe has today). By 2025, cities will construct 40 billion square meters of floor space in 5 million buildings, of which up to 50,000 will be skyscrapers—the equivalent of building up to two Chicagos every year. The incremental growth alone in urban China’s consumption between 2008 and 2025 will be equivalent to the creation of a new market the size of Germany’s in 2007.

HUNGRY FOR ENERGY
On current trends, energy demand is set to more than double, requiring massive expansion in capacity—as much as 1,200 gigawatts of extra capacity between now and 2025, MGI estimates. China’s freight volumes—largely carried by road—will quadruple by 2025. Beijing has recently allowed the private sector to participate in infrastructure building (such as toll roads), mainly in joint ventures with local governments or state-owned enterprises.

China’s huge growth as a consumer market and its mega-sized infrastructure projects will doubtless offer rich rewards for business. Yet multinational corporations have tended not to look much beyond China’s fast-growing eastern seaboard. In the next decades, however, it is China’s midsize cities where most of the burgeoning middle class will live and where most residential construction growth will occur.

Some cities haven’t even touched the edges of business’ radar screens. During the course of MGI’s research in China, we “discovered” an additional 195 urban centers that China does not designate as cities, but which are cities in terms of size, population, and stage of development. They are also growing rapidly. These cities could have substantial future commercial potential, and they illustrate the importance of looking beyond China’s most high-profile economic powerhouses.

Pinpointing opportunities geographically is one aspect of any entry or market expansion strategy. Keeping pace with the evolution of urban development strategies is another. Cities that have spent the past 20 years or more maximizing their gross domestic product growth at virtually any cost—environmental and social—now face a heavy investment bill as they seek to mitigate the pressures that have mounted. Pollution and congestion are reaching critical proportions in many cities. This will provide openings for innovation in areas such as energy conservation, water recycling, and clean technology, not least in power generation and transportation.

MAXIMIZING EFFICIENCY
Beyond firefighting today’s intensifying urban stress, China’s city leaders know that they face a monumental managerial task as they seek to absorb an additional 350 million more urban dwellers by 2025, of whom 240 million will be migrants. Many cities are already thinking creatively about how to meet this challenge through policies that boost the efficiency or productivity of urban expansion—the efficiency of resources, of urban and transport planning, and of administration.

Business has an opening in helping mayors to fix not only the “hardware” but also the “software” of cities. Local governments have already shown themselves willing to enter into partnership with the private sector, including multinationals. Take training: A number of Chinese and multinational companies have instituted internship and training programs at the city level, aimed at raising graduate quality, in conjunction with provincial and city governments. Zhejiang province has encouraged private capital to invest in education, making funding more efficient and thereby producing improved results in terms of graduate employment rates for less money than richer provinces.

A nationwide program of “urban productivity,” replicating vanguard cities’ best practice and innovation across China, could save $220 billion in public spending by 2025, cut sulfur dioxide and nitrogen oxide emissions by upward of 35%, and halve water pollution. Business has the potential to play a partnering and enabling role in delivering these significant benefits—opening up new market opportunities for themselves in the process.

China’s fourth-quarter job outlook weaker-Manpower

BEIJING, Sept 9 (Reuters) – China’s employment outlook is dimming for the rest of 2008, but post-quake reconstruction will increase jobs in the west of the country, Manpower Inc (MAN.N: Quote, Profile, Research, Stock Buzz) said in a survey released on Tuesday.

A poll of 4,014 employers in nine major cities showed China’s net employment outlook — the difference between firms adding jobs and those cutting them — was a positive 12 percent for the fourth quarter, the employment services provider said.

But the reading, which is seasonally adjusted, was down 3 percentage points from the third quarter and 1 percentage point from a year earlier.

Lucille Wu, managing director of Manpower Greater China, said job seekers in the services sector were most likely to feel the pinch as companies cut temporary workers after the Olympic Games, although the overall impact would be limited.

The survey’s reading for the services sector was unchanged from the third quarter but was down 2 percentage points from a year earlier.

Wu said a slew of government measures, including more bank loans and tax breaks, to help the local economy recover from May’s devastating earthquake in Sichuan would encourage hiring in western cities such as Chengdu and Xi’an.

Optimism among employers in Chengdu was at a record high, the survey showed.

Elsewhere, hiring prospects weakened across the Asia-Pacific, according to Manpower, while the U.S. jobs outlook fell to its lowest level since 2003 as growth slowed due to the still unfolding financial crisis. Please click on [ID:nN08468275] for a related story. (Reporting by Langi Chiang; Editing by Alan Wheatley and Ken Wills)

China state executive posts attract rising number of applicants

BEIJING, Sept. 12 (Xinhua) — More than 2,700 people have applied for 16 executive positions of the centrally-administered state-owned enterprises (SOEs) open for public competition this year, the State-owned Assets Supervision and Administration Commission (SASAC) said.

The 2,745 applicants more than doubled that of those applying for last year’s 22 posts.

Of this year’s available posts, six received 200 to 300 applicants for each.

SASAC said the positions included three general managers, 10 deputy general managers and three chief accountants from different industries. They covered electricity, metallurgy, electronics, chemical engineering and trade firms.

China FAW Group Corporation, China Baosteel Group and China Southern Power Grid, all ranked among the world’s top 500 companies, were also recruiting.

SASAC also said 383 applicants, 12 from overseas and four from Hong Kong, Macau and Taiwan, met the qualifications. They have been notified to sit for a written exam to be held soon.

Most qualified applicants have post-graduate degrees and are aged under 45, while 140 currently are heads of enterprises. In addition, 69, or 18 percent, have overseas working or study experience.

In 2003, SASAC started to recruit from both home and abroad. The agency hoped such managers could help improve the competitiveness of SOEs in the global market.

China’s efforts for labour balance

CHINA’S monetary policy will not shift substantially in response to the global downturn. But employers in China should increase wages by 10 per cent in order to attract workers as the labour surplus disappears.

These are among the rare insights opened, through China’s leading business publication, Caijing magazine, into the economic advice the country’s leaders are being given as they face multiple challenges.

Cai Fang, director of the Institute of Population and Labour Economics at the prestigious Chinese Academy of Social Sciences, has spoken to the magazine about his message to Premier Wen Jiabao and the State Council, China’s cabinet, during a closed-door meeting with eight leading economists.

He said: “We talked about whether economic growth will slow, how to contain inflation and stimulate growth, and whether China should maintain its tight monetary policy.”

China’s economists, he said, “are split on the two major macro tasks: fighting inflation and stimulating growth. However, we generally agreed that monetary policy should remain as it is. We should neither loosen it nor tighten it further.”

Cai said officials at the State Council were especially concerned about the extent to which the slowdown of gross domestic product growth — from 11.9 per cent in 2007 to 10.4 per cent in the first half of 2008 — will hurt employment. “Should we retain the growth momentum to ensure high employment rates?” This, he said, was his main focus. “The growth rate is flattening out, while unemployment is climbing.”

In the last quarter, ending June 30, registered urban unemployment reached 4.1 per cent. Clearly it was rising, he said. Before this year, it was declining.

“A few years ago, China’s registered unemployment rate didn’t reflect the real situation because it excluded laid-off workers. But the number of laid-off workers has largely been reduced in recent years due to the Government’s re-employment efforts. Now the registered rate is close to what it is in reality.”

But in China, he said, “economic growth and employment are not closely related. One reason is that Chinese policy favours large size companies. The preference became even more obvious when the Government adjusted its macro-economic policies recently.”

Companies receiving government backing, he said, “are usually enterprises with high profits, low emissions, low rates of pollution and less reliance on resources. In reality, they are big companies, especially state-controlled ones, equipped with better technologies.”

His institute surveyed 17 industries and found that capital-intensive companies, most of which are large firms, contribute substantially to GDP growth but are not so impressive in terms of creating new jobs.

Last year, the control of credit was tightened in both quantity and quality. Better risk controls and higher earnings were required for lending, and that situation diverted loans toward larger companies and away from small ones because, he said, “lending to them became even riskier”.

Most unemployment, he said, is structural rather than cyclical. Coupled with the low employment rate of college graduates, the rate even shows signs of rising.

Cai said private companies, most of them small and medium-sized, had played an important part in absorbing labour displaced by massive lay-offs from state-owned factories.

But “the current economic slowdown, however, has hit them hard. And statistics tend to miss unemployment in these sectors”, with migrant workers not being registered at all.

Tight monetary policy was not good news for such businesses, he said. “Historically, it’s hard for these companies to borrow from banks, and they turn to the market for financing.” With the central bank issuing the commercial banks with firm instructions to tighten lending, the SMEs tend to borrow privately from “grey” sources, which “leads to skyrocketing interest rates”.

Tax revenues rose rapidly in the first half of 2008, he said, so, in compensation for the adjustments required from vulnerable businesses, “it’s widely agreed among scholars that we can cut tax rates a bit.

“There are needs for more government spending — natural disasters hit China one after another, and we just hosted the Olympics. And it might want to set aside some money for a rainy day.”

However, “nobody is speaking on behalf of SOEs and advocating low taxes”.

China has no nationwide social security system, he says. Some provinces don’t even have a province-wide social security net. “That leads to many migrant workers withdrawing from the social security system. Why? For instance, in the pension system, workers pay 8 per cent of their salary and companies match it.”

In seasonal, labour-intensive industries, workers finish their terms and leave the job for good. But their social security benefits can’t go with them. So they have to withdraw from the system, taking back their own contributions, while the company’s contribution stays within the system.

“So there is no upside for workers to join the pension system, and for companies it creates a financial burden,” he said.

“Officials from inland provinces complain that coastal provinces have seen a fast increase of social security funds because they not only siphoned labourers from inland but social security funds as well.”

Cai said that migrant workers’ insurance provisions should be portable and nationwide. When workers retired, they should be able to receive both their own contributions and those from their employers. “China’s development has reached a stage where labour shortages are occurring, and the labor supply-demand equation is changing. That requires a rise in salary and other benefits.”

He backed the new Labour Law that came into effect on January 1, and which has come under attack from some employers, saying wages should rise by some 10 per cent.

“I think we should stick with the new law,” he said. “There are problems with enforcing it, which were not created by the law itself but by a lack of support measures.

“Companies feel overburdened, partly because of the inadequate social security system. This is not the fault of the Labour Law. If a company can’t bear a modest rise, it is not competitive except as a sweatshop. We should let such companies die, if they have to.”

In developing countries, he said, sometimes when laws are made to protect workers the result is higher unemployment. “The unlimited supply of labour in developing countries is to blame.

“India is one good example. Research shows that economic development levels in different parts of India are directly related to their labour policies, and those which have tight labour regulations often lag in economic development.”

The reason that Cai backs the Labour Law is that labour in China is moving from a surplus to a relative balance. “There must be some kind of incentive to spur labour supply and attract workers,” he said.

Financial & Management reporting Director (fi190sh)

Job Title: Financial & Management reporting Director
Job Description:
Company introduction:
Our Company is the first European life insurance joint venture established in China. The company is jointly invested by the German financial service conglomerate .As one of biggest
Report To: Head of A & F
Location: Shanghai
Responsibilities:
1. Develop and build a professional team
2. Be responsible for automatic reporting system setup;
3. Be responsible for financial reporting related SOP setup
4. Be responsible for SD financial templates preparation
5. Monitor investment related back office functions: Settlement of investment transaction, reporting
6. Subsequently manage the production of the monthly and quarterly financial reports (incl. PRC GAAP and IFRS) submitted to company’s top management/ our Asia Pacific regional office in the most efficient manner whilst maintaining a high level of quality control and data integrity;
7. Assess the impact of any new financial reporting requirements on the company and ensure that results are well understood
8. Address reporting issues with relevant departments’ incl. IT to ensure the accuracy and integrity of financial data.
9. Lead or participate in investment accounting or reporting related projects
Requirements:
1. Minimum bachelor degree with major in accounting, finance related
2. Minimum 8 years working experience in insurance company with at least 3 years people management experience
3. Sound knowledge of IFRS /GAAP reporting requirements, CPA or CFA preferred
4. Good speaking & written English skills, good computer skills
* Please send us your complete resume (both in Chinese and in English to: ‘topjob_fi190sh@dacare.com'(Please replace “#” with “@”)
* In the email subject MUST you plus the position name ?in either En or Ch ?

Financial planning & controlling director (fi189sh)

Job Title: Financial planning & controlling director
Job Description:
Company introduction:
Our Company is the first European life insurance joint venture established in China. The company is jointly invested by the German financial service conglomerate.
Report To: Head of A & F
Location: Shanghai
Responsibilities:
1. Develop and build a professional team
2. Be responsible for managing and controlling cash resources including cash flows, foreign exchange, banking activities and other treasury functions
3. Be responsible for monitoring and identifying individual product/project costs in comparison to targets and recommending areas for cost improvement
4. Be responsible for budget modeling setup, foundation system build up (by channel, in multilevel) and regular supervision etc
5. Be responsible for preparing, submitting, and presenting annual budgets
6. Be responsible for monitoring the national-wide cash management and budget controlling
7. Be responsible for monitoring actual expenses vs. budget
8. Understand current finance management procedures and find problems, lead related projects to solve the problems
Requirements:
1. Minimum bachelor degree with major in accounting, finance related, CPA or ACCA preferred
2. Minimum 5 years working experience in big 4 audit firm or 8 years accounting experience in financial service company
3. At least 3 years finance controlling experience and 3 years people management experience
4. Good speaking & written English skills, good computer skills
5. Sound knowledge of IFRS /GAAP reporting requirements.
* Please send us your complete resume (both in Chinese and in English to: ‘topjob_fi189sh@dacare.com'(Please replace “#” with “@”)
* In the email subject MUST you plus the position name ?in either En or Ch ?

Plant Manager (eo153sh)

Job Title: Plant Manager
Job Description:
Company introduction:
Our client, a Publicly traded on NASDAQ is an industrial supply chain logistics and diversified manufacturing business operating in three segments. With over 4,000 employees worldwide and Production and Sales of Parts for Automotive, Casting, Forging, and Supply Chain Management services. The company believes that a personal investment in the company and the pride of being part of a winning team. They are looking for talent for their Shanghai site.

Report To: CEO
Location: Shanghai
Responsibilities:
1. Oversee production operations and factory floor planning.
2. Manage the workforce, including supervisory and administrative support staffs.
3. Responsible for Safety of facility and employees, including environmental reporting.
4. Support Corrective and Preventive Action Programs through continuous improvement. Responsible for continuous improvement in all areas of the factory operation;
5. Participate in all new program start-ups to determine and communicate required schedules and documentation. Support implementation of the strategic direction of Operations in China.
6. Control and reduce production cost while improving quality by training programs, cross training of operators, process improvement, etc.
7. Responsible for financial reporting. Budget development and adherence requirement;
8. Contribute to the overall company performance by active participation as part of the management team by daily communication with the subordinate departments’ heads.
9. Follow TS Quality Management System
10. Provide Sales Support
11. Any other duties as assigned by supervisor

Requirements:
1. Bachelor degree majored in Mechanical, Engineering or relevant, and MBA is preferred;
2. At least 8 to 10 years of manufacturing experience including minimum 3 years in managerial position in foreign manufacturing company;
3. Professional leadership, teamwork and good communication skills; Strong analytical, organizational and planning skill required;
4. Knowledge of Lean Production/6Sigma. Knowledge, understanding, and experience in ISO and TS quality and automotive manufacturing systems.
5. Engineering processing experience in rubber molding is preferred.
6. Good command of English both spoken and written; Mandarin Chinese language proficiency, in verbal and written forms, is required.
7. Strong leadership and inter-personal skills with ability to work through all levels of organization, internal and external.
8. Be able to work under pressure, self-motivated and have positive attitude as well as good team spirit.
* Please send us your complete resume (both in Chinese and in English to: ‘topjob_eo153sh@dacare.com'(Please replace “#” with “@”)
* In the email subject MUST you plus the position name ?in either En or Ch ?

Expert: Women ‘should work longer’

The retirement age of women should be extended as a solution to Shanghai’s shrinking supply of labor and the rapidly aging population, a demographics expert has said.

Gui Shixun, vice-director of the Shanghai Research Center on Aging, said by 2020 men and women should be allowed to retire at age 60.

Currently, women working for government institutions and companies are required to retire at age 55 and men at 60. Women blue-collar workers must retire at 50 and men at 55.

In recent years, economic experts have increasingly warned that the nation’s abundant supply of low -cost labor, seen as the backbone of China’s phenomenal economic growth, will decrease.

In Shanghai, 20 percent of its population of about 18 million, are now aged over 60, prompting the local government to step up efforts to find a solution.

Gui said Shanghai’s working population, or permanent residents aged between 15 and 59, shrank 52,400 to 9.76 million last year, reportedly the biggest decrease in all provinces and municipalities in China.

“The slow growth of the labor force in Shanghai will become more serious,” Gui told the Oriental Morning Post newspaper.

Shanghai should grant more permanent resident permits and the one-child policy should be relaxed, he said.

The proposal to have both men and women retire at 60, was put forward a few years ago, but met with mixed reactions.

Bao Yunyun, an office worker, said she would like to retire at an earlier age “so she will have time to do something different”.

But an increasing number of women who want to keep their jobs longer regard the current policy, introduced decades ago, as discrimination.

“The early retiring age means fewer social welfare benefits and it’s unfair for women,” Zhu Dan, a member of the Chongqing Municipal Committee of the Chinese People’s Political Consultative Congress, said in a recent Xinhua report.

To receive the full benefits of government policies usually requires employees to have more than 30 years’ service, she said.

Women today are able to work longer than before due to improved working conditions and better health, she said.

Wang Qishan: China to provide more opportunity for foreign investment

China announced it would provide more opportunity for foreign investment, Vice Premier Wang Qishan said on Monday at the opening of the 12th Xiamen International Trade and Investment Fair in the southeast Fujian Province.

China will insist on its opening-up policy continuing to perfect the policies for the utilization of foreign capital to provide more spaces for overseas enterprises in the country.

Chinese vice Premier Wang Qishan (C) attends the opening ceremony of the 12th China International Fair for Investment and Trade (CIFIT) in Xiamen, a coastal city in southwest China’s Fujian Province, Sept. 8, 2008. (Xinhua/Zhang Guojun)
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As one of the main forces for the country’s development, foreign investment had brought capital, technology and management experience, among others. As China was the developing country that had attracted the largest amount of foreign investment over the past 16 years, more fields covering agriculture, manufacturing and services, were being explored, Wang said. Many international companies viewed China as their first choice.

Wang announced five policies for future investment services, covering promotion of the investment environment, better utilization of foreign capital and encouraging Chinese enterprises to invest in foreign countries, among others.

China will raise the service qualities of governments and guarantee a fair investment environment with a transparent legal system.

The government is encouraging foreign capital to flow into high-tech, modern agriculture, energy conservation industries and modern services to enhance the independent innovation and harmonious development. It will also encourage foreign companies to invest domestically through founding local offices or participating in the reforms of domestic enterprises.

In the post-Olympic Games period China would insist on the opening-up policy and peaceful development, Commerce Minister Chen Deming said.

“I believe every friend here at the fair will receive the opportunity and benefit from the peaceful rise of China.”

The Xiamen fair has become an influencial platform for mutual investment that is welcomed by governments, intermediate agencies and enterprises.

“The country (China) is committed to meeting its World Trade Organization obligations, which should boost FDI (foreign direct investment) even more,” said Alessandro Teixeira, World Association of Investment Promotion Agencies president.

“Sectors such as domestic commerce, financial services, insurance and tourism are being gradually opened up. Geographic restrictions on where foreign companies are allowed to set up operations are expected to be relaxed in the coming years,” he said.

“China’s foreign investment policy has come to a turning point, and preferential treatment for foreign capital has been in principle abolished with the exception of certain sectors including high-technology,” said Shoichiro Toyoda, the third chairman of the Japan-China Investment Promotion Organization. Its1990 establishment by Chinese and Japanese leaders was to improve the investment climate and promote investment in China.

At almost the same time, the China-Japan Investment Promotion Committee was established as its Chinese counterpart. Currently, Minister Cheng serves as its chairman.

At the time, few Japanese companies had launched operations in China. During the 18 years since its establishment, the Japanese committee has provided support and information for Japanese firms intending to invest in China. It has helped companies deal with problems they encountered.

Currently, its member companies number more than 370. In addition, it has provided advice on more than 20,000 cases.

According to Chinese statistics, Japan’s investment in China was decreasing. Japanese statistics, however, indicated the amount of investment, including reinvestment by companies operating in China, had not decreased. It had remained relatively unchanged, Toyoda said.

“In my view, there are four key elements that we should focus on for further promoting new investment in China. They are energy-saving and green technology, smaller companies, the development of Central, Western and Northeast China, and special preferential treatment,” he said.

The four-day Xiamen fair features 2,500 exhibitors, 1,000 more than last year. It has attracted 74 nations, including America, Australia, Brazil, Italy and countries from Africa and the Pacific islands. In all, 445 organizations from 104 countries and regions attended. More than 50 countries and regions were holding seminars to introduce their investment environment.

New projects signed at the fair this year have been reported at more than 5,300, including 320 from overseas.

As China’s only annual fair for promoting mutual investment, the Xiamen fair has become the world’s largest expo of its kind.

More than 100,000 guests from 144 countries and regions and more than 3,000 international companies have attended the fair over the past 11 years. It has drawn 7.7 billion U.S. dollars in investment into China with more than 13,000 projects signed.

Fatter pay packets for Shanghai graduates

SHANGHAI university students who graduated in 2008 have an average monthly salary of 2,899 yuan (US$424) from their first job, ranking the highest among six major cities in the country and followed by Shenzhen and Beijing.

The average salary in Shenzhen, Guangdong Province is 2,816 yuan and 2,699 yuan in Beijing.

The average Shanghai salary is up 10 percent compared to last year, according to statistics cited by zhaopin.com, Shanghai Evening Post reported today.

The 2008 salary report compiled by zhaopin.com, a popular job hunter Website, indicated the growth rate of university graduate salaries in the city ranks second in China, just 1 percent behind Nanjing, capital city of Jiangsu Province.

Four other cities including Guangzhou and Beijing also experienced increases in average salaries for university graduates this year, according to the report.

The best paid graduates were usually those who majored in finance, high-tech, manufacturing, real estate and the consumer goods industry, the report said.

Those who majored in finance enjoyed the most rapid salary growth and have an average salary of 2,725 yuan. Graduates recruited by private enterprise also had a quick increase in salary but still start at 2,106 yuan.

Graduates who work for wholly foreign-owned enterprises have the highest starting salary of 2,957 yuan, but the lease growth rate, the report said.

The report said people working in marketing or product-related jobs experienced about a 10 percent increase this year but graduates in human resources and information and technology have taken a cut of 1 percent compared to last year.

The report also pointed out graduates with higher degrees can enjoy a higher growth in salaries this year. Masters degree graduates have had a 12 percent boost while college degree students only jumped 5 percent.