Archives June 2009

Beijing seeks to attract talented overseas Chinese

Beijing is working to entice some of the talented Chinese people working overseas to return home.

The municipal government has established a program to assist overseas Chinese who are under 55 years of age, have obtained a PhD overseas, and can work in Beijing for more than six months a year.

Professors in famous overseas universities and research institutions and those who are employed as senior managers in well-known multi-national companies are the key targets of the program.

Beijing’s goal for 2009 is to attract between 30 and 50 of these types of people back from overseas.

University graduates earn less money

University graduates who left school in 2008 are earning less money than their classmates did one year ago. That’s according to a newly released Employment Report on China’s university graduates. As CCTV reporter finds out, salaries for graduates from major universities fell at a steeper rate than graduates of vocational schools.

The report shows that graduates from major universities earn on average about 2,500 yuan a month. That’s down 14 percent from the previous year. Meanwhile, monthly salaries for graduates of non-major universities fell to about 2000 yuan, on average. That down 11 percent. And the monthly salary on average for vocational school graduates is 1,600 yuan. That’s down only 5 percent.

Wang Boqing, professor of Southwestern Univ. of Finance & Economics, says, “when the economy is good, enterprises are willing to hire graduates from good universities. But when the economy is bad, they are more willing to hire students from ordinary schools to save costs.”

The report also says for graduates with bachelor degrees, engineering and business management majors have the highest employment prospects. But graduates with majors in law and philosophy have the lowest employment rate. As for vocational schools, students focusing on resource exploration and mapping have the easiest time finding jobs. But students studying tourism and cultural administration find the most difficulty in securing jobs.

The employment report also shows that more students in Yunnan, Jinli, Ningxia, Shanxi and Xijiang are willing to start their own business. But students in Shanghai, Hainan, Jiangsu, Fujian and Beijing are less willing to become entrepreneurs. This suggests that finding a good job is still the top choice for most university graduates. They seem to choose to start their own businesses, only if they can NOT, first, find a job.

China faces challenge as graduates seek jobs

This is a key period for college graduates looking for jobs. China is facing a great challenge to ensure millions of graduates nationwide find employment amid the economic slowdown.

In the northeastern province of Jilin, a series of job fairs are helping to address the issue. 17-thousand jobs are on offer at this job fair alone, which is free to both recruiters and job seekers.

So far nearly 50-thousand college graduates have secured jobs in Jilin Province, but that is only one third of the province’s total number of grads.

Shanghai, Tianjin and Guangdong Province, where many major universities are clustered, are encouraging graduate students to seek work in smaller cities where competition for jobs is not so severe.

Shenzhen employment market warms up

The employment market in south China’s major manufacturing hub of Shenzhen is heating up. According to the Shenzhen employment authority, the city requires 20-thousand more workers.

Workers are needed in sectors like printing, civil engineering, office maintenance, real estate and education.

Officials say the current labor shortage is due to both rising productivity of manufacturers and a massive return home of migrant workers in the last few months of 2008. But the employment situation has yet to return to its ideal past.

Before the global financial chaos there were 1.27 jobs available for every worker. Now that number has been reduced to only 1.04.

Strategies for Success in China Life Sciences

Daniel Marshak, PhD, Chief Scientific Officer and President, Greater China, PerkinElmer, Inc.
Drug Discovery & Development – June 09, 2009

China continues to emerge as a life sciences market with significant opportunity, despite the global economic downturn. For example, although pharmaceutical giant Novartis is decreasing its US investment, it is increasing its investment in China. Many other biopharmaceutical companies are following suit, and the life sciences tools community is close behind.

As China emerges as a primary market for advanced laboratory and research technologies in instruments, consumables, and services, several responsible factors in particular stand out. Above all, there is a growing realization within the industry that science in China, both in pharmaceuticals and in basic research, is quite sophisticated and has been for some time. This has resulted in Chinese demand for the same level of technology and support services as is present in the US and Europe, and will no doubt continue to grow as China emerges as a life sciences power in the coming years.

To meet this demand, tool providers have increased their investment in delivering advanced lab technologies and services despite the economic uncertainty. Companies that take the short-term view and downsize their Chinese operations are taking a serious risk. Only those who make the investments needed to initiate and maintain strong commitments to their customers, and to back them with highly trained and motivated staff, have a chance of winning.

One straightforward strategy for succeeding in this market is often the most undervalued or overlooked: increasing service capabilities, implementing resources and processes for lowering service response time, minimizing customer downtime, and maximizing first-time repair metrics. Research organizations in China are highly productivity-minded, and they will reward top-tier, highly responsive service following their investment. This is particularly true for laboratory automation workstations and detection systems for screening their growing compound libraries.

To ensure all this requires a strong local presence of experts, which means maintaining jobs, salaries, benefits, and bonuses, all investments worth making in the Chinese workforce. Initial installations will grow as our clients’ capabilities increase alongside China’s presence in the global market. Further investments must be made in language localization in every possible facet of a China operation. Stocking service parts and consumables locally, in addition to local expertise, are fundamental requirements for successful customer relationships in the region. Excellent local language at all levels of customer contact is an absolute necessity, going beyond the basics of user manuals into high-level, detailed scientific applications notes and even advanced software. For example, PerkinElmer has recently expanded its application labs in China, and also created a dedicated global development center for information technology that serves the region, as well as installed new software development initiatives based in China. To excel in these areas is a basic requirement of doing business in China today.

A guiding principle for life science tool makers in China is to ensure that their product portfolio matches the particular technology demands of local customers. For example, both local and global pharmaceutical companies in China place a high degree of emphasis on high-throughput screening (HTS) and high-content screening (HCS) in their research operations, as well as on biochemical assays that complement cellular assays and cellular image-based assays. In fact, most global pharmaceutical companies are moving much of their labor-intensive screening activities, and some assay-based development, to China. However, the latter trend of shifting labor-intensive research activities to Asia should not overshadow the increasing demand for sophisticated lab solutions for cutting-edge research. The ability to provide complete instrument, reagent consumables, software, services, and training capabilities to customers will be a key differentiator in the China market for years to come.

A key pitfall for vendors in the region is a lack of preparedness for advanced customer interactions in the introduction of new technologies. The importance of providing significant customer training opportunities, particularly in the use of cutting-edge techniques possible through their tools with regard to their specific applications, cannot be overstated. Furthermore, it is critical not only to invest in supporting current product portfolios, but also to keep customers in China abreast of new science being performed globally, as well as emerging technologies in the pipeline in the near future. Successful partners will not hesitate to dedicate their best staff and commit significant resources to maintaining a high degree of customer interactions, featuring frequent visits to various research and development and manufacturing sites in the region, continual technology demonstrations, and in-depth training and symposia, all of which are essential to keeping customers informed of the potential of their product investment in advancing their research and business goals.

Another important avenue for success in China is to have strong working relations with the central government as a partner, in both human health and environmental health. Government priorities in life sciences research, especially in testing technologies for food, water, air, and consumer products, have guided many regional advances in health and safety, and will continue to do so in the foreseeable future. The common goal of the central government and the life sciences industry is unltimately to provide a healthier life to people and the environment in China.

Trends in the Chinese life sciences’ market clearly indicate not only growing innovation with global applicability, but also an increase in the scale and the depth of demand for new technologies and applications. Tool companies must acknowledge China’s sophistication and locally-originated–as well as globally-imported–advanced research requirements. Those who seek to serve these needs accordingly, and above all, make the necessary investments to do so, will meet with success. This demand can only be met by global players who make the necessary commitments to localization, in the form of smart investments in people and resources.

Biotech company Commonwealth Biotechnologies (CBI) expands in China

Chesterfield-based Commonwealth Biotechnologies (CBI) is planning to expand its presence in China by acquiring all outstanding shares of GL Biochem in Shanghai.

The companies have reached a purchase agreement for an undetermined price.
CBI itself does not develop drugs, but it out-sources research and laboratory support for companies that do.

According to CBI’s due diligence report, the Chinese biotech company had revenue of $13 million and an after-tax profit of $2 million in 2008.
The deal is pending regulatory and shareholder approval. CBI is publicly traded on NASDAQ and closed today at $0.56 a share, up 44 percent on the day.

“When you are merging a non-U.S. company into a U.S. NASDAQ-listed company, there are some challenges to reconcile,” said Richard Freer, co-founder and chief operating officer of CBI.

Freer said the company hopes to close on the deal within 90 days.

GL Biochem is a market leader for an area of biopharmaceuticals known as custom peptide synthesis, Freer said.

“We then become, by extension, a major player in the peptide pharmaceutical discovery business,” he said.

The product is primarily used in the development of vaccines.

This is not CBI’s first foray into China. Last year, the company entered a $1 million deal with Beijing-based Venturepharm Laboratories. Under that agreement, CBI sold 463,426 shares at $2.15 a piece in exchange for $500,000 cash and $500,000 worth of Venturepharm stock.

Freer said China is not only a good location for low-cost research centers, but also – with a population of 1.3 billion – a future growth market for vaccines.

China recruits college graduates for social jobs

China has launched its first social worker recruiting event for college graduates. Beijing is offering 2000 social worker posts for fresh college graduates this year.

Over 16,000 students are taking the qualification exam on Saturday. Around one third of the candidates have PhD and Masters degrees. The students will be competing for various positions, including jobs in community resident committees and community health care stations. It’s expected that the city will expand the program within the next 2 years.

China Mobile to invest 31b yuan in Shanghai

China Mobile Communications Corporation (China Mobile), the country’s biggest mobile operator, plans to invest 31 billion yuan ($4.54 billion) in Shanghai in the coming three years according to an agreement signed between the two on Monday.

The plan was revealed in a frame agreement signed by China Mobile and the Shanghai government, which aims for further cooperation in the information industry in Shanghai between 2009 and 2011.

China Mobile will help Shanghai become an international financial center by opening 100,000 wireless POS/ATM machines, offering fixed-mobile information service for 800 financial institutions and mobilizing 8 million subscribers of its customized mobile banking services in the three years.

The company plans to allocate 3 billion yuan for constructing Shanghai’s TD network with a signal that will cover urban area and major rural areas this year. It plans to spend 1 billion yuan for the information service for the Shanghai 2010 World Expo.

It also pledges 600 internships and 3,000 jobs for Shanghai university graduates and residents.

China Mobile registered a 29.6-percent increase in net profit to 112.79 billion yuan last year.

Shanghai Surprise

There has been buzz lately in Asia that Hong Kong may become a has-been. As the global financial crisis gathered speed last year, Hong Kong looked relatively well insulated from the crashing markets because its banks were not heavily exposed to credit default swaps and all those other funky instruments. But the buzz is about changing politics, not markets. In April, Chinese officials announced firmly that they would like to see Shanghai become a global financial center by 2020; in the same month, Premier Wen Jiabao warned that Hong Kong must raise its game or face decline. The news was chilling for many in Hong Kong, which serves as a gateway to China for investors and is almost entirely dependent on financial services. Some 60 percent of the market capitalization of the Hong Kong Stock Exchange and more than 70 percent of its daily trading is in shares of Chinese mainland firms. Many of these are large state-run enterprises—the sort that leaders in Beijing could very easily order to trade in Shanghai instead.

Beijing pushed for Shanghai to play a bigger role as a financial center back in the early 1990s. But it didn’t take off then because Chinese financial capitalism was still relatively immature. Now the mainland markets in Shanghai as well as Shenzhen are more developed, major Shanghai banks having learned a lot from the experience of Hong Kong.

Shares in state-owned firms can be more freely traded, and the government is looking to create new kinds of securities. In the coming years, Beijing is expected to allow the yuan to trade more freely, which could give it a major role in international currency trading. But to allow markets to mature without completely losing control over them, Beijing needs traders that are competent, but also compliant—the sort it can reach and influence more easily in Shanghai than in Hong Kong, where market rules are still based on foreign law.

Chinese officials are also beefing up banking in Beijing, but given Shanghai’s historic position as a trading center and its broader reach in finance, it will likely remain the country’s key city of commerce. What’s more, the fact that the Shanghai faction in government lost power a few years back when a number of politicians were taken down for corruption means that Beijing can now better police and direct the city’s future development.

Finally, like most financial centers at the moment, Hong Kong is in a drastically weakened state. Amid the global crash, Hong Kong’s economy contracted by 7.8 percent in the first quarter of 2009, even as China’s GDP as a whole continued to grow. Now that the entire world is tipping toward Beijing’s model of state regulation, China may feel emboldened to sideline this eastern redoubt of British free-market capitalism.

So Hong Kong is searching for a new role once again. The city has adapted before—it went from selling plastic flowers 50 years ago to higher levels of manufacturing to being a global financial capital. It still has the advantage of a fully convertible currency, as well as rule of law, which remains unreliable on the mainland. And last week’s announcement that Charles Li, a JPMorgan banker with strong ties to the mainland, would take charge of the exchange in January was a sign that Hong Kong is trying hard to bolster its position. But with at least some of its old business likely to move to Shanghai and Beijing, the city needs to move beyond trading, and leaders know it. Speaking to the American Chamber of Commerce in Hong Kong recently, the city’s current stock-exchange chief, Paul Chow, acknowledged the challenge. ÒLook back over the past five years, and compare the state of [the] mainland China market in 2003 to the current state. Substantial improvements. And what will happen in the next five years? Ten years?Ó

If Beijing has its way, the answer is clear. Yet there are still opportunities for Hong Kong to rebrand itself, perhaps as a provider of consulting services to Chinese businesses—helping less-sophisticated enterprises from the mainland figure out how to sell themselves to an international audience as they expand abroad, or as an education hub, churning out M.B.A.s to work in top Chinese and Asian businesses. Either way, it will need to deal with some of the governance problems and issues of vested interests that have plagued it in recent years. Critics say Asian tycoons are able to bend market regulations to suit their whims here, and the city has yet to deal properly with its recent minibond scandal, in which many individual investors lost their life savings after unwittingly buying Lehman Brothers’ bonds through intermediaries. One of the last remaining advantages Hong Kong holds is the perception that it’s still a fairer, better-governed financial capital than Shanghai. If it can’t hold on to that, it will surely become, as former Chinese premier Zhu Rongji predicted a few years back, Toronto to Shanghai’s New York.

China sees job growth

China announced Wednesday there was a recovery in its job market in the first four months of this year with 3.65 million urban residents finding new jobs.

Noting the improvement, announced by the Chinese Cabinet, Yang Weiguo at Renmin University of China told the China Daily the short-term measures instituted to counter the employment pressures have been adequate. He said China now must create jobs that meet the needs of development.

The measures taken by the government to boost employment include expanding domestic consumption, reducing enterprises’ tax burden, encouraging graduates and migrant workers to be self-employed and setting up vocational training.

Xinhua reported China’s urban jobless rate stood at 4.2 percent at the end of 2008 with 8.86 million on the unemployment rolls.

The government plans to allocate $6.13 billion this year for creating jobs, up 66.7 percent from last year, the State Council said while warning the country still faced a tough employment problem because of labor oversupply and economic structural issues.

The employment situation remains especially grave for college graduates, whose numbers are expected to swell to more than 6 million this year, even as 1 million graduates from last year are still trying to find jobs.