Category News of China

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.

Advisors call for measures to raise migrants’ salaries

Political advisors Wednesday called on the government to make greater efforts to raise migrant workers’ salaries and ensure they have a better standard of living.

With more than 200 million such workers in cities across China, how to better protect their rights and interests has become a crucial issue, members of the country’s top political advisory body said Wednesday in Beijing at a meeting on achieving more balanced development between urban and rural areas.

They also called for substantial measures to be taken to provide these workers with insurance for workplace injuries, better educational opportunities for their children and more affordable housing.

Li Zhuobin, a member of the Standing Committee of the 11th National Committee of the Chinese People’s Political Consultative Conference (CPPCC), said migrant workers still face employment discrimination and poor access to public services.
Citing the construction industry as an example, he said migrant workers’ salaries could be two-thirds or half that of their urban counterparts.

In other cases, employers refuse to hire workers without urban permanent residence permits.

“Many employers do not pay them on time,” said Li.

“In sectors that hire a large number of migrant workers, such as construction, catering and entertainment, the government should be strict on implementing the salary deposit rule,” he said.

The rule, introduced in May 2004 by the former Ministry of Labor and Social Welfare, requires construction companies to deposit a certain amount of money in a labor department bank account. The money is used to pay migrant workers who fail to receive their due salaries.

In addition, the training of rural workers fails to fully meet employers’ requirements and the public employment service’s efforts to help migrant workers find jobs are inadequate, he added.

Li suggested that preferential policies to promote employment should cover both urban and rural residents.

Shenzhen looks to fill 560,000 jobs

Authorities in Shenzhen are looking to attract 560,000 workers from rural areas of Guangdong over the next five years in a bid to counter rising labor costs, a provincial official said on Tuesday.

“Shenzhen’s ambitious plan is part of the province’s double transfer strategy,” Lin Yingwu, deputy director of the Guangdong labor and social security department.

“Other cities in the delta region will follow suit,” he said

The aim of the strategy is to attract workers to the manufacturing centers of the Pearl River Delta, as well as relocating some production bases to areas with large workforces in a bid to reduce soaring labor costs, he said.

Four industrial parks, funded by the Shenzhen and local governments, have already been built in rural areas of Guangdong, the Nanfang Daily reported recently.

Shenzhen has signed labor cooperation agreements with 14 rural cities, and on Monday, 128 employers from the city offered about 40,000 vacancies, with monthly salaries ranging from 1,300 yuan ($190) to 2,500 yuan, Lin said.

Labor departments in Shenzhen and the 14 cities will work together to improve communications and facilitate the movement of workers, Guan Lingen, director of the Shenzhen labor and social security bureau, said.

Also, online interviews will be held wherever possible to eliminate travel costs, he said.

Li Qingqing, an associate professor of economics at South China Normal University, said the double transfer strategy will be beneficial to all the cities involved.

“Under the plan, delta boomtowns will no longer need to worry about the shortfall of laborers, while the growing rural population will be able to find better ways to make a living,” she said.

HK jobless rate declines to lowest

HONG Kong’s employment continued to improve from May to July with the jobless rate dipping to 3.2 percent, the lowest level in a decade, according to latest statistics of the Census and Statistics Department released yesterday.

Declines in the jobless rate were recorded in the construction, transport and import-export trades from May to July compared with April to June, according to the department.

Total employment rose by 1,400 to 3,53 million while the labor force surged by 4,500 to nearly 3,66 million.

From May to July the number of jobless people rose by 3,100 to 124,600 while the number of underemployed grew by 2,100 to 69,900.

The department’s data also showed the underemployment rate remained stable at 1.9 percent from April to July.

Declines in the underemployment rate were mainly recorded in the decoration and maintenance, welfare and community services and sanitary services sectors, offsetting rises in the foundation and superstructure construction, and amusement and recreational services sectors.

The total labor force grew mainly due to fresh graduates and school leavers entering the job market, the department said.

With a relatively satisfactory absorption of these newcomers and increased job opportunities in the construction sector, the number of unemployed people only recorded a mild rise.

While welcoming the latest fall in the jobless rate, Secretary for Labor and Welfare Matthew Cheung said the Hong Kong government would do its best to promote employment on all fronts and help those adjusting to the increasingly knowledge-based economy through training, retraining and skill upgrading.

Surplus labor pool shrinking

China’s labor market is in the pincer grip of dwindling surplus labor on one hand and growing unemployment on the other as a result of mass closures of outdated factories.

Apparently contradictory, these two rising trends have come to define the labor market of late. Employers are finding it difficult to find suitable workers and employees are scratching heads in their search for ideal positions.

In terms of labor supply, which has long been seen as a factor in the nation’s economic miracle, China has already entered a complicated era of a dwindling workforce and a shortage of skilled workers.

But don’t panic.

Cai Fang, a senior think tank economist from the Chinese Academy of Social Sciences, assured the Chinese leadership while correcting the widely accepted perception that China’s labor supply is still endlessly abundant.

According to some economists, the number of surplus laborers in rural areas alone surpasses 150 million, equivalent to half of the US’s total population.

But Cai insisted that this figure was inaccurate. He said 52 million would be a more realistic estimate.

Cai reported the research result when China’s highest leaders lent their ears to the country’s top-level economists in July to find solutions to the current economic headaches.

“Our research finding has revealed that surplus labor is far less than we expected,” said Cai, who is also a member of the Standing Committee of the National People’s Congress.

The number of surplus laborers is declining in rural regions. Cai assured the leadership, currently puzzled by rising inflation, energy supply and possible economic slowdown, that by 2020, China’s labor supply would increase at an encouraging pace.

To ensure a healthier economy, Cai said China needs to upgrade its economic structure and further improve the treatment of laborers and equip them with new skills and knowledge.

As a result, the pro-business institutional and economic measures were introduced. And the companies involved, especially those in manufacturing, energy, information technology and agriculture, may get the lion’s share of R&D investment.

But these measures, which are aimed at sustaining this economic growth miracle, cannot necessarily lead to rosy employment prospects, especially for the poor. And since last year, the government has been determined to close the labor-intensive but energy-crunching factories. The closure plan will be extended to 2010.

The impact is obvious as many of China’s factories are labor-intensive. This is causing and will continuously result in unemployment, said Liu Junsheng, a senior researcher from the Labor-Wage Institute affiliated to the Ministry of Human Resources and Social Security.

The economic growth rate has slowed to 10.4 percent for the first half of this year, from 11.5 percent during the same period last year. The 1 percentage point drop means a loss of about 1 million jobs, Liu said.

“If the trend continues in the coming months, more workers will lose their jobs,” said Liu.

China created 6.4 million jobs in the first half of the year, which represented 64 percent of the government’s target of generating 10 million new jobs in 2008. Behind the figures lies the harsh reality: employment is not only a longstanding problem for job hunters but also a new headache for employers.

Finding a job is challenging in China and this year, has been extremely hard, as the country has experienced so many unexpected events.

The earthquake and snowstorms have closed down some enterprises. On top of that, at least 5.59 million students have graduated from colleges this year, 13 percent more than last year, and they face unprecedented pressure in the job market as about 700,000 graduates, who could not find work last year, will compete with them for employment.

Along with the steady rise in labor costs, factories and companies also face difficulty in finding “suitable hands” to feed the vacancies as some job hunters lack training. And for export-oriented companies, the appreciation of the yuan has exposed them to difficulties in expanding business.

Generally China has had strong economic growth but this has not been matched by equally strong job creation.

51job Chinese Recruiter Lowered

51job Inc.’s (JOBS) financial results for the second quarter showed a lower net profit margin due to higher sales and marketing expenses and a higher tax rate. Both its revenue and EPS missed the market consensus.

Although 51job continues to have the highest brand recognition in the online and offline recruiting markets in China, the leading position hasn’t gained any competitive advantage for 51job to improve its profit margin. Therefore, we are downgrading the stock from Buy to Hold.

China has 253 million internet users as of the end of June 2008. It has approximately 750 million workers now and more and more companies of different size begin to use low-cost online recruiting. This is a very positive tail wind environment in which to operate. Additionally, it is estimated that revenue of online recruiting services in China will reach RMB 2.63 billion in 2011. According to estimates, revenue of online recruiting services will amount for 45.3% of the total recruiting market in 2010.

Through a targeted sales and marketing strategy, 51job has been focusing on further building the ’51job’ brand as the ‘one-stop’ human resource services provider. Now 51job is the most famous brand in the recruiting market in China and this position has helped the company enter more profitable second-tier cities in China.

Using a P/E multiple of 18.2x our fiscal year 2009 earnings per ADS estimate of $0.70 yields a target price of $12.75, which can reflect company’s great growth prospects, in our view.

Beijing bar boss recruits Sichuan students

A businessman in Beijing has given fresh hope to a group of young women from Sichuan following the tragedy of the May 12 earthquake.

Singaporean Danny Chang, who has lived in China since 1997, opened a new bar “1/5” in east Beijing’s embassy area early last month.

“I was wondering what a businessman like me could do to help, apart from just donating money,” the 38-year-old said at his bar Monday.

Then a friend from Chengdu came up with the solution, he said: hire people from Sichuan.

“I thought it was really a good idea, so I flew to Chengdu immediately,” he said.

His friend took him to a job fair at Sichuan College of Education, where lots of students were looking for jobs.

After chatting with dozens of candidates, Chang chose 12 young women – mostly third-year students majoring in tourist management – and offered them one-year internships.

But the recruitment process was not all plain sailing for the generous bar owner.

With his left arm tattooed with a totem pole and his right draped with a dozen silver bracelets, many students mistook the 1.9-m-tall Chang for a gangster.

Henna, a 22-year-old from Deyang, Sichuan, who managed to land one of the jobs, said Monday: “At first, we all thought he was a mafia boss. Some of my friends even told me not to go, because they thought it might be a trap,” she said.

But Chang said he wanted to be honest and open with the candidates, which was why he did not cover up his arms.

As long as the applicants met the basic criteria, the jobs were offered on a first come, first served basis, he said.

“I was there to help people, not to be picky. If you have passion, you’re qualified,” he said.

The 1/5 interns work eight hours a day, six days a week. They can earn up to 1,000 yuan a month and also get free accommodation and meals.

But the internships are not about money or benefits, Chang said. They offer the girls the chance to learn about the industry and get some really useful work experience.

“They’ll learn about cash flow, hosting, bar tending and service, which are all really useful skills,” Chang said.

To help them acclimatize, Chang said he has also taken his newest workers out on shopping and sightseeing trips, and even to a club one Sunday night, his only day off.

He said he was impressed at how quickly some of them had picked up English, something he attributed to the nights they spent chatting to the bar’s foreign customers.

“They spoke little English when they arrived, but they are getting much better.

“In six months’ time, they’ll be confident enough to chat with people from anywhere in the world,” he said.

Soaring ad income boosts Sina’s profit

China’s biggest Web portal Sina Corp reported its profit jumped 74 percent in the second quarter of this year backed by soaring advertising income.

Its net income grew to 25.2 million U.S. dollars, or 42 cents a share, and its revenue soared 53 percent to 91.3 million U.S. dollars in the period, beating its estimate of 90 million dollars, Sina said yesterday.

The Shanghai-based company’s online ad income grew 58 percent to 64.9 million dollars and non-ad revenue rose 42 percent to 26.4 million dollars.

“We are very proud of our record revenue and earnings in the second quarter. Our online advertising business in China, in particular, continues to be robust, growing 58 percent year on year, and was a major driving force in allowing us to achieve a net income growth of 74 percent year on year,” said Charles Chao, CEO of Sina. “We expect Sina’s advertising momentum to further accelerate in the third quarter, as we are prepared to provide an unprecedented online media coverage of the Beijing Olympic Games.”

Sina predicts its third-quarter revenue between 100 million dollars and 104 million dollars, with ad income at 75 million dollars to 77 million dollars.

Credit Suisse said in a report that Sina’s ad business will continue to grow next year backed by its status in the industry, excellent sales team and brand value.

China’s 51job Q2 net profit down 37.8 pct on soft demand, costs

BEIJING (XFN-ASIA) – 51job Inc (NASDAQ: JOBS) said second quarter net profit fell 37.8 pct year-on-year to 2.8 mln usd on softening market demand for recruitment services and higher operating costs.

The Chinese human resources online services firm said second quarter revenue increased 4.2 pct to 31.9 mln usd while operating costs rose 16.8 pct to 12.3 mln.

Earnings per share stood at 0.10 usd.

Rick Yan, president and chief executive officer of 51job (nasdaq: JOBS – news – people ), said hiring by users of its service was sluggish in the second quarter, amid higher labor costs and slower economic growth.

‘We expect recruitment activity in the third quarter to further moderate as we believe regulations

instituted by the government for the Olympic Games will restrict normal business practices for companies in Beijing and indirectly affect businesses nationwide,’ Yan said.

The company has a third quarter revenue target of 29.9-31.3 mln usd.

(1 usd = 6.8 yuan)

Survey: More Shanghai people unhappy about income

More citizens of China’s eastern metropolis of Shanghai were not satisfied with their salaries and may postpone buying houses or cars, a survey shows.

The income index for the second quarter of this year set a record low of 114.8 points, 3.8 points lower than that of the first quarter and 7.5 points lower than the last quarter of 2007, according to the survey on consumption confidence conducted by Shanghai University of Finance and Economics (SUFE).

Among the 1,000 surveyed, 13.3 percent said their income shrank over the past year, 4.4 percent higher that that of the first quarter. People’s employment expectation index dropped by 23.5 to stand at 84.7 points, and 35.9 percent of the surveyed were pessimistic about job opportunities in the second half of the year.

In addition, 62.6 percent Shanghai citizens thought it was not a good time to buy houses right now, and 55.7 percent would not consider buying one this year.

The survey also shows that about half of the surveyed were negative about buying cars either now or in the second half of the year.

However, official statistics showed that the annual per capita disposable income in Shanghai’s urban areas last year increased by 14.3 percent as against that of 2006, and that in rural areas increased by 11 percent year on year.

The Chinese stock markets have fallen drastically since October last year, while the consumer price index has continued to rise, both hitting people’s incomes, according to Xu Guoxiang, professor of economics with SUFE.