Category News of China

Wonderful wisdom of Wong winning through

Eva Wong, chairperson and president of Top Human Technology Limited, is to meet me at her office on the 58th floor of Plaza 66. The office exudes a confident, plush Oriental modernism and, with the view clouded, I absorb the rarified atmosphere as I wait.

The motto of Top Human is this: “Re-engineering the talent of people.” Lofty or what! Wong’s slight delay is due to her having just flown in from Canada, yet there’s not a trace of long haul about her. As fresh as a daisy, Wong has the air of someone who has just enjoyed a good joke.

“I’ve been living out of my suitcase for years now. I’m always traveling, I love it,” she laughs. One wonders how big her suitcase is.

Wong’s new book “The Power of Ren – China’s Coaching Phenomenon,” co-written with Lawrence Leung, outlines her unique philosophy for business management and coaching. As the name suggest, her philosophy puts people at its core.

The Hong Kong native’s approach involves elements of Buddhism, Confucianism and Taoism, and more than 100,000 top Chinese business people have benefited from the wisdom of Wong over the last 12 years.

My question as to how much she reckons her advice has added to the Chinese economy in total is met by knitted brows, followed by another heartfelt laugh. She turns to her able and attentive assistants, saying: “We should find out that sort of thing,” before exploding into laughter again. The answer is a whole lot, by the way.

Mystical might be over-egging it a little but there’s something about Wong that’s hard to fathom. Captains of Chinese industry, a demanding lot to be sure, pay handsomely for Wong and her colleagues to tell them how to improve their businesses. “Most of our business comes through word of mouth,” says Wong.

“I retired in 1990 and from then on I’ve been making my vision come true – of Top Human and of teaching people how to live their dreams and live their lives,” says Wong, President of China Coach Association.

Having formulated her vision, strategy and philosophy, she started out coaching just one student in Hong Kong in 1995.

She’s still the chief trainer, although now Top Human has offices in Vancouver, San Francisco, Singapore and in 10 major cities in China employing 500 staff. It’s one of the biggest coaching companies in the world. Preparations are well underway for public listing next year. Soon Top Human will occupy all of the 58th floor of Plaza 66.

“The coaching concept came from the States and from the sports field, so that management executives become the coaches who treat the staff like their athletes,” says Wong.

Top Human coaching, the power of Ren, is based on a nine-point plan in this order: Passion, commitment, responsibility, appreciation, giving, trust, win-win, enrollment and possibilities.

This point system stems from Confucianism, with two key points at its center: “Only when a man lives in accordance with his knowledge of both nature and people and becomes a well-learned person, can he manage his country and the world,” from “The Doctrine of the Mean.” From “The Great Learning” comes: “From the Son of Heaven down to the people, all must consider the cultivation of the person the root of everything else.”

“We have two main roles,” says Wong. “Firstly we coach senior business people, helping them improve their management style and their business. The other is to train people to become coaches.”

“In China, business is inextricably linked with personal relationships which is quite different from the West,” says Wong. “Entertaining business contacts out of the work environment is much less common in the West. Colleagues’ trust must be earned in China – then they will go the extra mile.”

The coaching takes the form of a two-hour one-on-one session where the client’s needs are determined. There then follows a six-month course with regular evaluations and team teaching, where those being trained can compare notes.

Courses cost 30,000 yuan (US$3,860). Courses mostly take place in Mandarin just now but moves are afoot to extend Top Human offerings to Westerners. See www.tophuman.com for details.

The book is a must-read for those doing business in China, particularly those who have found their Western- style approaches frustratingly ineffective. It’s a well-presented book that’s accessible, readable and packed with interesting case studies.

It can be bought at the Shanghai Foreign Language Book Store (tel: 6322 3200) priced 180 yuan (US$23).

CEO oustings on track for record

NEW YORK (CNN) — With an average of about seven chief executive officers departing per business day, 2006 is poised to be a record-breaking year for ousted CEOs, according to data compiled by CNN and a study conducted by Challenger, Gray and Christmas.

If the trend continues at its current rate, more than 1,570 CEOs will lose their titles by year’s end, up more than 200 from last year’s record number of 1,322.

In just the first 11 days of October, the corporate world has seen a turnover of 36 CEOs, including the resignations announced Wednesday at Internet media company CNET (Charts), software maker McAfee (Charts), and Sovereign Bancorp Inc. (Charts) During the first 12 days of September, the boards of Bristol-Myers Squibb Co. (Charts), Ford Motor Co. (Charts) and Viacom Inc. (Charts) elected new CEOs to lead the corporations.

Former CNET CEO Shelby Bonnie resigned while former McAfee CEO George Samenuk retired, but both left their posts in relation to stock options back-dating probes, a growing trend in recent months. Earlier this week, Monster Worldwide Inc.’s (Charts) CEO Andrew McKelvey, a 39-year veteran with the company, resigned from his leading post, pinning partial blame for his move on an investigation into the company’s stock options practices.

Since Oct. 1, five company executives – three CEOs, one chief financial officer and one president – have either resigned, retired or were fired from their posts after reports of option grants irregularities. Preliminary data compiled by Challenger, Gray and Christmas show nine companies entrenched in back-dating options scandals have lost their CEOs since January 2005.

According to the study, 32 CEOs have been fired from their jobs since the beginning of 2006, a third of them in September alone.

“It is rare for a CEO to be officially fired,” said John Challenger, chief executive officer of Challenger, Gray and Christmas. “Boards may apply pressure or force a chief executive to leave, but they often allow the executive to announce his resignation, thus sparing his or her dignity. It takes a major infraction for a CEO to be publicly fired.”

After more than 1,100 CEOs departed companies in 2000, the year the tech bubble burst and dot-com companies began imploding, the number of CEO turnovers began to gradually decrease year-by-year, dropping to 663 in 2004, but then jumping back up in 2005 setting the record to beat, according to CGL spokesman James Pedderson.

New firm to tap forex reserves

The government will set up a company to manage its hefty foreign exchange reserves, according to an influential newspaper.

China Securities Journal, which is owned by Xinhua News Agency, quoted unnamed “authoritative sources” as saying that the establishment of the State Foreign Exchange Investment Company would represent a major initiative to better utilize the country’s huge foreign exchange assets and to address the issues brought up by their accumulation.

China has the world’s largest foreign exchange reserves, which amounted to a whopping $1.07 trillion at the end of 2006, and are poised to swell further.

Premier Wen Jiabao said at the National Financial Work Conference last month that the country should “explore new means and extend channels” for the use of the money.

The assets are currently managed by the State Administration of Foreign Exchange (SAFE). A considerable part of the money is believed to have been used for the purchase of United States treasury bonds.

Economists have said that the reserves far exceed the amount needed for their main purpose international trade payments, paying back external debts and contingencies.

Lin Yifu, an economist at Peking University, said any excess should be allocated for better returns.

In late 2003, SAFE transferred $45 billion to Central Huijin Investment Co Ltd, which used the money to recapitalize State-owned Bank of China and China Construction Bank. The injection of the funds was a crucial step for the restructuring of two banks and their eventual listing.

Huijin has also invested in dozens of other State-owned banks and brokerages.

The China Securities Journal said the new investment company would raise funds by issuing renminbi bonds and use the money to purchase foreign exchange reserves from SAFE.

This will help reduce excessive money supply, which is created by the huge amounts of renminbi that the central bank has to put into the market when it buys foreign exchange from enterprises to maintain the stability of the currency.

Excessive money supply is partly responsible for the country’s high fixed asset investment growth in the past few years. Fixed asset investment growth, which stood at 24 per cent last year, has in recent years been deemed a major threat to the health of the economy.

Residence system blocks city’s open job market

THE city’s approval system for granting permanent residence to non-locals who graduate from a Shanghai university is discriminatory and blocks the free flow of the job market, according to one university president.

He Qinhua, president of East China University of Politics and Law and a deputy to the Shanghai People’s Congress, has proposed changing the system.

He suggested the city government grant a residence card to every migrant graduate who applies to work in the city and then issue permanent residence permits to the best of those graduates after a trial period.

To control the city’s population expansion, non-native university graduates who wish to stay in the city are graded based on the university they attended, academic background, foreign language ability and computer skills, as part of a system that went into place in 2004.

Only those who meet the minimum level, which will be announced by the Shanghai Education Commission every spring, are eligible for a Shanghai residence permit.

About 11,000 migrant graduates obtain a residence permit every year, accounting for 25 percent of non-locals who graduate from city universities.

He said graduates from renowned universities aren’t necessarily superior to others. Deliberate government intervention has violated the modern free job market, he said.

Shenzhen leads external trade

Shenzhen, an economic engine in south China’s Guangdong Province, realized 237.4 billion U.S. dollars in foreign trade last year, a growth of 29.8 percent over the year-earlier level.

Local customs sources said Monday that this is the first time the city ranked first among major Chinese cities in terms of external trade.

The total trade volume included 136.1 billion U.S. dollars in export value, up 34 percent, and 101.3 billion U.S. dollars in import value, up 24.6 percent.

The exports, making up 14 percent of China’s total, placed Shenzhen first among major cities for 14 consecutive years.

In 2006, Shenzhen sold abroad 69.62 billion U.S. dollars worth of new- and high-tech products, or 40 percent of the city’s total, and bought from overseas 59.5 billion U.S. dollars worth of such products, or 50 percent of the total.

The exports of new- and high-tech products were 32.3 percent higher than the year-earlier level, while the imports, up 27.5 percent, the customs sources added.

China to set up three Confucius institutes in C., W. Asia

URUMQI — China will set up three Confucius Institutes in central and west Asia this year to satisfy the growing demand for Mandarin, China’s official language.

Preparations for the three institutes in Russia, Kazakhstan and Kyrgyzstan are well underway, said Wang Lili, director of the Foreign Affairs office of Education Department in northwest China’s Xinjiang Uygur Autonomous Region.

The Education Department, which was authorized to set up Confucius institutes in neighbouring countries, will cooperate with the education authorities of the three countries to complete the project, Wang said.

“Starting March 1, we will begin recruiting volunteer teachers in Xinjiang and train them in Chinese language teaching methods,” she said.

Wang attributed the surging demand for Mandarin learning in central and west Asia to the growing economic and trade exchanges between China and its neighbouring countries.

“Confucius institutes will not only meet the demand to learn Chinese but also help people better understand China,” she added.

Confucius institutes are non-profit schools specializing in Chinese language education and cultural communication. They have become an important means of expanding Chinese teaching abroad and stepping up understanding between China and rest of the world.

The world’s first Confucius Institute opened in Seoul in 2004.

The first group of 25 Confucius institutes around the world were officially acknowledged by the Chinese government in July 2005 and the number has now increased to 123 in 49 countries and regions.

According to plans of the Office of Chinese Language Council International (OCLCI), China will have 500 Confucius institutes by the end of 2010.

Confucius (551 BC-479 BC) is one of the most famous thinkers, educators and philosophers in Chinese and world history. He revolutionized education in China 2,500 years ago by making it accessible to commoners.

Lenovo sets its sights on buyers in US

CHINESE personal-computer giant Lenovo Group Ltd said it plans to enter the consumer market in the United States within the next two years.

“You’ll see us getting into consumer business,” William Amelio, Lenovo’s chief executive officer, said in an interview with Bloomberg News. “We’ve demonstrated success in China and India, and there’s no question we should have the same success in other developed markets.”

Amelio, speaking on Saturday at the World Economic Forum in Davos, Switzerland, said acquisitions were “way down my priority list.”

Lenovo became the world’s third-biggest personal computer maker when it bought the PC unit of International Business Machines Corp in May 2005.

“In China we cover consumers up to large enterprises with a full line,” he said. “Abroad, what we bought is primarily large accounts and government. Now we can fill in that space.”

China’s economy posts biggest rise in a decade

THE Chinese economy grew 10.7 percent in 2006 – the biggest increase in 10 years, even as the nation’s financial leaders tried to rein in excessive growth.

Their efforts did appear to have some effect in the last quarter, however, as the blistering pace tailed off slightly with a decline in fixed-asset investment.

Gross domestic product mounted to 20.94 trillion yuan (US$2.7 trillion) in the world’s fourth-largest economy last year, driven by overseas sales, investment and booming domestic consumption, the National Bureau of Statistics said yesterday.

Yearly growth exceeded the 10.4 percent gain in 2005, the bureau said. But after GDP peaked at 11.5 percent in second-quarter 2006, the rate of increase tailed off to 10.4 percent in the last three months.

“A combination of policies to rein in lending and control land use helped prevent the economy from expanding faster,” Xie Fuzhan, chief of the National Bureau of Statistics, said in Beijing.

Among the economy’s major components, the manufacturing sector grew the most last year, surging 12.5 percent to 10.2 trillion yuan. It was followed by the service industry, which advanced 10.3 percent to 8.27 trillion yuan. Agriculture rose five percent to 2.47 trillion yuan.

The country’s macroeconomic controls finally began to gain traction. Fixed-asset spending rose 24 percent to 10.99 trillion yuan overall, slowing from the 29.8 percent in the first half and 25.7 percent in 2005. Investment in the nation’s urban fixed assets climbed to 9.35 trillion yuan, up 24.5 percent from a year earlier, compared with a 27.2 percent on year gain in 2005.

“Investment growth showed visible deceleration, which could be partially attributed to policy tightening in the second half of 2006,” said Liang Hong, an economist in the global investment research division of Goldman Sachs.

“The central bank will likely maintain a tightening bias during the first quarter this year to prevent a rush in bank loan approvals.”

The central bank has stepped up land controls to make project approvals harder to come by, hiked interest rates and raised banks’ reserve requirements to curb credit and cool off an investment boom that has left the country with too much production capacity and idle factories.

Among other economic barometers, inflation last year stood at 1.5 percent, buffeted by a sudden increase of 2.8 percent in December as grain costs surged.

Still, the growth rate in consumer prices was smaller than the 1.8 percent in 2005.

Retail sales jumped 13.7 percent in 2006 to 7.64 trillion yuan, up from the 12.9 percent gain a year earlier as the government cut taxes, raised minimum wages and increased spending to improve education, welfare and health care.

Disposable incomes among the nation’s city dwellers advanced 12.1 percent to 11,759 yuan while those in rural regions climbed 10.2 percent to 3,587 yuan.

Foreign trade jumped 23.8 percent to US$1.76 trillion, yielding a record surplus of US$177.5 billion, up from the US$102 billion in 2005.

Services Trade With China Boosts US Jobs, Payments

January 23, 2007 — The dramatic expansion of trade and investment in services between China and the United States has benefited both economies substantially and will continue to do so for the foreseeable future, according to a new study by Oxford Economics. The study shows that the US could add as many as 240,000 new, high-paying service industry jobs by 2015 as a result of the growing trade with China, in which the United States has a balance of payments advantage.

The study, “The Prospects for US-China Services Trade and Investment,” was released today by the China Business Forum, the educational and research arm of the US-China Business Council (USCBC).

“This study shows that the future benefits are clearly significant for both the US and Chinese economies if China continues to open its service sector to foreign providers,” said John Frisbie, president of the USCBC. “The US is the world’s leading service economy and this is an important area for growth.”

Trade and foreign investment in China’s service sector already benefit both economies, according to the study. The United States has a services trade surplus with China, worth $2.6 billion in 2005. Net US service sector exports and income of service sector investments to China, worth $3.1 billion in 2005, currently support 37,000 jobs in high-productivity sectors of the US economy.

If the pace and scope of China’s service sector reform accelerate, the US services trade surplus with China could increase to around $60 billion by 2015, and extra income from US service-related investments in China would be worth $7 billion. The average US household would be better off by about $500 per year in 2010 as a result of this growth in services trade with China. By 2015, the US benefits would include the 240,000 new service sector jobs.

In the long run, US service sector exports to China could reach between 1.5 percent and 3.5 percent of US GDP. The US service sector trade surplus with China could be worth around 1 percent of US GDP, while inflows of profits from US service sector investments in China could contribute a further 0.5 percent of GDP to the US current account of the balance of payments.

“Our research shows that implementing China’s World Trade Organization commitments is an essential first step to maximizing the advantages for both economies of service sector trade and investment. If China increases the pace and scope of reform in the sector, the benefits will be even more substantial and long-lasting,” said Erik Britton, director of Economics at Oxford Economics and lead author of the study.

If the impediments to service sector growth in China are fully removed, the average Chinese household would be better off by $300 to $400, or RMB 2,300 to RMB 3,100, per year by 2015. The benefit would amount to an additional $138 billion in GDP (in 2006 prices). In this scenario, the growth in service sector trade and investment will add up to 7 million jobs in China in relatively high-paying, high-productivity service industries by 2015.

“As China’s economy shifts toward one based on services, consumption — and possibly imports — may rise. This would provide even more opportunities to US companies selling to China,” USCBC President Frisbie said.

About the China Business Forum and the USCBC

The China Business Forum, Inc. (www.chinabusinessforum.org) was established by the US-China Business Council (USCBC, www.uschina.org) to promote broad-based policy discussion and greater understanding in both China and the United States of the economic systems and business methods of each country and of the role of commerce in the overall relationship between the United States and China.

The USCBC is the leading organization of US companies engaged in business with the People’s Republic of China. Founded in 1973, the USCBC provides extensive China-focused information, advisory, and advocacy services, along with events, to nearly 250 US corporations operating within the United States and throughout Asia.

About Oxford Economics

Oxford Economics (www.oef.com) is one of the world’s leading providers of economic forecasting, analysis, modeling, and advisory services. Oxford Economics supplies a range of “off-the-shelf” products and services in addition to customized economic consultancy services, with staff in London, Oxford, and Philadelphia.

China’s 1st OTC market likely to be in Tianjin

CHINA’S first national over-the-counter equity bourse is likely to be set up soon in the northern city of Tianjin as part of moves to build a multi-layer capital sector, industry sources said yesterday.

The establishment of the OTC exchange is now subject to a final nod from the National Development and Reform Commission, the nation’s top economic planner, said people with direct knowledge of the plan.

China’s mainland has two main boards in Shanghai and Shenzhen, a small- and medium-sized enterprise board in Shenzhen as well as an OTC trading system for Beijing-based technology firms.

Analysts believe the OTC bourse, to be sited in the Binhai New Area, a state-backed economic zone, will bolster Tianjin’s lure as a new financial hub apart from Shanghai.

“I guess that’s more or less related to political balance,” said a senior stock analyst in Shanghai. “On the southern coast, we have Shenzhen as a financial center and on the eastern (coast), Shanghai. And now it’s time to have a northern one.”

Tianjin’s OTC market will only be available to institutional investors, the sources said. Companies traded on the bourse can apply to list on the main boards if they meet the listing criteria, sources said.

“The OTC bourse in Tianjin will be open to host all domestic companies that temporarily fail to meet main-board listing requirements,” said a Tianjin-based source.

The sources noted setting up the Tianjin bourse will basically complete moves to create a multi-tier equity market. Big cap firms will list in Shanghai, medium ones in Shenzhen and small firms may trade on the Tianjin OTC market, they said.