Archives 2009

Investment banks in Asia hiring push

Investment banks are moving to increase headcount in China and India in anticipation of rising deal flows fuelled by strong growth rates in Asia’s largest developing economies.

Banks had scaled back staffing across Asia amid a dearth of merger and acquisition activity, and stagnant capital markets.

But investment banks and headhunters report renewed interest in recruiting for senior positions as confidence mounts of inc-reasing demand for services in main regional markets.

The Chinese economy is expected to grow by about 8 per cent in 2009, while India said this week its economy grew 6.1 per cent in the June quarter from a year earlier.

The strengthening econ-omic backdrop has prompted a flurry of capital raisings to help fund expansion plans. Bankers in Shanghai and Hong Kong predict a further $30bn of equity issuance this year.

According to Dealogic, corporate equity and debt issuance in India has confounded expectations, topping $26.6bn – more than in the same period last year.

Vikram Malhotra, Credit Suisse co-head of Asia investment banking, said that the bank had moved to boost headcount in such areas as financial institutions and energy. “As the momentum in the markets has continued, we have increased capacity to meet increasing demand from clients and investors, adding more execution strength as deal flow builds,” he said.

Among the bank’s recent hires are Simon Yuan, who quit Merrill Lynch to co-head its greater China financial institutions coverage. Goldman Sachs is expected soon to announce senior hires in Mumbai and Beijing.

Gokul Laroia, co-head of investment banking for Morgan Stanley in Asia, said the bank had made selective senior hires on the back of rising deal activity.

Other banks have moved to reallocate senior staff from other regions to Asia, given the relative opportunities, while some are reassigning executives to new positions in China as they seek to expand their mainland platform. JPMorgan recently moved Frank Gong, chief China economist, to an investment banking role.

Another feature is the move to create senior positions in Hong Kong, to oversee China and India from banks’ regional headquarters.

Morgan Stanley last month hired Ronan McCullough from Goldman Sachs to head its bond and loan syndicate for Asia Pacific.

Google Executive to Quit

Google Inc. announced that Kai-Fu Lee, president of Google Inc.’s China operations, is resigning from the company after working for years to establish the Internet giant as a formidable player in the country.

Mr. Lee will be succeeded by two Google executives, the company said. Boon-Lock Yeo, currently director of Google’s Shanghai engineering office, will run engineering for Google China. John Liu, who currently leads Google’s sales team in greater China, will assume Mr. Lee’s business and operational responsibilities.

Mr. Lee left Microsoft Corp. to join Google in 2005 to develop the company’s operations in China, where Google was later than some of its rivals to establish a beachhead.

Mr. Lee’s hiring kicked off a legal battle between Microsoft and Google. Microsoft, alleging Mr. Lee violated his employment contract, filed suit against Google. Google countersued, accusing Microsoft of “a shocking display of hubris,” according to court documents. The companies settled privately in 2005.

Google said Mr. Lee is leaving to work on his own venture. “With a very strong leadership team in place, it seemed a very good moment for me to move to the next chapter in my career,” Mr. Lee said in a statement.

During Mr. Lee’s tenure, usage of Google products, including its search service, has grown among Chinese users. The company has also launched some products unique to the market, including an online music service. In announcing Mr. Lee’s departure, Google said it was nearly doubling the size of its sales force in China in response to strong growth.

But Google continues to confront a range of headaches in China, which, as the country with the largest number of Internet users, is critical to its growth. Google still trails Chinese search leader Baidu by a wide margin. In the second quarter of 2009, Google drew around 20% of Chinese Internet searches, compared with Baidu’s 76%, according to iResearch, an Internet research concern

Google has also continued to clash with Chinese authorities, who have selectively blocked services such as its video-sharing site, YouTube.

Job-hunting graduates prefer State-owned to foreign companies

More Chinese graduates prefer to work for a State-owned company than for a foreign-owned enterprise, according to a new survey.

The findings were based on surveys of 21,000 graduating college students across China by the human resources company www.chinahr.com.

It is the first time in seven years that Chinese companies came out on top.

Foreign companies received a historically low vote of 23 percent, compared with 34.1 percent for State-owned businesses in the poll.

“Advantages such as more stable employment and better employee benefits at State-owned companies proved to be more attractive to college students, especially given the global economic slowdown,” said Ouyang Hui, a human resources (HR) research supervisor at www.chinahr.com.

“Foreign companies, joint ventures and private enterprises cut back staff or scaled down recruiting plans last year, while State-owned businesses endeavored to create job opportunities for graduates in accordance with official policy,” Ouyang said.

Chen Jiang, a master’s degree graduate of Peking University, the most prestigious in China, moved to a State-owned integrated circuit company this summer after originally being hired by a foreign company in the same line of business.

To his surprise, Chen said, a lot of his classmates who worked for well-known foreign companies asked him to keep an eye out for any opportunities for them.

US-based Procter & Gamble and Google are the only two foreign companies in the top 10, according to the poll.

China Mobile ranked first for the second time, while past favorites Microsoft and IBM ranked 11th and 12th, respectively.

Ouyang said the State-owned companies started to attract more recruits in 2007.

According to researchers, students were attracted most by fair human resources policies and opportunities for development and advancement when choosing a job.

Salary and benefits were the top factors in 2008. This year benefits ranked fourth, and salary ranked ninth.

“It is a good phenomenon if the investigations were conducted scientifically,” said Mike Wang, HR manager of Morgan Stanley China.

“It means students could have more choices when selecting a job. But to us, it’s less relevant,” Wang said.

“As a leading foreign company in the field, we always pay attention to college students and try to provide them with the best career path. And we respect individual choices according to their own situations,” he said.

To learn more about graduates’ needs and preferences during campus recruitment periods, Morgan Stanley conducted its own survey in the first half of 2009 among students at Tsinghua, Peking, Fudan and Shanghai Jiaotong universities.

“We broadened our recruitment outreach based on the results, such as expanding our information channels through campus bulletin boards and other popular online forums posting job-hunting information, so that graduates would have a clear picture of what we can offer them,” Wang said.

“To further contribute to the community and also enhance communications between graduates and Morgan Stanley, we have been sponsoring the Morgan Stanley Scholarship Program at leading universities in China since 2006,” he added.

Yi Siting, 25, a master’s graduate from Renmin University of China, chose Bank of China as her career starting point this spring, but denied the economic situation was her main consideration while job hunting.

“At State companies such as Bank of China, a lot of relaxation activities will be organized, which makes employees feel like part of a family. Large companies give me a sense of belonging and security,” she said

Yi’s close friend Tang Fang, from Peking University, said she prefers foreign companies to any other kind, saying they had more management expertise and a freer atmosphere.

But Yi disagreed.

“Actually, most State companies such as Bank of China always hire a lot of people from abroad, and it has a very open and modern management style,” Yi said.

“Nowadays, the gap between State-owned companies and foreign ones in this respect has become narrower and narrower,” she said.

As HR commissioner at a State-owned telecommunication company, Wu Yao was pleased with the poll results.

But he added that he didn’t expect State-owned companies to prevail in the long term.

“As the distance between Chinese companies and foreign counterparts narrows, students will choose employers according to their own background, personal working style and interests, regardless of whether it is foreign or State-owned,” Wu said.

“All companies have realized the importance of human resources,” Wu added.

Jobless rate increases to record high in Taiwan

TAIWAN’S jobless rate hit a record high of 6.1 percent in July, authorities said yesterday, as new graduates entered the job market and started to look for work amid a recession.

A total of 663,000 people were unemployed, up from 647,000 in June. It was the third straight month Taiwan’s unemployment rate hit a record high.

The loss of temporary jobs was another factor for rising unemployment, authorities said.

Taiwan’s economy contracted 7.5 percent in the second quarter, and the government has predicted gross domestic product to shrink 4 percent this year.

A devastating typhoon this month has resulted in more than US$2 billion in farm and property damage, but its impact on the economy will be offset by huge government reconstruction spending, officials said.

Taiwan approved a NT$100 billion (US$3 billion) rebuilding fund to be spent over the next three years.

American Graduates Finding Jobs in China

BEIJING — Shanghai and Beijing are becoming new lands of opportunity for recent American college graduates who face unemployment nearing double digits at home.

Even those with limited or no knowledge of Chinese are heeding the call. They are lured by China’s surging economy, the lower cost of living and a chance to bypass some of the dues-paying that is common to first jobs in the United States.

“I’ve seen a surge of young people coming to work in China over the last few years,” said Jack Perkowski, founder of Asimco Technologies, one of the largest automotive parts companies in China.

“When I came over to China in 1994, that was the first wave of Americans coming to China,” he said. “These young people are part of this big second wave.”

One of those in the latest wave is Joshua Arjuna Stephens, who graduated from Wesleyan University in 2007 with a bachelor’s degree in American studies. Two years ago, he decided to take a temporary summer position in Shanghai with China Prep, an educational travel company.

“I didn’t know anything about China,” said Mr. Stephens, who worked on market research and program development. “People thought I was nuts to go not speaking the language, but I wanted to do something off the beaten track.”

Two years later, after stints in the nonprofit sector and at a large public relations firm in Beijing, he is highly proficient in Mandarin and works as a manager for XPD Media, a social media company based in Beijing that makes online games.

Jonathan Woetzel, a partner with McKinsey & Company in Shanghai who has lived in China since the mid-1980s, says that compared with just a few years ago, he was seeing more young Americans arriving in China to be part of an entrepreneurial boom. “There’s a lot of experimentation going on in China right now, particularly in the energy sphere, and when people are young they are willing to come and try something new,” he said.

And the Chinese economy is more hospitable for both entrepreneurs and job seekers, with a gross domestic product that rose 7.9 percent in the most recent quarter compared with the period a year earlier. Unemployment in urban areas is 4.3 percent, according to government data.

Grace Hsieh, president of the Yale Club in Beijing and a 2007 graduate, says she has seen a rise in the number of Yale graduates who have come to work in Beijing since she arrived in China two years ago. She is working as an account executive in Beijing for Hill & Knowlton, the public relations company.

Sarabeth Berman, a 2006 graduate of Barnard College with a major in urban studies, initially arrived in Beijing at the age of 23 to take a job that would have been difficult for a person her age to land in the United States: program director at BeijingDance/LDTX, the first modern dance company in China to be founded independently of the government.

Ms. Berman said she was hired for her familiarity with Western modern dance rather than a knowledge of China. “Despite my lack of language skills and the fact that I had no experience working in China, I was given the opportunity to manage the touring, international projects, and produce and program our annual Beijing Dance Festival.”

After two years of living and working in China, Ms. Berman is proficient in Mandarin. She travels throughout China, Europe and the United States with the dance company.

Willy Tsao, the artistic director of BeijingDance/LDTX, said he had hired Ms. Berman because of her ability to make connections beyond China. “I needed someone who was capable of communicating with the Western world.”

Another dynamic in the hiring process, Mr. Tsao says, is that Westerners can often bring skills that are harder to find among the Chinese.

“Sarabeth is always taking initiative and thinking what we can do,” he said, “while I think the more standard Chinese approach is to take orders.” He says the difference is rooted in the educational system. “In Chinese schools students are encouraged to be quiet and less outspoken; it fosters a culture of listening more than initiating.”

Mr. Perkowski, who spent almost 20 years on Wall Street before heading to China, says many Chinese companies are looking to hire native English speakers to help them navigate the American market.

“I’m working with a company right now that wants me to help them find young American professionals who can be their liaisons to the U.S.,” he said. “They want people who understand the social and cultural nuances of the West.”

Skip to next paragraph Mr. Perkowski’s latest venture, JFP Holdings, a merchant bank based in Beijing, has not posted any job openings, but has received more than 60 résumés; a third are from young people in the United States who want to come work in China, he said.

Mick Zomnir, 20, a soon-to-be junior at the Massachusetts Institute of Technology, is working as a summer intern for JFP. “As things have gotten more difficult in the U.S., I started to think about opportunities elsewhere,” he said. He does not speak Chinese but says he will begin studying Mandarin when he returns to M.I.T. in the fall.

A big draw of working in China, many young people say, is that they feel it allows them to skip a rung or two on the career ladder.

Ms. Berman said: “There is no doubt that China is an awesome place to jump-start your career. Back in the U.S., I would be intern No. 3 at some company or selling tickets at Lincoln Center.”

For others, like Jason Misium, 23, China has solved the cash flow problem of starting a business. After graduating with a degree in biology from Harvard in 2008, Mr. Misium came to China to study the language. Then, with a friend, Matthew Young, he started Sophos Academic Group, an academic consulting firm that works with Chinese students who want to study in the United States.

“It’s China’s fault that I’m still here,” he said. “It’s just so cheap to start a business.” It cost him the equivalent of $12,000, which he had in savings, he said.

Among many young Americans, the China exit strategy is a common topic of conversation. Mr. Stephens, Ms. Berman and Mr. Misium all said they were planning to return to the United States eventually.

Mr. Woetzel of McKinsey said work experience in China was not an automatic ticket to a great job back home. He said it was not a marker in the same way an Ivy League education: “The mere fact of just showing up and working in China and speaking Chinese is not enough.”

That said, Mr. Woetzel added, someone who has been able to make a mark in China is a valuable hire.

“At McKinsey, we are looking for people who have demonstrated leadership,” he said, “and working in a context like China builds character, requires you to be a lot more entrepreneurial and forces you to innovate.”

HK jobless rate reaches 5.4%

Hong Kong has reported a 5.4 percent unemployment rate between May and July, up from 3.3% in April to June.

Although it’s a jump, authorities say it’s better than expected, and the labor market is stable. The 5.4 percent rate means the city has 10 thousand more jobless in the three months, taking the total above 210 thousand.

Local government says the figure is better than expected. Most job losses during the period have been in decorating, finance and the entertainment sector. The unemployment rate in the construction industry is the most severe, at 11.1 percent, but it’s lower than the previous month.

Unemployment in the finance sector has also fallen a little to 2.4 percent. Authorities said companies have made great efforts to provide more job opportunities in the past few months.

China can achieve 2009 employment targets

At present, China’s employment situation remains stable and some positive changes have emerged. Human Resources and Social Security Minister Yin Weimin said that he is confident that all the current annual employment targets will be achieved.

In the first seven months of 2009, China created 6.66 million new urban jobs, 970,000 of which were created in July. In this period, 3.15 million laid-off workers were re-employed and 930,000 people facing employment difficulties found jobs, which is overall better than expected.

At the beginning of 2009, China set employment targets requiring that 9 million new urban jobs be created over the year and registered unemployment rate be controlled below 4.6 percent. In the first seven months, the number of newly-created jobs has already accounted for 74 percent of the target, and the registered unemployment rate stood at 4.3 percent as of the end of second quarter, curbing the upward momentum which has existed since the end of last year. The number of monthly newly-created jobs in cities and towns has basically stabilized since the second quarter.

The monthly increment of about one million employment opportunities is essentially maintaining the same level as that recorded before the outbreak of the international financial crisis. This indicates that China’s employment has gradually bottomed out.

Yin said that in order to achieve the annual employment target, in addition to continuing to boost employment by closely integrating the expansion of domestic demand with economic development, implementing more active employment policies and strengthening training will also improve employability. Priority should also be given to promoting the tertiary industry and small and medium-sized enterprises to stimulate employment.

However, according to overall analysis, the current conflict between labor force oversupply and shrinking demand is still acute. According to the latest estimates from the Ministry of Human Resources and Social Security (MHRSS), there will be over 24 million people in need of employment in 2009. “If calculated on the basis of an eight percent economic growth rate, only about 12 million new jobs can be provided after a whole year’s economic growth. The gap between supply and demand will further widen compared to that of 2008,” said an MHRSS official.

Fiscal talent, IT wizardry high on agenda

Howard Yan graduated with a bachelor’s degree in computer science in England in 2005 and set up a company selling electronic navigation systems in the United Kingdom and other countries. Pinched by poor profits when the global financial crisis hit, he returned to Shanghai last year.

Yan now works for Shanghai Information Investment Inc, a state-owned enterprise focused on strategic investment in the city’s information technology infrastructure.

“I can contribute my knowledge in computer science,” he said. “Moreover, the city’s financial sector will become even more important after the crisis.”

Yan is one of many who see opportunities unfolding after the State Council gave Shanghai the green light to transform itself into a major international financial center and shipping hub by 2020.

Financial services, one of the most important sectors in the government’s grand plan, is expected to need a lot of the kind of talent Yan can offer.

The financial sector in Shanghai has a total employment of about 230,000 by the end of 2008, about 2 percent out of the total 10.53 million employees in the city, according to an annual report by Shanghai Statistic Bureau.

New York, in contrast, has a total number of 464,400 in the financial sector, 14.5 percent that of its total employment by the end of 2008, according to the New York State Department of Labor.

The quality and quantity of Shanghai’s financial talent will have a direct influence on the pace of progress in achieving the city’s ambitions, according to the Blueprint for Shanghai’s Development as a Financial Center, a report by three financial professors at Shanghai Finance University.

“Shanghai should have at least 1 million employees in the financial sector and related industries,” said the report. “We’re facing increasing pressure as our business in China is expanding very rapidly,” said Huang Qiumei, director for human resources at Standard Chartered (China).

“Our staff on China’s mainland will exceed 4,000 very soon, compared with an initial 1,200 employees,” she said.

“It’s hard to say in which sector in Shanghai is most short of financial experience,” said Zhou Lin, deputy dean and professor at the new Shanghai Advanced Institute of Finance in Shanghai Jiao Tong University.

The institute was founded in April with a six-year grant of 320 million yuan (US$46.8 million) from the city government.

“Setting up a structured method to allow enterprises and employees to develop at the same time may prove efficient for Shanghai to expand its talent pool,” Glynn Lowth, president of Chartered Institute of Management Accountants, told a media briefing in Shanghai in April.

“There is still not enough financial talent familiar with international financial operations, and the problem lies in the shortage of qualified college faculties,” Zhou said.

Most professors in domestic universities focus on macroeconomics and currency policies; few of them have experience in capital markets and corporate operations.

Balanced approach

“We have designed courses to better suit the current economic situation, and with professors having rich experience in practical applications, we hope we can educate our students with international vision,” he added.

The college is expecting to graduate 500 students with master’s degrees in finance every year in eight or 10 years’ time.

“Shanghai must speed up the nurturing of financial professionals as well as attracting more Chinese and overseas experts to the city,” said Fang Xinghai, director of the Shanghai government’s Financial Services Office.

“It is not practical to fully rely on recruiting financial talent from overseas because our financial markets are not yet fully developed,” Zhou said.

Standard Chartered is adopting a balanced approach.

“We want local talent as well as overseas staff to help our development,” Huang said. Right now there are more than 300 staff from the overseas branches of Standard Chartered working in Shanghai.

China’s capital markets still lag their Western counterparts, and highly qualified staff are considered key to closing the gap.

“Fostering financial talent and developing financial markets are both important and can be done at the same time,” said Zhou.

For his part, Yan has enrolled in a postgraduate MBA course at Shanghai Advanced Institute of Finance and will start his studies in September.

“I hope I can secure a better job – and also contribute to the city’s financial services sector in the future,” he said.

Samsung Securities is hiring 50

Samsung Securities Co. is hiring 50 people in Hong Kong by the end of this year. According to Bloomberg, the South Korean firm is just launching an office in Hong Kong to expand its services for capital raising, acquisitions, stock trading and capital management.

Samsung Securities is also expanding to begin operations in China, Taiwan, Japan, Singapore and India through internal growth, partnerships and M&A. In fact it may consider a joint venture in China in order to begin operations there in two or three years, according to the report.

R&D hiring in China flat: Microsoft

RECRUITMENT at Microsoft’s largest research centre outside the US will be flat next year, a senior company executive said.

Microsoft China employs around 3500 research and development staff — more than a five-fold growth since 2005.

The work done at the China research lab is for global consumption; some of its more recent efforts can be found in Microsoft’s new operating system, Windows 7.

According to Ya-Qin Zhang, Microsoft corporate vice-president and chairman of its Beijing-based R&D group, staffing levels are adequate at the moment.

“In 2005 we had about 600 people in R&D in China. Now we’re at 3500 researchers and engineers but next year hiring will be flat,” Dr Zhang said.

The Beijing R&D group is divided into three streams — the product group works on existing products, incubation looks at next-generation products, and research has an eye on future products.

“The product team has the highest number of staff at around 80 per cent, while product and incubation have 10 per cent each.”

Dr Zhang’s research staff were responsible for a few features in Windows 7, including systems recovery and diagnosis, speech technology and multi-touch.

Microsoft US has the largest research and development group within the company, employing around 30,000 people.

Dr Zhang singled out smart devices, cloud computing, natural language, search and graphics as focus areas for the R&D group.

“We’re looking at how we can extend the capabilities of a computer and put in more intelligence in devices,” he said. “Smart sensors would be one area that we will see a lot of work in.

“But I personally like to keep it simple … technology should be simple, not complex,” he said, citing that as the reason why he doesn’t use a touchpad smart phone.

He dismissed backers of an all-or-nothing approach to cloud computing, saying most critics tend to forget the client’s role in the equation.

“I’m against talk that everything sits in the cloud and the client isn’t important. The two work hand in hand — cloud and client. How information is accessed is very important.”

Microsoft is pushing its Software-plus-Services vision for both public and private clouds.

The software giant increased its global R&D budget by $US1 billion to $US9bn this year, chief operating officer Kevin Turner said during a visit to Sydney in April.

Dr Zhang was in Sydney to officially open the National ICT Australia’s Techfest09 event yesterday; he has rejoined Nicta’s International Advisory Group after a brief hiatus.

Dr Zhang commended Nicta for the high standard of research being conducted and said both organisations shared the same vision.

“I’m excited to see that Nicta and Microsoft share the same model of taking risks,” he said.

At Techfest09, Nicta unveiled a new software component dubbed sel4 that ensures an operating system will “never” crash has been developed in Australia. It has the potential to earn billions of dollars in royalties.