Shanghai white-collar best paid

Shanghai overtook Beijing to be the best paid city for white-collar workers in the first quarter of this year, recruitment portal Zhaopin.com said yesterday.

White-collar workers in Shanghai were the best paid on the Chinese mainland with a monthly average salary of 8,825 yuan ($1,362), followed by Beijing at 8,717 yuan.

Shenzhen was third at 8,141 yuan, Zhaopin.com said in a report based on job positions posted on the website.

The best paid jobs in Shanghai were in professional services such as treasury, legal and human resources drawing an average monthly salary of 13,449 yuan, ahead of 13,049 yuan paid for positions in the energy sector.

Joint ventures and listed companies were the most generous employers, while private companies and government-backed organizations paid the lowest salaries, the report said.

But state-owned companies remained the most popular among job seekers who preferred stability.

China’s manufacturing activity rebounds

China’s manufacturing activity rebounded to the highest level since last August in March, thanks to the government’s continued structural reforms, official data showed on Friday.

The purchasing managers’ index (PMI) came in at 50.2 in March, up from February’s 49, according to the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing.

A reading above 50 indicates expansion, while a reading below 50 reflects contraction.

NBS statistician Zhao Qinghe attributed the rebound to the government’s pro-growth measures, as well as the rising demand of manufacturing imports and exports.

The price rebound of major international commodities spurred purchases. Technology upgrades also contributed to improvement of manufacturing sectors, said Zhao.

The sub-index measuring production stood at 52.3, up 2.1 points from a month earlier, with that for new orders settling at 51.4, up 2.8 points.

The sub-index for imports came in at 50.1, up 4.3 points from February, the highest reading since December, 2013.

300,000 clothing merchants relocated from Beijing to Hebei

(ECNS) — About 300,000 clothing merchants whose factories are based in Zhejiang Province have relocated their business from Beijing to neighboring Hebei Province, part of a broader plan for the integration of Beijing, Hebei and Tianjin Municipality, Beijing Youth Daily reported.

The garment association under the Zhejiang Chamber of Commerce in Beijing said some 500,000 people are expected to move to Hebei as their companies relocate.

The relocation plan aims to promote the coordinated development of Beijing, Tianjin and Hebei, to create new growth sectors and address challenging issues including population control and environmental protection.

Among the companies, more than 70 have set up new headquarters in Yongqing County of Hebei’s Langfang City.

The capital city is home to around 800,000 businessmen from the coastal Zhejiang Province, a region historically known for its entrepreneurship, and 300,000 of them work in the garment industry, said Lu Jiansheng, executive vice-chairman of the Zhejiang Chamber of Commerce in Beijing.

These people mainly arrived in Beijing in the 1980s and 1990s, but the businesses face growing costs related to human resources and land, so the relocation will provide a new opportunity, added Lu.

Lunzhuo Clothing Co. Ltd. was based in Beijing’s Daxing District and mainly sold clothes wholesale at the capital’s most well-known clothing market Dahongmen since 1997.

Zheng Chunfa, a native of Zhejiang province and also president of Lunzhuo, said his company faced difficult conditions in Beijing, including a 27-square-meter dorm crowded with eight employees.

Now the company has moved to Langfang, where it has its own buildings and better conditions for employees.

Le Sports completes 2nd round of funding, valued at 21.5b yuan


A Le Sports stand at a golf merchandise expo in Beijing.

Latest cash injection of $1.23 billion puts company on way to building sports ‘ecosystem’

Internet-based company Le Sports has completed a second round of financing, worth 8 billion yuan ($1.23 billion), which analysts said gives it a significant edge over rivals.

Jia Yueting, CEO and chairman of parent company LeEco Holdings Ltd, said on Sunday its sporting offshoot is now valued at 21.5 billion yuan.

The latest cash injection means Le Sports’ investors include HNA Capital Group Co, the investment unit of Chinese airline giant HNA Group Co Ltd, and a number of individual investors such as Sun Honglei, a famous actor in China.

Jia said the latest round was “recognition of our broad plan to build an ecosystem, which spans sports, video streaming, electric vehicles and smartphones”, adding the company continues to integrate resources from various industries.

No details were given on how the latest investment might affect LeEco’s majority ownership of Le Sports, but the firm added in a statement the new cash will be used to enrich its sports-related online content, and develop new smart equipment to meet people’s growing desire to stay fit.

Le Sports, which became an independent unit from LeEco’s video-streaming service two years ago, is one of the fastest-growing companies in China’s sports sector.

In May, it raised 800 million yuan from investors including Wanda Investment Co.

Its second funding round comes as Chinese Internet heavyweights are rushing to branch into the sports sector, an industry that is winning favorable policies from the central government.

Alibaba Group Holding Ltd and Tencent Holdings Ltd, for instance, are both expanding their presence through investment and partnerships.

Jiang Qian, an analyst at Beijing-based Internet consultancy Analysys International, said the deal demonstrated investor confidence in Le Sports.

“Le Sports has won exclusive online broadcasting rights to a series of top-tier competitions in recent years, which is a strong proof of the company’s marketing and organizing capabilities,” Jiang said.

In February, Le Sports spent 2.7 billion yuan on becoming the exclusive online broadcasting partner of Chinese Super League, the country’s top soccer event, after winning the broadcasting rights of the English Premier League and the National Football League in the United States.

“Its abundant sports content is the biggest advantage of Le Sports, from which the company can build a sizable user base and offer other services such as selling sports game tickets and lotteries,” Jiang said.

China’s industrial profits return to growth


Workers are occupied on a production line at a factory in Xinzhuang industry zone in Shanghai, east China, July 30, 2015. China’s economy grew by 6.9 percent in 2015.

Profits of China’s major industrial firms rose 4.8 percent year on year in the first two months of 2016, reversing the downward trend of last year, official data showed Sunday.

Profits at industrial companies with annual revenues of more than 20 million yuan (about 3.1 million U.S. dollars) totaled 780.7 billion yuan in the Jan.-Feb. period, the National Bureau of Statistics (NBS) said.

The profits registered a 4.7 percent year-on-year fall in December and a 2.3 percent annual decrease in 2015.

He Ping, an official with the NBS Department of Industry, attributed the latest profit growth to increased sales and a milder decline in factory product prices.

In the first two months, revenues from the firms’ primary business climbed 1 percent year on year, improving from a 0.6 percent drop in December 2015 and a 0.8 percent increase for last year.

In the Jan.-Feb. period, China’s producer price index, which measures prices of goods at factory gate, slipped 5.1 percent year on year, narrowing from a drop of 5.9 percent in December and 5.2 percent for 2015.

Despite the recovery, part of the industrial profit growth was a result of the lower base in the same period of last year, He noted.

Industrial profits dipped 4.2 percent year on year in the Jan.-Feb. period of 2015, NBS data showed.

Compared with the same period of 2014, the Jan.-Feb. industrial profits of this year only inched up 0.4 percent, said He.

Chongqing, Zhoushan favorites as new free trade zones

Chongqing, and the coastal city of Zhoushan, in Zhejiang province, are being tipped by shipping experts as hot favorites to be chosen as new free trade zones for the third round selection, as the central government devotes more resources to developing the Yangtze River Economic Belt within its 13th Five-Year Plan (2016-20).

Eager to enhance the earning ability of inland regions, China has been keen to support the growth of city clusters in the Yangtze River Economic Belt, which comprises the Yangtze River Delta, the middle reaches of the Yangtze and Chengdu-Chongqing region, as well as encouraging more foreign companies to invest in central and western regions.

The central government is also likely to give priority to restoring the Yangtze valley’s ecological conditions, while pressing ahead with efforts to develop an integrated transportation and modern industrial corridor within the country.

China’s existing four FTZs offer a range of incentives, including more favorable interest rates, reduced tariffs on goods and trade, the use foreign currencies for payment, liberalized financing agreements, and other offshore financial services.

But with all of those in coastal regions, Dong Liwan, a shipping industry professor at Shanghai Maritime University, said Chongqing especially is seen as a strong likely new FTZ location.

“Selecting Chongqing as a new free trade zone would result in upgraded development of the Yangtze River Economic Belt, where growing shipping activities offer a diversified business platform for 11 provinces and municipalities including Jiangsu, Anhui, Hunan and Hubei,” said Dong.

Already officials have expressed an interest in accelerating the developing pace of Wuhan, the inland capital city of Hubei province, Chongqing and Nanjing as regional shipping and logistics centers, which can act as river-ocean and water-railway combined-transportation hubs.

Zhoushan, however, has become a favorite given its existing transshipment cargo and logistics facilities, and strong transport links with the rest of the country, both by water and rail.

The city has rare deep-water port facilities, and is located strategically, close to the T-shape intersection of the Yangtze River and the coastline.

The integration of Zhoushan Port and nearly Ningbo Port was started in 2006, and their throughput has been counted together since.

They officially merged into one in September 2015, and recorded container throughput of 20 million twenty-foot-equivalent units for the first time last year.

Chen Yingming, executive vice-president of the Shanghai-based China Ports and Harbors Association, said Zhoushan already has plans to focus on FTZ-related shipping and finance services.

China’s largest land port to expand capacity

Manzhouli, China’s largest land port, is expected to see its annual highway cargo handling capacity climb to 10 million tonnes within the year from the current 3 million tonnes.

The improvement will be the result of the first-stage of a project aimed at upgrading road services of the port, which borders Russia to the north and also sits close to Mongolia, according to the government of Manzhouli City, north China’s Inner Mongolia Autonomous Region.

The first-phase construction will be finished by the end of October. With an estimated investment of 1.03 billion yuan (about 159 million U.S. dollars), the construction of the overall project started in 2015 and is scheduled to end in 2017.

More than 65 percent of overland trade between China and Russia passes through Manzhouli.

Taiwan jobless rate at 16-month high in February

Unemployment in Taiwan stood at 3.95 percent last month, a new high since October 2014 mainly due to holiday factors.

The jobless rate in February was up from 3.87 percent for January and 3.69 percent in February 2015, said a press release from Taiwan’s statistics agency on Tuesday.

The number of unemployed people rose slightly to 462,000, compared with a total of 11.23 million employed. Many people change jobs after the Lunar New Year, which falls on Feb. 8 this year, while some temporary jobs came to an end during the same period, the agency said.

The unemployment rate among the young (aged between 15 and 24) was 11.89 percent, compared with 4.16 percent for the 25-44 age range, and 2.2 percent for those aged between 45 and 64.

The agency also said the monthly average salary of employees in industrial and service sectors rose about 45 percent year on year in January to around 75,321 new Taiwan dollars (about 2,320 U.S. dollars), as many companies handed out year-end bonuses in January.

Athletic apparel makers cash in as domestic consumers become more active

After four years’ losses, Chinese leading sportswear Li Ning Co reported on Thursday that it had returned to profitability in 2015. A few weeks earlier, one of its competitors, the German sportswear manufacturer adidas AG, announced its financial results for its business in China in 2015. As sports become a larger part of people’s lives in China, both foreign and domestic sportswear manufacturers have been making out. However, they have different strategies to gain market share. Foreign companies such as adidas plan to further expand their presence across the country, especially in lower-tier cities, while domestic companies need to further strengthen their research and development capabilities.

Even though he had just bought a pair of Li Ning athletic shoes, a civil servant surnamed Peng recently decided to pick up a new pair of Nikes for his semiweekly badminton matches in Yichang, Central China’s Hubei Province.

“Nike has a better design. When I play badminton, I feel more comfortable wearing their lightweight running shoes,” the 48-year-old told the Global Times on Wednesday.

Peng has seen sports become a bigger part of people’s lives in Yichang. In his badminton club, a dozen players meet every Tuesday and Thursday to bat the shuttlecock around.

As more Chinese take up sports in their spare time, both domestic and foreign brands of athletic apparel have been gaining momentum in recent years, said Lin Jing, a senior manager at China Investment Consulting Co.

Leading domestic sports brand Li Ning Co announced on Thursday that the company returned to profitability in 2015 for their first time since 2011, according to its annual report.

The company’s revenue grew about 17 percent to 7.09 billion yuan ($1.10 billion) in 2015, when it reported 14 million yuan in profit attributable to equity shareholders.

Other sportswear makers including Germany’s adidas AG and its Chinese competitor Anta Sports Products Ltd also reported rising revenues and profits in 2015.

Adidas’s sales rose 18 percent on a currency-neutral basis on the Chinese mainland, Taiwan, Hong Kong and Macao, according to the financial report Adidas released on March 3.

Adidas said it is confident that its new “Creating the New 2020 Greater China” strategy will allow it to “outpace the competition” and remain the best sportswear brand in the market, Colin Currie, managing director with adidas Group Greater China, said at a press conference on March 4 in Shanghai.

“Adidas and its major rival Nike Inc each reported double-digit growth in China, with both sportswear makers accounting for about 12 percent of the market in China as of September 2015,” Lin said on Thursday. “Competition between the brands is likely to further heat up in 2016.”

The stakes are rising as more people in China take up regular sports and exercise. That number is projected to hit 500 million people by 2025, creating a market worth an estimated 5 trillion yuan, Lin noted.

Targeting lower tiers

Liao Xuchun is a loyal buyer of Anta basketball shoes, as well as those produced by another Chinese sportswear maker Peak Sport.

“Patriotism aside, the domestic companies make basketball shoes that are less expensive than those produced by Nike and adidas, even though the latter two have the endorsements of NBA stars,” said Liao, who lives in Jianshi county in the Enshi Tujia and Miao Autonomous Prefecture in Hubei Province.

Liao said it is also easier to find domestic sportswear brands in his neighborhood, especially after some of the foreign sportswear stores closed in recent years.

“If I want to buy Nike or adidas shoes, I have to go to the downtown shopping malls,” he told the Global Times on Wednesday.

Some foreign brands, such as adidas, believe that small and mid-sized cities will remain an important part in their corporate strategies.

Under adidas’s 2020 strategy, “60 percent of our growth will come from lower-tier cities,” Currie told the Global Times on March 4.

The company says more people in China’s lower-tier cities will enter the middle class as their cities urbanize, Currie said. And as their incomes grow, they will be more willing to trade up to buy the adidas brand.

When contacted by the Global Times on Friday, Nike, adidas’s biggest competitor in China, refused to comment about foreign sportswear companies’ marketing plans for China’s lower-tier cities.

On Tuesday, Nike is scheduled to release its financial results for its most recent fiscal quarter.

Although Nike and adidas have immense international profiles, Chinese companies have taken sizable portions of the domestic sportswear market.

According to a survey by FT Confidential Research, Anta was China’s third most popular sportswear maker and scored particularly well among lower-income households, the Financial Times reported in February. The Fujian-based company caters to an estimated 520 million people living in China’s smaller cities.

Different segments

Considering the prices of their products, foreign sportswear brands such as Nike and adidas will continue to target middle and high-end customers in larger cities, said Zhang Qing, CEO of Beijing Key-Solution Sports Consulting Co.

It is “unlikely” that they will lower their prices when they enter lower-tier cities, Zhang noted.

“One possible solution is that they could further strengthen their positions in promoting athletic lifestyles, especially in lower-tier cities,” Zhang told the Global Times on Wednesday.

Also, big foreign sports brands need to work more closely with their franchise owners to come up with more specialized strategies for China’s second- or third-tier cities, Zhang said.

Adidas plans to have about 12,000 stores in China by 2020, Currie said. The company will take into account the preferences of customers in small and medium-sized cities.

When competing for a larger market share in China, domestic brands, which started from lower-tier cities, should focus more on branding, which is not the same thing as signing partnerships with star athletes, Lin noted.

“They should invest more in R&D (research and development) to become a more innovative sportswear manufacturer,” Lin said.

ZTE in talks with U.S. govt over trade curbs

Beijing calls on Washington to handle the issue ‘with discretion’ to avoid harming growth of ties

ZTE Corp is in talks with the United States government over the telecom equipment manufacturer’s alleged violations of a U.S. trade restriction.

Opinions are split on whether the negotiations could help resolve the dispute, which, if it remains unresolved, could have a negative impact throughout China’s IT industry.

Minister of Commerce Gao Hucheng on Tuesday said China is “greatly dissatisfied” with the U.S. decision to ban the Shenzhen, Guangdong-based company from buying parts from U.S. suppliers.

“I hope the U.S. could handle the issue with discretion to avoid harming the stable, healthy development of Sino-U.S. trade ties,” said Gao. He added ZTE has sent a delegation to Washington to discuss the issue with the U.S. authorities.

The U.S. Commerce Department confirmed to The Wall Street Journal that negotiations are under way.

“These discussions have been constructive, and we will continue to seek a resolution,” said the U.S. newspaper, citing an unnamed senior official at the department. ZTE did not elaborate on the details of the talks, saying no final decision has been made.

The U.S. Commerce Department last week banned ZTE’s suppliers in the U.S. from selling components to the Chinese company amid claims that ZTE exported prohibited products to Iran.

The U.S. suppliers, including mobile chip giant Qualcomm Inc, will need to apply for permits from the U.S. government before selling products to ZTE.

ZTE said in a statement its operations were in compliance with the laws and regulations in every local market. The company pledged to cooperate with the investigation.

Hu Lu, an analyst at Changjiang Securities Co Ltd, said the punishment was related to a multi-million-dollar hardware and software export deal ZTE signed with Telecommunication Company of Iran in 2012. The U.S. forbids a long list of U.S.-made IT products from being sold to Iran.

“It was not the first time for the U.S. to investigate Chinese IT companies. Due to strong government interference, ZTE and Huawei Technologies Co Ltd are finding it difficult to penetrate the U.S. market,” Hu said. “But considering that talks are taking place, and the obvious negative influence on the trade relationship with China, the U.S. government is likely to ease the punishment.”

The export ban on the second-largest Chinese telecom equipment maker quickly unfolded into a diplomatic issue, with Foreign Minister Wang Yi saying the punishment “only hurts others and does not benefit oneself”. U.S. component makers rely heavily on Chinese enterprises such as ZTE, Huawei and Lenovo Group Ltd for sales.

But Nicole Peng, research director at research firm Canalys China, said the U.S. may not back off on the case.

“The U.S. Commerce Department will not easily lift the ban on ZTE in order to set an example for other companies,” she said. “The uncertainty of the outcome is the factor that will do the most damage to ZTE’s business.”

Zhu Jinsong, an analyst at Shanghai-based Haitong Securities Co Ltd, said the export restrictions on ZTE will deeply affect the Chinese IT industry.

“The matter is out of ZTE’s control. The restriction reflects a battle between the Chinese and U.S. high-tech industries. Although U.S. suppliers could ask for permission to sell products to ZTE, the U.S. authorities will definitely deny such a request,” according to Zhu.

Traded in Shenzhen and Hong Kong, ZTE stocks remained suspended as of Wednesday.