Category News of China

Overseas Chinese eye motherland for jobs

They were the “gold-collar” workers: highly educated Chinese people working on Wall Street. Now, they are known as “sea turtles” as they head home to escape the financial storm.

Nearly 1,000 would-be turtles in business suits packed the ballroom of a New York hotel on December 13, where they pitched themselves at a job fair for opportunities in Shanghai, China’s financial hub.

Among them was Dong Shaw, who has worked on Wall Street for the last eight years after doing a PhD at Columbia University, and now uses an anglicized form of his last name.

“The crisis in the US is very severe. We’re having a serious shock that will reshape the landscape of Wall Street,” says Shaw, who is looking for jobs that match his expertise in model-driven stock selection.

Shaw, who said he was in his 40s, currently does stock-picking at a hedge fund and has also worked at Scudder Investments, Goldman Sachs and Bank of America.

Like many at the fair, Shaw is attracted to China’s relatively unscathed financial sector and still healthy growth prospects.

“As a new market, China is full of opportunities,” the Shanghai native told reporters.

The worst financial crisis in decades has left the US economy mired in a recession since December 2007, claiming more than 2 million jobs so far. New York’s securities industry has lost 16,000 jobs and could lose a total of 38,000 by next October, while another 10,000 could be axed in related fields such as banking, according to New York’s state comptroller.

Some cities and firms in China are quick to exploit the opportunity to lure back native talent. The fair was led by the Shanghai municipal government and organized by about two dozen banks, insurers and securities firms from the city, including the Shanghai Stock Exchange, one of the two stock exchanges in the Chinese mainland.

New York was the last stop in the delegation’s efforts to poach back up to as many as 170 seasoned specialists in such fields as risk management and private wealth management. Its two earlier recruiting sessions in London and Chicago attracted a total of 1,200 people.

Earlier this month, Nanjing in Jiangsu province in East China held similar events in several major cities in the US, which attracted hundreds of people.

Eager to become a major player in the world economy, China is working hard to expand its talent pool and overseas Chinese, who offer both international experience and language and cultural skills, have often become an ideal option for local firms.

Of the 1.2 million Chinese people who have gone abroad to study in the past 30 years, only one fourth of them have returned, according to the Chinese government.

It’s been a tough year for many of the “gold-collar” Chinese on Wall Street. Some have lost their jobs and most have seen their personal wealth shrink.

“This is an unusual time. For some, this is their first experience of being unemployed and they’re under enormous pressure,” says Tony Tang, president of The Chinese Finance Association (TCFA), a nonprofit group based in New York.

“Now these Chinese companies are giving out positions and many are contemplating it.”

Optimism over China

To be sure, the Chinese economy is also hitting a bump this year as export demand evaporates in response to the global economic slowdown. Sagging asset values are another cause of concern, with the local stock market down about 70 percent this year, one of the worst performers in the world.

Beijing recently unveiled another round of stimulus measures including increasing money supply by 17 percent to boost lending and consumption. It comes on the heels of a 4 trillion yuan package announced last month amid fears growth could fall below the 8 percent considered necessary to create enough jobs.

Indeed, so many sea turtles (hai gui in Mandarin) have returned home that the people of Beijing, Shanghai and elsewhere have invented a new name for those returnees who cannot find a job: “seaweed” (hai dai).

But, while unemployment is rising in China, there are still opportunities at the top of the labor market, especially for those with foreign education and experience.

Zack Liu, who returned to China in earlier 2008 after more than a decade on Wall Street, says he was impressed by the efforts made by Chinese fund firms to institutionalize and professionalize the industry.

Liu started his career in finance in 1996 at Bear Stearns after earning an MBA from Cornell and a PhD degree in physics from Florida State University. Over the past year, he has watched two of the three firms he worked for either collapse or merge with others as a result of the credit crunch.

“It’s sad to watch all these big banks fail. Life is like a roller-coaster. I made the right decision at the right time to come back to China,” Liu tells reporters by phone from his new home in Shenzhen.

Patriotism is sometimes a factor, but economic interest is certainly a much more important consideration. Still, many “sea turtles” acknowledged that they’re willing to accept lower pay if the job provides attractive career prospects.

Career International, a leading recruitment firm in Beijing, says there has been a jump in interest from Chinese employees on Wall Street. Their potential employers in China, according to the company, mostly offer a base pay in the range of $100,000 to $500,000.

“Before the crisis, we were receiving about five resumes per week on average. Now, it’s two or three times of that,” Jun Xu, director of the firm’s financial services group, says by telephone from Beijing.

“We’re also trying to help their families through the transition. Unlike us (who only have one child), many ‘sea turtles’ have two or three kids and some also need a bilingual daycare center.”

Some in the United States, such as Ke Zhang, who works for a hedge fund after being laid off from Lehman Brothers earlier this year, are taking a wait-and-see attitude.

“The economy here is terrible,” says the 27-year-old who holds a masters degree from Columbia University. “Gaining experience in the US is still very important. Besides, the employment situation in China is far from rosy either.”

Hire more now for greater benefits later

Chinese enterprises that found themselves falling behind the talent rush in the past should take heart from the global economic slowdown as it presents a golden opportunity for them to recruit qualified and experienced executives and professionals from around the world.

Of course, talent doesn’t come cheap, human resources experts say. But it is at least available as more and more US and European multinational companies are going into the retrenchment mode to cut costs.

Human resources experts are of the view that the layoff strategies are”short-sighted” and costly in the longer term. When the economy begins to turn the corner and embark on a new cycle, these corporations will have to offer unusually high salaries and attractive incentives to compete for the talented personnel they laid off.

But before the economic pendulum swings to the other side, there exists a window of opportunity for Chinese enterprises, long constrained by their relatively more rigid pay scales and rudimentary incentive programs, to get the professionals they need to expand their businesses on the mainland and overseas .

In an exclusive interview with China Business Weekly, Goodwin, CEO of Antal International, a global recruitment company that charges corporate clients thousands of dollars as consultancy fees, says “hiring people now can bring greater long-term benefit than firing”.

Goodwin advocates different strategies for local companies, multinational firms already present and for those companies who want to enter China. He stresses that the ultimate objective for all three categories would be “a long-term HR policy”.

US companies tend to react a little more aggressively to the perceived effects of the global economic downturn and reduce their workforce quickly. On the other hand domestic enterprises and European multinationals have shown greater restraint in their response to the crisis, says Goodwin.

In these uncertain times when the developed economies, especially the US, are sliding into a recession, corporate executives need to be careful while formulating the human resources strategies, he says.

“Companies that are now firing people would experience problems next year when the economy improves,” Goodwin says.

“These companies will have no choice but to start rehiring then at higher costs,” he predicted. During the 1998 economic downturn, a US company swiftly laid off 3,500 people to cut costs, he recalls. When the economy began to recover a few years later, it took that same company 18 months to re-hire the people it needed and at much higher costs than before.

Because of the difference in corporate cultures, European and Chinese companies tend to follow a much more conservative approach in cost control than their US counterparts. They do not offer big-time salaries to compete for talents, but at the same time they also do not resort to massive layoffs when they encounter bumps, says Goodwin.

His advice to foreign companies in China is to save costs by speeding up the process of localization. Companies should hire more Chinese managers and professionals rather than bring people from their own countries. The quality of the Chinese management talent, especially those who have worked in foreign companies has improved rapidly in the past three years, he adds.

With the knowledge and cultural gap narrowing, localization is only a simple matter of economics, he says. “Foreign experts may cost the company 300 to 400 dollars every month apart from costs related to accommodation, car, driver and children’s education. In contrast, hiring Chinese staff will not cost companies the extra expenditure, says Goodwin.

CapitaLand, the Singapore-based investment and real-estate firm is one of the companies that has followed the localization route. “In 2009, we will be hiring even more local talent,” says Liew Mun Leong, CEO of CapitaLand. The company’s target is to eventually have a 100 percent Chinese management team.

“It is very difficult for a foreigner to understand Chinese culture.

So the best way is to hire executives locally,” says Liew.

Opportunity beckons

Goodwin says the small- to medium-sized Chinese firms should now take the opportunity to grab whatever talents they can get. Antal has over 600 clients in China and of these 35 percent are local companies.

Chinese companies that acquire foreign companies could also encounter talent challenges like when Lenovo took over the PC business of IBM.

But Goodwin says, such problems can be solved more easily. “In the next six months, when Chinese companies enter overseas markets, they will see a veritable talent pool of directors, managers and even CEOs from western companies to choose from due to the recession. The Chinese firms can hire them for overseas development as they have better chances to take over struggling US companies,” he says.

“If the financial crisis had not happened, the smaller companies would never have been able to compete with big corporations for top managers,” Goodwin says. “Now is the best time for them to tap the market for talent.”

The moot question, however, is how to retain the hired talent when the economy starts growing again. Goodwin feels this is not a major deterrent as the small companies can also grow. “Small firms would become mid-sized and they in turn will become big.

The talent hired by small and mid-sized companies would also scale up the ladder in tandem with the firms and hence remain loyal to their employers.

“As long as the talent feels satisfied with their job and get paid well there is no reason for them to leave for bigger companies,” says Goodwin.

He adds that it would be prudent for companies that are planning to enter the Chinese market to hire talent locally.

“With US companies laying off people, it would be the right time for other foreign firms to hire people from the Chinese talent market,” says Goodwin. He cites the example of myweather.com, a meteorologic solution company that is planning to hire local talent for its business expansion.

Jobseekers get frustrated as employment situation worsens

A sense of uncertainty is growing among jobseekers as the country faces a worsening employment situation, experts said on Friday.

“There is a strong sense of insecurity among migrant workers, college graduates and even white-collar workers amid the global financial crisis,” Guo Weiqing, a professor of public administration at Guangzhou’s Sun Yat-sen University, told China Daily.

Tens of thousands of migrant workers have lost their jobs in Guangdong province with the closure of factories hit by the crisis.

“It’s like an epidemic and everyone is now worried about their jobs,” Guo said.

According to the latest survey from the Ministry of Human Resources and Social Security this week, 4.85 million jobless migrant workers had returned to their hometowns by the end of November, and nationwide, more than 10 million of migrants are currently out of work.

Around 670,000 small firms have closed this year as a result of the global financial crisis, adding to employment pressures, State Council advisor Chen Quansheng told a forum in Beijing on Friday.

About 6.7 million jobs vanished, many in the export hub of Guangdong, pushing unemployment well above the official figure of 8.3 million, Chen said.

“The real figure is much higher than the official statistics, which only report urban registered jobless,” he said.

“The major problem in China now is employment, especially for university graduates and young migrant workers,” Chen said.

An increasing number of graduates will face a more difficult situation next year. The unemployment rate for new graduates is over 12 percent and 1.5 million of them will be without a job by the end of this year, while 6.1 million more will enter the job market next year, a Chinese Academy of Social Sciences report said.

“Facing such a tough time, young migrant workers and students can easily get emotional or hotheaded and may become a potential threat to social stability,” Guo warned.

Li Wei, a CASS researcher on social development, suggested that more social security measures should be introduced to ensure the basic living standards of the jobless.

He also said the NGOs can play a more active role in social relief and vocational training programs.

Call for law to punish fleeing bosses

The National People’s Congress (NPC) should introduce a new legislation that makes it a crime for business owners to flee without paying workers, a senior Guangdong official said on Tuesday.

Liu Youjun, deputy director of the provincial labor and social security department, said his proposal will be officially submitted to the NPC at next year’s session.

In Dongguan, a major manufacturing base in Guangdong, 117 firms closed down in September and October.

In each case, the owners fled, leaving more than 20,000 people without wages, the Hong Kong-based Takungpao reported yesterday.

Local governments and taxpayers were left to pick up the bill, it said.

There is currently no criminal law covering this sort of behavior, Liu said.

Labor and social security departments can issue administrative punishments to business owners, such as preventing them from investing in the future, but they are not enough to stop unscrupulous operators from re-offending, he said.

The only effective solution is to introduce a law that makes it a crime for company bosses to flee their failing businesses, he said.

Meanwhile, Liu Bingquan, director of Guangdong’s small and medium enterprise bureau, told NPC deputies on a visit to Guangzhou yesterday that in the first 10 months of the year, 15,661 local SMEs either closed down, suspended their operations or moved away.

In some parts of Guangzhou, local government teams have even been set up to monitor suspect firms to ensure their owners do not flee, he said.

However, not all company chiefs are on the verge of fleeing.

Harley Seyedin, president of the American Chamber of Commerce (AmCham) in South China, told China Daily: “Multinational firms don’t behave like that.

“They want to expand their businesses in China, and many will be hiring more people next year.”

A recent study conducted by AmCham found that most of its 1,300 member companies in South China had decided to shift the focus of their business from America and Europe to China.

“The Chinese market is getting stronger compared with the Western market,” Seyedin said.

“So firms are hiring more people, rather than laying them off.”

Shanghai recruitment fairs hot on Wall Street

A number of Shanghai financial institutions hunting overseas to recruit high-end talent recently came back with their bags packed with resumes.

From Dec 5 to Dec 13, the Shanghai team held a series of recruitment fairs in the US and Britain, which lured thousands of local talents.

“The recruitment is quite hot. For a five minute interview, some applicants even take planes or drive more than 10 hours to attend the fairs,” said a manager with a Shanghai-based financial institution.

According to statistics, more than 1,000 people attended the recruitment fair in New York, 300 joined the fair in London, and 200 visited the fair held in Chicago. People who attend the fairs were laid-off workers, those who worried about losing their jobs and prepared in advance, and several graduates.

“Some applicants have been the senior managers of financial institutions with more than 10 years, even 20 years, of work experience. It’s a pity to see them standing in a queue to wait for a time-limited interview,” the manager said.

Shanghai overseas recruitment offers about 170 high-end posts related to banking, funds, insurance and securities investment, including chief economists for financial institutions, senior managers charging financial derivatives and senior managers responsible for market risks. The annual salaries range from 100,000 yuan ($14,600) to 1.5 million yuan.

Most jobs require applicants with more than five years of work experience in multinational financial institutions, and a master’s degree. Furthermore, some posts only recruit people with doctorate degrees and prefer to employ those with professional certificates, such as a CFA (Chartered Financial Analyst), an ACCA (Association of Chartered Certified Accountants), and a CFP (Certified Financial Planner).

For the posts related to risk management, the requirement is even higher. Applicants must have 5 years of work experience in financial institutions and 10 years in strategic research.

Public concern over jobs, pay gap

Rising unemployment and a widening income gap are the two issues of most concern to Chinese people, an annual report released on Monday by the Chinese Academy of Social Science (CASS) said.

Graduates from the Shandong Institute of Light Industry learn flower arranging at a florist’s in Jinan, Shandong province on Monday. The bleak employment situation has forced many graduates to consider setting up their own businesses. [Xinhua]

The document, entitled The Analysis of and Forecasts for Social Development (or the Blue Book on Chinese Society), said 38.4 percent of the 7,000 families interviewed had been affected by the unstable employment situation.

The figure is 8.4 percentage points higher than in 2006.

In urban areas, the unemployment rate is now 9.4 percent, twice the registered rate of 4.5 percent released by the Human Resources and Society Security Ministry, the report said.

Central and western parts of the country, which have less-developed economies, are facing a more severe unemployment situation than wealthy coastal areas, while big cities have a higher unemployment rate than small towns, it said.

Natural disasters and rising operational costs due to the global economic slowdown have caused thousands of small and medium-sized labor-intensive firms to close down this year, leaving millions of migrant workers jobless, the report said.

“The global financial crisis has had a profound effect on the Chinese economy and society,” Li Peilin, director of the CASS Institute of Sociology, said at a ceremony to release the report.

“The effects may go beyond our expectations and we have no clear idea how they will change society,” he said.

The report also said that the number of people graduating from college rose to a new high of 5.6 million this year. But as of August, just 70 percent of them had found work, it said.

By the end of the year, more than 1.5 million fresh graduates will be without a job, while 6.1 million others will enter the jobs market next year, it said.

“The unemployment rate for new graduates is over 12 percent, three times the urban registered unemployment rate,” Chen Guangjin, a professor with the Institute of Sociology, said.

“We should pay more attention to the problem,” he said.

Sociologists have also warned that the widening income gap between rich and poor will restrict the consumption power of middle and low-income families, especially during the economic recession.

The average income of 20 percent of the richest families is 17 times higher than that of 20 percent of the poorest ones, the report said.

The rich also own far more durable home appliances, such as refrigerators, mobile phones and computers, it said.

Just 4 percent of poor families have a computer, compared with 66 of rich families, it said.

“It is very important to improve the income situation in China in order to boost domestic demand,” Li Wei, a CASS researcher and one of the writers of the report, said.

Overseas Chinese return home to seek jobs

An increasing number of overseas-educated Chinese are returning home in search of jobs after graduation.

According to the Ministry of Education, more than 50,000 Chinese students will come back to the country this year, up from 25,000 in 2004.

The World Journal, a Chinese newspaper based in the United States, reported in late November, more overseas-educated Chinese were trying to find jobs back in China, as unemployment rates in other countries increased during the global financial crisis.

A senior state leader said Tuesday the Party and government will try its best to create a favorable working and living environment for them.

“When faced with the tough task of reform and development and fierce international competition in science and technology development, talent is the most important resource we must have,” said Jia Qinglin, chairman of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC), at the first meeting of a newly elected council of the Western Returned Scholars Association (WRSA) and Chinese Overseas-Educated Scholars Association.

In the past three decades since China’s economic reform and opening-up, an increasing number of Chinese, receiving higher educations abroad, have come back and contributed a lot to the country’s modernization, Jia said.

He said he expected them to also contribute to helping the nation survive international financial turmoil and to maintain moderate economic growth and social stability.

The WRSA, founded in 1913, has 13 branches across the world with more than 11,000 members.

It should play a better role as a bridge among overseas-educated scholars and the government, Jia said.

2009 China Holiday Schedule

Ok folks, it’s official! Now that the State Council has released its 2009 holiday schedule, we can start our planning and make full use of the precious vacation time for the coming year.

The intricacies of slapping on an extra day or two to really stretch out that 3-day weekend can sometimes be tricky. Stay local or jaunt to the near abroad? How does one overcome the teaming mass of humanity clustered at the airports and train stations? More importantly, How mad would your boss really be if you stuck ALL your vacation time right after that very meaty 8-day break in October? We’ll leave that to the tricky dicks out there.

It’s been rather common for office workers to start the work week on a Sunday after 3 continuous public holidays. Of course, not all companies abide by this schedule, and not everyone gets to take Saturdays or any time off at all.

New Year: January 1st (Thu) – 3rd (Sat). Back to work on January 4th (Sun.).

Lunar New Year: January 25th (Sun) – 31st (Sat). Back to work on February 1st (Sun).

Qing Ming Festival: April 4th (Sat) – 6th (Mon).

Labor Day: May 1st (Fri) – 3rd (Sun).

Dragon Boat Festival: May 28th (Thu) – 30th (Sat). Back to work on May 31st (Sun).

National Day and Mid-Autumn: October 1st (Tue) – 8th (Thu). Back to work on October 9th (Fri)

As you can see, there are no public holidays from June to September. This means if you have no planned vacation during this time, it will be a very long (and hot) summer.

Source: “Red Sea of Tourists” by stelzer

Jobless rate should be kept below 5% for stability

Social stability could be threatened if the registered urban unemployment rate rises above 5 percent next year, a senior lawmaker warned on Tuesday.

Zheng Gongcheng, a member of the National People’s Congress Standing Committee, told China Daily the jobless rate could rise next year from the current 4 percent because of massive job cuts.

His remarks come as policymakers are holding a three-day Central Economic Work Conference to discuss measures to create new jobs and keep the present unemployment level in the face of the global financial crisis.

“If the government can keep the registered urban jobless rate around 4.5 percent, everything would be okay,” said Zheng, also a leading scholar in social security at Renmin University of China.

But if the rate – which excludes migrant workers – rises above 5 percent, “it will lead to a series of negative consequences”. The number of poor urban residents will increase and living conditions in cities will be compromised, he said.

In such a situation, local governments would be prompted to hire more urban residents instead of migrant workers to keep the jobless rate low. It would leave millions of migrant workers without jobs and force them to return to the countryside.

That is the “last thing we want to see”, he said, because a drastic increase in the number of jobless migrant workers could pose a threat to social stability.

The job market in the labor-intensive exports sector shrank in the third quarter of this year because falling overseas demand has forced the closure of many factories.

The job market will reach a two-year low in the first quarter of next year as the global financial crisis takes its toll, according to a survey released on Tuesday.

Conducted by Manpower Inc, a leading global employment services provider, the survey shows the intention of employers in Beijing, Shanghai and Guangzhou for new recruits is the weakest.

“The global economic downturn and decline in exports have made employers more cautious about hiring new staff,” said Lucille Wu, managing director of Manpower Greater China.

Late last month, Zhang Xiaojian, vice-minister of human resources and social security said the government would be able to keep the urban registered unemployment rate below 4.5 percent this year, but the figure could rise in 2009.

The ministry, which said 24 million people would be competing for 12 million jobs next year, has submitted a job stimulus package to the State Council, or the country’s Cabinet, for approval.

The highlight of the package is the introduction of a special nationwide vocational training program, especially for laid-off and migrant workers, to help ease the pressure on the job market.

Local governments will provide most of the finance for the package by making full use of special employment and unemployment insurance funds, sources said.

“The unemployment insurance fund has topped 100 billion yuan ($14.5 billion), and it’s high time it is used,” Zheng said.

The country has more than 230 million migrant workers, with about half of them working away from their provinces. About 60 to 70 percent of them are below 28 and lack basic agricultural skills, Zheng said.

“The social trend shows more and more surplus laborers will migrate from rural areas to cities and become industrial workers. We should not drive them back to the countryside,” he said.

Civil service pay reform to continue

The government is going ahead with a nationwide reform of civil servants’ pay that includes raising the salaries of officials in poorer regions, despite the ongoing financial crisis, a publicity official from the Ministry of Human Resources and Social Security said yesterday.

“At present, we do not have any plans to amend or postpone the scheduled reform,” the official, who did not want to be named, told China Daily.

The salary reform is aimed at regulating the allowances and subsidies of the country’s 8 million civil servants, by reducing such payments in affluent areas and boosting them in poorer regions. The changes rolled out in July 2006 and are expected to be completed next year.

Civil servants in the Inner Mongolia autonomous region and in Henan, Hebei and Anhui provinces already saw their allowances raised from last month, the Sichuan-based West China Metropolis Daily reported yesterday.

Henan provincial authorities received the green light from the State Council to raise the monthly salaries of their officials by 300 yuan ($44) each in mid-November, the newspaper reported.

The move was part of the national reform to regulate civil servants’ pay and had nothing to do with the current financial crisis affecting economies worldwide, a Henan official said.

“We made the adjustment because our civil servants have complained about their low income for a long time,” said the official, who wanted to be known by his surname Wu, with the finance department of the Henan provincial government.

“The changes have nothing to do with the financial crisis. We submitted the requisite applications last year,” Wu said.

Still, other researchers said it was not the right time to continue with the salary reform.

“The timing is not good, as the global economy is in a recession and China is facing mounting economic pressure,” Su Hainan, head of the Institute for Labor and Wage Studies, was quoted by The Economic Observer as saying on Sunday.

The government should step up efforts to fight corruption and lessen tax for companies instead of increasing civil servants’ pay, Cao Jianhai, a researcher from the Institute of Industrial Economics at the Chinese Academy of Social Sciences, said yesterday.

“Increasing investment on rural education as well as rural infrastructure and agriculture are also among the government’s imminent tasks,” Cao said.