Archives 2009

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.

China’s Growing Talent for Innovation

As a business innovator, China has a wealth of advantages. These include a huge, adaptable population with an affinity for improvisation and reverse engineering; low-cost labor, operations and overhead; and mature industrial clusters ready to supply a variety of parts, components and subassemblies. These elements are creating a strong culture of innovation, one that companies from developed economies soon will either profit from, or compete against, as China moves beyond labor-intensive, low-value-added consumer goods.

Already, many large multinational corporations (MNCs) have set up R&D centers in China, and the government is encouraging the development of design capabilities among its workforce. But China is not an easy place for outsiders to be innovators. Companies from developed economies looking for R&D partners in China must learn to operate within an industrial structure quite different from their own, and take great care in selecting whom to work with and how, experts caution.

MNCs are likely to find that the best opportunities for harnessing Chinese-style innovation lie in two areas: discrete, targeted pieces of larger products and products for home-market consumption.

In this article, part of a special report on Chinese manufacturing, experts from The Boston Consulting Group (BCG) and Wharton look at how companies can profit from Chinese innovation, what drives this innovation, and what challenges they face in sourcing R&D in China.

Global Recession’s Role

Jim Andrew, a senior partner and managing director in BCG’s Chicago office and head of its global innovation practice, says that in the current recession, companies need to ensure that they are getting full benefit from every dollar they spend — including their investments in innovation. Andrew sees growing innovation in low-cost countries such as China and India as one way for companies to increase the cost-effectiveness of their innovation spending. “The crisis in the developed markets has accelerated the move to developing markets because they are lower-cost and now have a track record,” he says, noting that the changes afoot are redefining the innovation landscape. “We will look back on this time and say it was an inflection point with regard to the speed at which certain innovation activities were scaled up in China and India in particular. There is really a step-function change in the rate at which some of these activities are growing.”

Innovation in China before its economy opened up was limited to design institutes that were part of government departments, says David Michael, a senior partner and director of BCG’s Beijing office. Some of institutes have since been repurposed for new commercial goals. Such is the case with the state-owned oil company PetroChina, which has a large network of design institutes within it, according to Michael.

MNCs now realize that China has tremendous development capabilities, including the ability to size up opportunities and rapidly bring products to shelves at low cost. The availability of well-educated talent is particularly attractive, Andrew says. “You can access that talent to do a lot more of the ‘R’ (research) that is increasingly relevant not just to China’s domestic markets but to developed markets.” For MNCs that set up R&D centers in China, “It is more about accessing talent rather than some unique source of innovation,” Michael notes. That makes innovation in China substantially different from that in other global hubs such as the Silicon Valley. “There is low-cost engineering talent in China, but that’s different from saying that there is a whole fountain of innovation we can tap into,” he adds.

This raw engineering talent is a valuable resource for companies from developed economies. The best way for MNCs to tap into Chinese design skills is by sourcing select pieces of their product, Michael says. As is true for contract manufacturing, much of the advantage of Chinese R&D is in low-cost labor — but for brains, not brawn. “When Western or world-class business practices line up with low Chinese costs, new types of companies develop to take advantage of this opportunity,” he notes.

In health sciences, for instance, some Chinese companies are already responding to Western research needs with low-cost services. Michael offers WuXi PharmaTech in Shanghai’s Waigaoqiao Free Trade Zone as an example. WuXi, a leading provider of contract research work for the global pharmaceutical industry, has become adept at setting its engineers to work on Western pharma projects. “It’s run by people who understand the needs of Western pharmaceutical companies and know how to leverage local engineering talent to do the work.”

This kind of division of labor is common in such East-West partnerships. Western companies typically tap into Chinese design for parts or modules, Michael says. One global energy company gets “a lot of its design for oil exploration and drilling facilities in China at the local oil companies’ design institutes,” he notes. Microsoft and other Western and Korean gaming and software development companies have a network of local software developers. Michael also points to Perfect World, a Chinese gaming software writer that “is booming in the 3-D world.” It may not be a household name in the United States or Europe yet, but Perfect World is a leader in the country’s online game market, according to Morgan Stanley Research.

Development Attitude and Disruption

Such industry specialization is common. Corporate R&D in China tends to focus on specific industries and on product development rather than basic research, says Marshall Meyer, a Wharton management professor whose research focuses on China. “You see successes in China in machine tools and lasers, but it has been a combination of development and marketing more than basic research.”

Chinese companies have been good at the “D” (development) part, Andrew says. “You could grow very large very quickly by playing in existing markets if you developed new products that were just a little better than everybody else’s. But with increased competition everywhere, it takes products and services that are more innovative and targeted to needs that are not already being met.” One recent example is a soybean blender that produces a popular soy milk drink. Joyoung Co. in Jinan, China’s Shandong province, manufactures the blender, which has become “a big hit product.” The blender has no fancy technology — just a plastic body with an electric motor, but its “fundamental concept is what local consumers want,” he says.

More dramatically, according to Michael, Taiwanese computer manufacturer Asus used its development capabilities to “single-handedly invent the netbook segment of the PC market.” Producing computers stripped down in functionality and priced at $300 each, Asus “has completely disrupted the global PC market.”

As existing markets become saturated, however, China must invest more in the “R” part of R&D to compete differently or to expand into fundamentally new markets, Andrew says. And while piracy has eroded profit opportunities in China’s traditional gaming software industry, Michael points out that it has not similarly affected online games. “People are paying for the experience of playing games with each other, and that turns out to be profitable despite some piracy.”

Longer-term, the capacity to innovate seems likely to grow. “The culture is very, very good at devising quick and often effective solutions to problems,” Meyer explains. “I see a lot of improvisation.” An increasing demand for a Chinese language card in computers, for example, prompted Lenovo years ago to create one for its products. Chinese white-goods manufacturer Haier found that potato farmers in China were using their washing machines to clean produce, so it designed a heavy-duty, special-purpose machine that can be used outdoors and will “wash your clothes or your potatoes,” Meyer notes. Electronic and electrical manufacturers often design products that work with “very heavy-duty power supplies because of the poor quality of electricity” in the country.

Nor are Chinese innovators focused entirely on their domestic market. According to David Jin, managing director and head of BCG’s Shanghai office, some Chinese companies have already tried to out-innovate large MNCs — and succeeded. In one highly publicized case in 2006, Chinese electrical products maker Chint won a lawsuit over its patent for a circuit breaker against the Chinese unit of the French company Schneider Electric. “Usually, it is the other way around,” Jin says, alluding to Western companies accusing those in developing countries of patent infringements. Many high-tech operations are succeeding abroad as well. China Medical Technologies, a supplier of in-vitro diagnosis and treatment systems, competes with MNCs and commands a market share of more than 90% in at least one product segment and 70% in another, according to a July 2008 report from Citigroup Global Markets.

Choosing a Business Model

For companies in developed economies that want to harness Chinese innovation, Wharton and BCG experts say it’s important to select the right business model. These models range from plain-vanilla purchasing through a series of one-off orders, to joint technological collaborations through supplier development programs, to taking an equity position in Chinese suppliers, says David Lee, partner and managing director in BCG’s Beijing office and a supply chain and procurement specialist.

No one-size-fits-all formula exists for such partnerships, Lee adds. He has seen several MNCs invest in their suppliers, but “a lot of them don’t like the idea,” in part because of potential management disagreements. Some Chinese companies “are reluctant to change the way they have worked historically,” he says, adding that the handling of human resources and material waste, in particular, could be points of friction. However, many of them have begun reining in waste of materials in manufacturing processes and increasing wage levels have got them to focus on lean manufacturing and productivity enhancement, he adds.

Many MNCs have rolled out supplier development programs, transferring pieces of technology and attempting to transfer their best practices to Chinese partners. But this, too, is unfamiliar territory for some. Companies from developed economies typically haven’t had to worry much about quality control in their home markets “because suppliers themselves take the initiative to invest in quality-control processes,” Lee says.

Markets are so competitive and dynamic in China that innovation is likely to continue relentlessly. Companies are being pressured for ever more gains in productivity. And where Chinese manufacturing wages were relatively flat for many decades — allowing wage productivity to grow — labor markets have tightened and wages have started rising, Michael points out.

The challenge going forward will be to accelerate productivity growth ahead of any inflationary pressure on wages, he says. The available labor supply in the medium term will not be as large as it was in the past — although the global economic slowdown has idled millions of workers for the moment. But the release of large blocks of talent through the restructuring of state-owned enterprises is almost complete. At the same time, rising farm incomes — at least until very recently — had constrained the supply of migrant rural labor to the industrial centers, Michael explains. That gave labor more leverage. Ultimately, as labor increasingly absorbs more manufacturing resources in the long run, companies will have to push even further for innovative solutions with “a focus on driving more productivity increases in Chinese operations.” The global economic downturn will likely slow the pace of these trends — and even reverse some — in the short term. But over the mid-term and beyond, expect China to build upon its already substantial innovative capabilities in manufacturing and services.

Innovation and Intellectual Property

Does porous intellectual property protection have a negative impact on r innovation? Not necessarily, says Harold Sirkin, senior partner at BCG in Chicago and global leader of the firm’s operations practice. When you innovate, “you’re creating a brand, and that’s a different kind of intellectual property (IP) than a patent.” IP protection is growing less important to innovation, even in the West, Sirkin notes. “The world has gotten so small that even if you invent the next iTunes, you can’t rely on patent protection,” he notes. “It’s readily copied now, everywhere. A lot of the [market appeal with] iTunes and the iPod is about [their] installed base.”

However, innovation and protection of IP have long been connected, and China has duly noted that linkage in its attempts to transform itself from a low value-added manufacturing center to recognized innovation leader, particularly as lower-cost countries compete for China’s core business. Mike Chao, a Principal at BCG in Beijing, notes that, “The IP laws have always been there, but what’s changed in the last 20 years is how they have been interpreted and enforced. There’s a big difference between policy and enforcement.” One notable example is the software industry, where Chao battled piracy with Microsoft China for over five years before joining BCG. After strong lobbying by Microsoft in partnership with the US government, China declared in 2003 that the government would only use legal software. That announcement was followed by two additional decrees requiring that PC manufacturers only preinstall genuine software and Chinese enterprises only use legal software. “While that’s absolutely a step in the right direction, there’s still work to do in terms of bringing up the levels of enforcement and awareness to comply with the policies,” Chao says.

On another front, however, he notes the Chinese government’s tendency to provide research grants to projects that have the same time frame as the tenure of bureaucrats, thus sacrificing long-term horizons for short-term gains. “Innovation requires a long-term approach, and companies need to know their hard work won’t just be stolen right away.” Therein lies the difference between betting the company on the “R” or the “D”: “Research is never a sure thing, but development can consistently result in realizable output,” Chao explains. “With the recently announced government stimulus programs, there is hope that more funding will go to the companies that can actually productize that research and bring it to market.” Academic institutions that have traditionally received such grants have “not had a great track record in commercialization,” Chao points out.

Evolving IP policies, however, will not necessarily be the savior to spurring a wave of innovation in China. “At the end of the day, the market will force you to innovate and differentiate, and if your company isn’t doing that, someone else will.” Chao points to the PC industry as an example. Prices of notebook computers dropped 13% on average in China last year, in large part due to pressure from netbooks, other low-cost offerings, and a general lack of differentiation. “Asus saw an opportunity to disrupt the industry with the netbook, and now PC companies are dropping prices and scrambling to catch up.” Innovation is and has always been the key to competition. China’s ability to do so effectively will undoubtedly determine its future in the global economy.

Source: Knowledge@Wharton

China’s employment situation improving

China’s employment situation is improving. That’s the message to come out of the State Council’s meeting on Wednesday. But the top administrative body also acknowledged that the situation is still severe as the country’s economic recovery is not yet secure. It also produced new measures to safeguard jobs.

Premier Wen Jiabao chaired the State Council’s regular meeting, which focused on employment. The central government said new jobs so far this year exceeded 3.6 million by the end of April and migrant workers are returning to factories. It added the country’s job situation has made a turnaround from the slide seen in the forth quarter of last year.

But the State Council admitted it’s not yet clear what the full effects of the global financial crisis will be for China and that uncertainties remain in its recovery. It cited fewer new jobs and a higher jobless rate compared with 2008. The State Council also said a 42 billion yuan special employment fund in the central budget should be put in place as scheduled. That’s 67 percent more money than was allocated last year.

Regarding the creation of new jobs, the government pledged to bolster private economies, which always provide the largest pool of employment. It also said that various industrial development plans should focus on job creation.

College graduates, migrant workers and low-income families will get more help. And the government will offer training programs for all kinds of people, from migrant workers to graduates. The government called for improved job center services and will now offer subsidies to interns serving in central and western China.

Since the second half of 2008, China has implemented various measures to boost employment. And now, the State Council said it would redouble efforts to help people ride out the economic downturn.

Recruitment fair for overseas graduates

A job fair targeting overseas graduates was held recently in Beijing. It attracted more than one thousand graduates who had returned to China, diploma in hand.

45 companies and institutions attended the fair, bringing nearly 600 job opportunities with them. Some potential employers included the Chinese Academy of Sciences, Shougang Group, and China Agricultural University. On the other side, graduates of overseas universities have adjusted their requirements, such as location and salary.

She said most of her fellow students had lowered their expectations on salary. But many employers say they are not interested in the educational background of job seekers. What they care for is the actual ability to work.

Overseas Graduate, said, “The advantage of overseas graduates is mainly in their language skills. But as foreign-funded firms are in depression, there is less room for us to make use of our advantage.”

After staying overseas for a long time, these students are not familiar with the domestic working environment. This is a major concern for employers who attended the fair. Some overseas graduates say they hope there will be more chances for them to have face-to-face talks with domestic firms, because that will help them get the experience they need.

Graduates struggle as China slows

At a recent job fair in Beijing, thousands of soon-to-graduate Chinese university students dashed from employer to employer handing over their resumes.

Just a few hours after the two-day fair opened, one company had received 50 job applications for just five positions.

Final-year Chinese students, like others across the world, are currently looking for their first job as they prepare to graduate.

But in China this is the first time in many years that the outlook has been so bleak – and this year there will be 6.1 million new graduates.

The vast China International Exhibition Centre in Beijing has several aircraft-hanger-sized halls, and last week it hosted a job fair geared towards graduates.

Fewer jobs

Companies with stalls at the fair said there were just not as many jobs available this year compared to previous years.

One of those with fewer vacancies was Best Talent, a recruitment firm that finds senior and middle managers for international companies.

“There are a lot of candidates at the moment, but even those with a good education are finding it difficult to find jobs,” said the company’s Vicky Liu as she accepted a curriculum vitae from yet another job hopeful.

A few months ago, the Chinese Academy of Social Sciences estimated that about 12% of last year’s graduates had still not found jobs.

That figure was three times higher than the official urban unemployment rate.

Last week’s fair attracted students from across China, including 24-year-old Zhang Hai, who is about to graduate from a university in far-off Nanjing.

“Because of the financial crisis the outlook is not that good,” said Mr Zhang, who is spending two months in China’s capital looking for work.

“There are not that many jobs, but lots of students looking for work so obviously there’s a lot of competition,” he added.

Mr Zhang, who has been studying computer science, has been given money by his family to rent a flat in Beijing while he looks for work.

“I’m just about to graduate, I’m getting older and I’m still using the family’s money so of course there’s some pressure on me to find a job,” he said.

Who to blame?

Despite the tough competition, students do not seem to be blaming the government for the current difficult job situation.

“It’s a pity, but I can’t complain too much. I just have to continue looking for something suitable,” said Wang Jiumei, who also attended last week’s Beijing job fair.

The 25-year-old student, who studies English in the nearby city of Tianjin, intends to go abroad to continue her studies if she cannot get a job.

Chinese government officials will be pleased to hear that students are not blaming them for their poor employment prospects.

They had been worried that high graduate unemployment could lead to discontent which, in turn, could cause social unrest.

The Tiananmen protests, which took place 20 years ago in May 1989, showed the government that dissatisfied students are capable of taking their demands onto the streets.

“For the last 20 years the government has been concerned about keeping the university population happy,” said Arthur Kroeber, managing director at Beijing-based economic research firm Dragonomics.

He said the current employment problems facing graduates was not just because of fewer jobs, but also because there are now more graduates.

But Mr Kroeber believes the problem will sort itself out over time as university students lower their expectations.

“Certain kinds of clerical jobs that used to require only a high school education will increasingly be taken up by people who have a university education,” he said.

Help from the government

But the Chinese government is not just sitting idly by and hoping that will happen. Officials are trying everything they can think of to help graduates find a job this summer.

In the city of Weifang, in Shandong Province, officials in one government department have been told they each have to find jobs for three graduates.

In a country where personal networks are important, Weifang officials have been asked to use all their contacts and influence.

Beijing city government has just announced a scheme to employ 1,600 graduates on three-year contracts as assistants to officials in the villages around the city.

This will not only help develop rural areas, but also find jobs for students who might otherwise be out of work.

The salary for these positions is relatively low – 2,000 yuan ($293, £183) a month for the first year – but the city government is promising other perks to encourage potential applicants.

After their contracts finish, village assistants could be given a Beijing resident’s permit, which is vital for all those that want to continue working in the capital.

There are those who believe the Chinese economy is in good shape – despite the global recession – and will soon bounce back, creating more jobs for graduates.

Oliver Huang, whose company Mediaco helps foreign firms check how their brands are doing in China, is optimistic.

“Markets in Europe and the US are now mature, but China is still an emerging country, where the demand is still huge,” he said at the Beijing job fair.

But with economic growth slowing and unemployment rising, the government is taking no chances.

Officials ordered to pull strings for graduates

An order for officials to pull strings to ensure jobs for graduates has sparked heated debate in an east coast city.

The personnel bureau in Weifang, Shandong province, ordered every official in the bureau to use their influence and connections to help at least three university graduates this year, Qilu Evening News reported.

Netizens doubted whether graduates from poor families, among the 60,000 graduates hunting for jobs in Weifang this year, would get priority for assistance.

Zhang Zhengzhi, the deputy director of Weifang’s personnel bureau, said the May 14 order is not compulsory and would give priority to poor students.

“Do the math – 60 officials can only help 180 graduates in our city,” he said.

“We only want to set an example to promote employment rather than take care of all job hunters.”

In the face of a gloomy employment crisis, a Chinese human resources expert yesterday warned that local governments should make more efforts to facilitate the transfer of information between graduates and enterprises.

“The rule may put pressure on officials, who might play tricks with some companies to provide temporary offers to graduates to enhance the employment rate,” said Wu Yongping, deputy director of public policy and management institution under Tsinghua University. “An official’s duty should focus on organizing more employment fairs for students, and providing students’ information to companies.”

China centrally administered SOEs to recruit more graduates

China’s 99 centrally administered state-owned enterprises (SOEs) planed to recruit more than 203,000graduates this year as to ease job pressure, the state-owned assets administrator said.

The recruitment number is 7 percent more than that of the previous year.

The State-owned Assets Supervision and Administration Commission (SASAC) said more than 45 centrally administered SOEs would increase their headcounts this year, while 30 of them would hire the same amount of graduates compared with last year.

China National Petroleum Corp., the country’s largest oil and gas producer and supplier, has by far held more than 30 job fairs in universities. It planed to recruit 13,000 graduates this year, an increase of 37 percent year on year.

China Railway Construction Corp., the nation’s largest contractor, has recruited 13,000 graduates, an increase of more than 45 percent, or 4,060 people, compared with 2007.

Among all the SOEs, the Commercial Aircraft Corp. saw the largest increase. It planned to recruit 1,362 graduates, which was212 percent more than its previous plan.

The SASAC said it would strengthen supervision over the SOEs to put in place the recruitment. It also urged to further expand employment by offering more scientific research projects and probation jobs.

Baidu Staff Strikes Over Salary Cuts

Dozens of employees from Baidu’s (Nasdaq:BIDU) South China subsidiary stopped work and began protesting changes to their salaries in front of Guangzhou’s Tianhe District Labor Bureau after negotiations with a Baidu manager failed, reports 163.com. Unnamed employees said they were made to sign a new salary agreement in late April without fully understanding it, and the subsidiary’s sales department was required to sign off on new KPI metrics in March, the report said. The salary revision was carried out nationwide and accepted in Beijing and Shanghai, said a Baidu insider. Baidu did not comment on the news, the report said. Baidu Chief Operating Officer Ye Peng said the company had not experienced a strike and seemed unaware of the protest, according to the report.

The new salary system and KPI requirements, which employees described as “impossible to fulfill,” became effective May 1 and may halve the salaries of most lower-level sales staff, said employees attending the protest. Management will also accept a large pay cut, they said. According to an unnamed mid-level manager, the changes will affect about 200 employees in Guangzhou and more than 1,000 in the entire South China region, including Shenzhen and Dongguan, said the report.

Ye Peng announced the dismissal of three mid-level managers in charge of sales and operation during his visit to the company’s Guangzhou subsidiary on March 27.