Microsoft to invest 100 mln USD in China over five years

U.S. computer giant Microsoft plans to invest 100 million U.S. dollars in China over the next five years, said Microsoft China chief executive Chen Yongzheng on Wednesday.

The investment plan was widely regarded as a reward for China’s anti-piracy efforts. The U.S. company has already invested 65 million dollars in three Chinese software enterprises this year.

China Business News reported sales of personal computers installed with authorized software systems rose from 25 percent in the last quarter of 2005 to 48 percent in the first quarter of this year in China.

This was partly due to Microsoft’s two-billion-dollar purchasing contract with Chinese PC producers Lenovo, Tsinghua Tongfang, Fangzheng and TCL early this year.

The banning of sales of PCs installed with non-authorized operating systems by China in April also played an important role in this regard.

Microsoft awarded Microsoft China the title of “best subsidiary company” this year, the report said.

Microsoft China has 1,000 staff engaged in research and development and the figure will rise to 3,000 in five years.

Source: Xinhua

Intel Capital invests $40 million in China’s Neusoft

BEIJING : Microchip giant Intel Corp said on September 26 that its investment arm, Intel Capital, had agreed to invest $40 million in China’s Neusoft Group Ltd.

The investment, which was still subject to regulatory approval, was the largest to date from Intel Capital’s $200 million China fund, which was established a year ago, said Intel in a statement.

Intel and Neusoft also signed an agreement to strengthen co-operation in software and hardware integration, education and training, said the statement.

Intel had said earlier that individual Intel Capital investments are typically under $5 million and represent less than a 20 percent equity stake. Intel Capital invested $265 million around the world in 2005, around 60 percent of which went outside the United States, up from 40 percent in 2004.

Fund raising by venture capitalists for China hit a record $4 billion in 2005, according to research company Zero2ipo.com.

Korn/Ferry Relocates Asia/Pacific Leadership From Singapore to Shanghai

– Move is in Response to Growing Demand for Skilled Professional Labor in Greater China Region (GCR) –

Korn/Ferry International , the premier provider of executive search and leadership development solutions, today announced that it is relocating the office of its Asia/Pacific leadership to Shanghai, effective March 1, 2005. Charles Tseng, President, Korn/Ferry Asia/Pacific, will move from Singapore to oversee the strategic development of the firm’s operations throughout the region, reflecting the growing importance of the Greater China Region (GCR) including Hong Kong to its business worldwide.

“As China becomes the focal point for many multi-national companies’ (MNC’s) long-term strategies, securing our footing here is one of the most important strategic ventures for Korn/Ferry’s long-term growth,” said Paul C. Reilly, Chairman and CEO of Korn/Ferry International. “Demand from our clients from around the globe has prompted this move. Shanghai alone is already home to more than 65 regional headquarters for established MNC’s, with more arriving every day. ”

Korn/Ferry first opened a representative office in Beijing in 1995, and then in Shanghai in 1997. In 2002, Korn/Ferry was the first major international search firm to be awarded a sino-foreign joint venture by the Beijing Personnel Bureau, followed by a similar venture in Shanghai in 2003.

“The much-used phrase ‘war for talent’ clearly applies to the China market — not only in terms of Chinese and international companies looking to hire CEOs, but also in terms of mid-level managers and other ‘knowledge workers,'” said Mr. Tseng. “Many of our clients are struggling to attract and retain enough local talent to fuel their plans for the market, and demand for our services is booming as a result. I am extremely pleased to make this move, which will enable us to capitalize on the tremendous opportunities presented in China and around the region.”

Korn/Ferry in China: Milestones

* 1978: Opens office in Hong Kong
* 1995: Opens Representative Office in Beijing
* 1997: Opens Representative Office in Shanghai
* 1999 and 2002: Voted “Best Recruitment Firm” by “China Staff”
* 2002: Awarded sino-foreign search joint venture by Beijing Personnel
Bureau
* 2003: Awarded sino-foreign search joint venture by Shanghai Personnel
Bureau
* 2004: Introduces Futurestep service in Shanghai

About Korn/Ferry International

Korn/Ferry International, with more than 70 offices in 35 countries, is the premier provider of executive search and leadership development solutions. Based in Los Angeles, the firm partners with clients worldwide to deliver unparalleled senior-level search, management assessment, coaching and development and middle management recruitment services through its Futurestep subsidiary. For more information, visit the Korn/Ferry International Web site at http://www.kornferry.com/ or the Futurestep Web site at http://www.futurestep.com/.

Website: http://www.kornferry.com/
Website: http://www.futurestep.com/

China Lures Foreign Retailers With Rule Changes

SHANGHAI, China — Toys “R” Us Inc., Best Buy Co. and Home Depot Inc. are part of a new wave of foreign retailers about to enter China’s quickly developing consumer market.

Over the past year, Chinese authorities have approved more than 1,000 applications by foreign retailers and wholesalers asking to open wholly owned businesses in the booming country of 1.3 billion people. That number of approvals, a sharp surge from previous years, follows a long-awaited liberalization of China’s retail sector in 2005. In line with pledges made when joining the World Trade Organization, Beijing stopped requiring foreign retailers to form joint ventures with local partners.

According to the Shanghai Foreign Investment Commission, the bulk of the new applications are from companies that have a China presence through local partnerships. But some prominent U.S. retailers will be new players in China’s rapidly changing — and increasingly competitive — retail landscape. Closely held Toys “R” Us, for example, will be opening its first mainland China store, a 27,000-square-foot outlet in Shanghai’s Superbrand Mall, in December.

“It’s the start of our entry strategy to grow the market in China,” said Pieter Schats, the company’s Asia chief executive. Toys “R” Us executives said the company will formally announce details of its entry in coming weeks.

Toy “R” Us and others are coming in at a time when Chinese authorities are weighing whether to restrict large-scale expansion of chain-store outlets, which could affect major chains like Wal-Mart Stores Inc. that entered China more than a decade ago.

But because they are just entering the Chinese market, the new retailers aren’t likely to be subject to any possible rule changes. And few plan to go into China’s interior cities, where giants Wal-Mart and Carrefour SA are venturing.

Retail analysts say the newcomers’ entry is likely to improve China’s still-evolving mall industry, where high-end brands are lumped with unknown names and facilities and parking are frequently substandard. For example, Beijing’s Golden Resources Mall — which is larger than the Mall of America in Minnesota — has pools of dirty water on bathroom floors even though it boasts shops selling $15,000 Italian leather sofas.

Although China has some of the world’s largest malls, only about 10% of them are profitable, estimates Morgan Parker, president of shopping-center developer Taubman Asia.

Previously, foreign retailers would leave it to their local Chinese partners to handle real-estate decisions, which often hinged on price, he said. Foreign retailers “tend to be more holistic — they want to know things like tenant mix and facilities, to protect their brand image,” he said.

The 2005 rule change has prompted an influx of foreign retailers. About 80 to 90 foreign retailers applied to open operations in China in the first 20 years after China opened up its economy, according to Simon F. Huang, deputy director at the Shanghai Foreign Economic Relations & Trade Commission. But in 2005, 432 new retail applications were approved by the Ministry of Commerce.

This year, local governments were given the autonomy to approve retail projects, which accelerated the process. Shanghai, China’s major retail hub, approved 496 projects in the past six months alone.

The newly entering retailers say they plan to go slowly, opening outlets only in major cities such as Shanghai or Beijing.

Bob Willett, chief executive of Best Buy International, told reporters in Shanghai this past week, “We’re only going to open when it’s right. This is not a race.” The company will be opening its first outlet in Shanghai by December.

China to see more mergers and acquisitions in retail sector

More mergers and acquisitions are expected in China’s retail sector in the near future, according to Ernst & Young. Ernst & Young, one of the world’s top consultancies, said China’s retail sector is expected to grow 12 to 13 percent in 2006 to reach sales of 7.6 trillion yuan (950 billion U.S. dollars) as consumption hots up.

China saw a total of 417.6 billion yuan (52.2 billion U.S. dollars) of M&A (mergers and acquisitions) activity in 2005, but only 3 percent or 11.1 billion yuan in the retail industry, said the report Retail Revolution–A Look at Mergers and Acquisitions in China’s Retail Industry published here on Wednesday.

The report said mergers and consolidation within the industry will reduce fierce head-to-head price competition among retailers. China’s top 100 retail companies currently only have 10 percent of the retail market. The vast majority of retailers in China are small family-operated businesses, fragmented and often inefficient, that keep costs low by using family labor.

Mergers and acquisitions would lead to a more rational and consolidated landscape and allow the bigger, better-organized groups to increase market share. In developed countries such as the United States, 85 percent of retail activities are highly organized, but the equivalent figure for China is only 20 percent.

According to the report, domestic players Bailian and Gome and foreign retailers Wal-Mart and Carrefour will emerge as market movers and shakers over the next five years, upping their market share. However, other voices suggest that foreign mergers and acquisitions may threaten domestic firms, and even pose threats to national security. Concerns range from the dilution or demise of Chinese brands, reduced incentives for innovation among local retailers and domination by multinationals.

Carrefour hopes to acquire at least 10 local retailers as part of its expansion plan in China, but no specific targets or time frames have been given. Best Buy, the largest consumer electronics chain store in the United States, acquired a 75 percent stake in China’s fourth largest home appliance retailer, Jiangsu Five Star Appliance, in May earlier this year and is reportedly seeking to conclude an 800-million-yuan acquisition of Sanlian Commerce, a retailer in East China’s Jiangsu Province.

The report said mergers and acquisitions enable retailers to reinforce their presence in markets where they do not currently operate or do not have significant market share.

China honors foreign experts with Friendship Awards

Forty nine foreign experts from 19 countries were honored with Friendship Awards Friday in Beijing by the Chinese government for their outstanding contributions to the country.

Vice Premier Hui Liangyu expressed his welcome to all the foreign experts and international friends working in China.

“It’s a process of give and take. Talent exchanges benefit all countries involved,” said Jan Wolter Post, who was honored for his contribution to China’s automobile industry by introducing advanced technology and research on green-fuel automobiles.

China was confident in opening increasingly to the world and invite more foreign experts to work in various domestic sectors, Post said.

The Friendship Award, which was set up in 1991, is the highest award the government confers on foreign experts who have made outstanding contributions to China’s economic and social progress.

“Your professional qualities and dedication have deeply impressed the Chinese people, and your profound friendship with the Chinese people and your valuable contributions to China’s modernization will be eternally remembered by the Chinese government and the Chinese people,” Hui said.

He said the government would continue to push forward the strategy of reinvigorating China through developing skills and lay equal emphasis on the training and development of domestic talent and introducing international expertise.

A total of 850 foreign experts from 55 countries had been conferred the award by last year.

“My husband got the award in 2003 for his efforts in environment protection,” German NGO expert Dorath Lehrach said.

“At that time I thought maybe someday I could be honored this award, and today it comes true,” said Lehrach, who assists Chinese NGO development.

According to the State Administration of Foreign Experts Affairs, China introduced 340,000 foreign experts and professionals in 2005, but the country urgently needs senior foreign professionals with innovative, decision-making and management skills.

“We sincerely hope for and welcome the arrival of more foreign experts, overseas Chinese experts and international friends to participate in China’s modernization in every way in the future,” Hui said.

After the ceremony, Hui, on behalf of Premier Wen Jiabao, invited the experts and their families to attend a grand reception to mark the 57th anniversary of the founding of the People’s Republic of China, which falls on Saturday.

Source: Xinhua

An Intel Leader Discusses His Lessons in the China Game

Ian Yang, the Beijing-based co-general manager for Asia Pacific for Intel Corp., spends most of his time steering one of the world’s biggest tech companies through one of its most exciting — and complicated — markets.

When Intel first came to China 21 years ago, the country was a tiny market for the microprocessors and other computer chips Intel makes. But that certainly has changed. While Intel doesn’t break down its revenue by country, Asia outside Japan now accounts for half of its total sales. A big part of that is China, the world’s second-biggest market for personal computers after the U.S., and the place where most of the laptop PCs sold elsewhere in the world are made.

Mr. Yang, 41 years old, joined Intel in 1986 when he was studying in the U.S. at what is now called Kettering University in Flint, Michigan, as one of its first mainland Chinese employees. He returned to China in the mid-1990s to head up a small sales and marketing team, which helped developing Intel’s relationship with a then little-known company called Legend. That company is now called Lenovo Group Ltd., and is the world’s third-biggest PC vendor by sales.

Mr. Yang was promoted to country manager in 2000 and rose to his current job helping to oversee sales and marketing throughout the region in July, 2005. He sat down with Wall Street Journal reporter Jason Dean in Beijing to talk about his experience as a global manager.

WSJ: What was your first job and what did you learn from it?

Mr. Yang: My first job was a co-op job [a training job that is part of a college program] at Intel. The first day I reported to work I saw this little sign behind reception that said “The customer is our No. 1 asset.” I thought, “Wow.” I just came from China and had no concept of this customer orientation. So I thought, well, if I keep doing all the right things for the customer at this company, then I’ll probably do OK.

WSJ: What advice would you give someone starting out today who wanted to get into your field?

Mr. Yang: These days, not a lot of students really have any sort of internship or co-op kind of work experience. It’d be great if the education system here could mirror some of the U.S. cooperative programs where college kids could gain some work experience.

WSJ: What’s your favorite business book?

Mr. Yang: There are a lot of generic management books. But about six months ago, a book caught my attention called “It’s Your Ship” [“It’s Your Ship: Management Techniques from the Best Damn Ship in the Navy,” by Michael Abrashoff]. It was written by the former commander of the USS Benfold, a high-tech destroyer in the U.S. Pacific Fleet.

In the Navy they always have this ceremony to send off the old guy and welcome the new guy. At the ceremony, the old guy was booed. [Abrashoff, who taking over,] was totally shocked at how happy the crew was to see the previous guy go. And he said there’s no way I want that to happen.

The big concept was that when he talked to everybody, he said “I’m committed as the commander of this ship to do my part to fix it. But as a sailor of this ship, you have as much obligation or responsibility as I do. It’s your ship, as well.”

WSJ: What is the one thing you wish all new hires knew?

Mr. Yang: I would say, for any new hire, the most important thing is assuming responsibility. That means you have to think out of the box sometimes, and you have to really initiate things rather than just receiving orders. You have to follow your own mind and do your own thinking.

WSJ: It seems like one of the challenges in your position is trying to marry this very distinct corporate culture rooted in America with a distinct business culture and educational culture in China.

Mr. Yang: You’re absolutely right. That is the challenge. In the U.S., people tend to think longer term and strategically. They are very open and fast on their feet. I think a lot of time their challenge is in executing in a disciplined way.

In my last 10 years here [in China], my observation is that there are a lot of very hard-working, devoted employees. But they don’t very openly share their ideas or thinking. It’s not like they don’t have it. But if they don’t share it, a lot of times people will have the perception that “these people are not strategic.”

But if you talk to them in their own language, a lot of times you’re surprised about how much they know about the industry, the market, the issues facing the company, and what the company should be doing.

WSJ: What was the most satisfying decision you’ve made as a manager?

Mr. Yang: [When I first came back], the local computer companies were so small. But some of my customers told me: Watch the consumer electronics market in China.

So I started influencing the management of Intel. I said we’ve got to put some longer-term strategy behind growing the local guys. I truly believed in it. I said even though these guys are small, if they take off, we can grow with them.

WSJ: Intel recently announced a major global restructuring. What is it important to tell employees at a time like this?

Mr. Yang: We’re going through a very turbulent time. I can just feel that people have a lot of questions on their minds. The last thing you want to do is not share anything with them and keep a closed door. Even without a lot of perfect answers, as a manager you have to try to help people understand why we’re going through this, calm them down, continue to focus on their jobs, don’t get panicked, and we’ll get through this as quickly as we can. But six months from now, once Intel has really sorted out its problems and once we get to a level where we are a lot more efficient again and people are a lot more clear on why we’re doing this — here’s our strategy, and you guys have every bit as much to do with it as I do — then you’ll look back and say I’m glad Intel did it.

China lures expatriates but success hard: study

China is one of the easiest places for recruiters to lure expatriate executives, but is also one of the hardest places for them to succeed, according to a study released on Tuesday.

A survey of more than 140 international recruiters by executive recruitment firm Korn/Ferry International found other popular places for expatriate workers were Western Europe, especially Britain, and North America, as well as Southeast Asia, especially Singapore.

The firm’s 10th quarterly executive recruiter index found that the most difficult places to attract expatriates to work included the non-Gulf Middle East, Africa, Central and Eastern Europe, and South America.

“High-growth emerging nations often offer the greatest opportunities for expatriates, but they can also come with the most challenges,” Chris van Someren, president of Korn/Ferry for Europe, Middle East and Africa, said in a statement.

Reasons that assignments failed included the lack of cultural fit, family or personal issues or a lack of direction from managers, the survey showed.

Things were toughest for expatriates in China, Japan and South Korea, the non-Gulf Middle East, and in Central and Eastern Europe, and South America, the poll found.

But 91 percent of the recruiters surveyed said executives with international experience were either extremely or somewhat desirable candidates.

“Expatriate assignments can be extremely beneficial for developing emerging leaders and for providing solutions for organizations undergoing significant growth or change – but expatriates are clearly not a substitute for local talent,” said van Someren.

Recruiters said expatriate programs helped promote better cultural understanding, facilitated the opening of a new branch or office, and were good as a professional development tool.

But expatriate assignments were least effective for addressing local talent shortages, generating new business abroad and improving staff retention.

The poll found the average ideal length for an expatriate posting was about two-and-a-half years.

Checking Out Candidates in China

By Frank Mulligan, Talent Software

If you are hiring staff in China you will at some point have come across people who exaggerate their experience and skills, or downright lie.

An exaggeration will cause you little difficulty because you will be aware that everyone tends to exaggerate a little. A lie on the other hand will cost you a huge amount of money if you do not catch it, and early.

Solutions that deal with these issues are available, both online and offline, but it has to be said that the online ones offer real value. The offline solutions are a little obvious, so you probably would have introduced them already if you could.

Hiring Issues
For the issue of past experience you can get an objective assessment by doing a Reference Check but our research indicates that companies in China only do this for about 10% of staff. The rationale for this seems to be that it is seen as a difficult process.

The biggest issue in China is fake degrees, which can be bought for about RMB400 on the streets. They are exact, perfect copies of original certificates but obviously they are easily identified if you have the original.

Luckily there is a website to check degrees from Chinese universities. All degrees after 2001 can be checked and the system shows you the final certificate with the person’s picture, number and so on.

Dealing with certifications is a little different. There are so many certifications authorities and training companies that you cannot devise a system to be able to deal with this easily. Instead we would recommend that you test the skill.

This could be on paper or online but again our experience shows that companies tend not to do the testing when it is on paper. The tests have to be scored, and often by someone with knowledge of that skill. Online tests score automatically and integrate easily with the online hiring system.

An excellent way of testing to see if someone has really done what they say they have done is Work Samples. All this involves is asking the candidate to produce a piece of work or solve a problem that is specific to the job he is being hired for. This must be done in your office and he has to have all the tools necessary for the solution.

What Could Happen
In case you still do not feel that any checking is really necessary the statistics below will give you more details of what you are letting yourself in for. The statistics are worldwide and cover all aspects of the hiring process.

– 9% of job applicants falsely claimed they had a college degree, listed false employers, or identified jobs that didn’t exist. *Source: Resume Inflation: Two Wrongs May Mean No Rights, by Barbara Kat Repa

– 34% of all application forms contain outright lies about experience, education, and ability to perform essential functions on the job. *Source: Wall Street Journal

– 11% of job applicants misrepresented why they left a former employer. *Source: Resume Inflation: Two Wrongs May Mean No Rights, by Barbara Kat Repa, Nolo .com, 8/801

– Nearly one-third of job applicants listed dates of employment that were inaccurate by more than three months. *Source: Resume Inflation: Two Wrongs May Mean No Rights, by Barbara Kat Repa

– As many as 30% of jobseekers exaggerate their accomplishments, and about 10% ’seriously misrepresent’ their background. *Source: The Complete Reference Checking Book, by Edward C. Adler

– 30% of all business failures are caused by employee theft. *Source: American Management Association and US Chamber of Commerce

– 14.7% of all applicants admit to theft of merchandise from an employer. *Source: Reid Psychological Systems (Don’t Hire a Crook, Dennis DeMay; James R. Flowers, Jr., 1999 Facts on Demand Press, pg. 88)

– 4.4% of all applicants admit to theft of cash from an employer. *Source: Reid Psychological Systems (Don’t Hire a Crook, Dennis DeMay; James R. Flowers, Jr., 1999 Facts on Demand Press, pg. 88)

– 33% of all applicants admit to being tempted to steal from an employer. *Source: Security Magazine, 3/97

– It costs $7,000 to replace a salaried employee, $10,000 to replace a mid-level employee, and $40,000 to replace a senior executive. *Source: Recruiting Times

– In 1999, employers lost 60% of negligent hiring/supervision jury trials. *Source: The Reish and Luftman Practical Guide to Employment Law

– On average, in U.S. businesses, at least half of all new hires don’t work out. *Source: Fortune, 2/00

If you really need professional help on this issue please check out Chinawhys.

China: Citigroup opens software and technology centre in Dalian

Citigroup has officially opened a new software and technology center in Dalian. The center will form part of Citicorp Software and Technology Services Limited (CSTS), a subsidiary of Citibank N.A.. A ceremony was held to mark the opening, attended by Lee Ah Boon, Country Business Manager for Citibank China, Stephen Bird, CEO of Credit Cards and Consumer Finance Japan, Aaron Ho, General Manager of CSTS, as well as senior Dalian government officials.

The CSTS Dalian center is positioned to support both Software Application Development and Maintenance and Business Process Outsourcing services to a wide range of Citigroup businesses in Asia and around the world. The new center is located in the Development Zone half an hour’s drive from the city, and will have an employment capacity of about 300 professionals.

“It is exciting to be expanding our presence to the vibrant city of Dalian, an important city in which we look forward to playing an active role as we continue to consolidate our presence in China,” said Mr. Lee Ah-Boon.

In the next three years the CSTS Dalian center is expected to expand to support different Citigroup business units throughout the region and globally, especially those requiring Japanese or Korean language capabilities. Aaron Ho, General Manager of CSTS, said, “We are very pleased to be opening this state-of-the-art center in Dalian. With its strong language capability, professional talent pool, and its support for foreign investment, Dalian represents a great fit with our business.”

Lin Hua, Deputy-Secretary General, said, “We are very pleased to have Citigroup opening a new center in our city and our Development Zone. We believe Citigroup’s presence here will provide a significant boost to our reputation as a technology sector and will help train and nurture local IT talent. We are committed to providing an excellent environment for CSTS Dalian center, and we wish it all the best of success.”

The establishment of the Dalian center reflects Citigroup’s continued efforts to contribute to the development of Chinese IT industry. In April 2004 the Citigroup Financial IT Education Program was established, designed to increase local financial IT talent and support the development of China’s finance sector. The program benefits students from 20 major universities in China, including Dalian University of Foreign Languages and Dalian University of Technology. CSTS also provides internship opportunities for participating students and offers them outstanding career and growth opportunities.

CSTS was established in 2002 to provide software development and related technical services with the goal to participate in and support the development of China’s information technology industry. Headquartered in Shanghai, CSTS has branches in Guangzhou and Zhuhai in addition to Dalian. CSTS currently has more than 1600 employees in all three branches, about 75% of whom are software developers.
Re-disseminated by The Asian Banker