Archives 2015

Ericsson on solid ground despite economic slowdown

Global telecom manufacturing giant Ericsson remained resilient despite large patches of economic slowdown around the globe, by reporting a solid $1.68 billion in net income last year.

The company, together with China’s Huawei, is a major supplier of fast mobile broadband that facilitates a blossom of new mobile business – online commerce, online social community and a flurry of other models.

Ericsson is also a major vendor contributing to 3G and 4G infrastructure build-up in China, supplying equipment and technology to China Mobile, China Unicom and China Telecom.

Ericsson’s sales were strong in Asia, the Middle East and Europe, but it said business in North America will remain sluggish with telecom operators there saving cash for more spectrum auctions later. Ericsson has anticipated the North American mobile broadband business to remain slow in the short-term.

“We will continue to proactively identify efficiency opportunities. Ericsson’s cost and efficiency program, with the ambition to achieve savings of approximately 9 billion SEK, with full effect during 2017, is progressing well,” said Hans Vestberg, president and CEO of Ericsson.

Last year, Ericsson made an end to its traditional chipset-making business, after terminating a handset joint venture with Sony in 2009.

Total sales of Ericsson hit 228 billion SEK ($35 billion), flat with the year earlier, adjusted for comparable units and currency factors.

Telecom services showed stable growth driven by managed services and systems integration sales. In Q4 2014 alone, Ericsson signed 17 new managed services contracts with a variety of major operators.

In 2015, Ericsson is said to continue its progress on the Networked Society strategy, focusing on market growth agenda, industrial transformation and corporate profitability.

“In line with our strategy, we have invested into our targeted areas — IP networks, cloud, TV & media, industry & society and OSS & BSS. Sales in targeted areas showed a growth of more than 10 percent in 2014, ” said Hans Vestberg.

Social media help companies tap into pool

A job hunter scans the code at a recruitment fair in Handan, Hebei province. Job ads are being seen more frequently in social media such as micro blogs and WeChat, in recent years.

With social media engaging massive numbers of users in China, platforms like WeChat and micro blogs are increasingly being used as recruitment tools.

Job ads from private recruiters and companies are seen more frequently on micro blogs and WeChat, a sign that Chinese employers have begun to embrace social media recruitment, a move that helps them tap into a larger pool of talent.

“The use of WeChat and micro-blogging is becoming a popular way to recruit. It’s fashionable among recruiters who have accounts on social media platforms,” Zhu Hongyan, a senior career consultant at Zhaopin, an employment website, told China Daily.

“Using social media enables recruiters to reach out to a wider audience more effectively, given that such platforms have become the major information-sharing tool among the prime working age population,” Zhu said.

WeChat enables 468 million monthly active users in the third quarter of last year, while micro blog users surpassed 275 million, according to the China Internet Network Information Center.

WeChat enable users to assemble a huge number of contacts and access a large audience.

Smile Xu, managing director at sports marketing agency Miles Group, posted a job ad for an account manager on her WeChat account in early December and quickly received a dozen resumes.

“Though the number of interested applicants was fewer than expected, they were of better quality compared with traditional recruitment,” said Xu, who regularly posts photos of work and events her agency promotes.

“At least people understand what they are applying for,” she said. “Friends, acting as matchmakers, will brief potential candidates they know about a job because they are in the same field and know what the job entails.”

Fu Zhu, the former recruitment head of e-commerce giant Jingdong, said the traditional hiring channel is facing the challenge of cost and quality, as social recruiting through platforms like WeChat and LinkedIn provides a more time-effective channel.

“Using traditional methods, we can only select from active candidates who send resumes for certain positions. But in China, more skilled employees are passive candidates who can be better reached through social recruiting channels,” said Fu.

Rather than submitting resumes randomly at job fairs and on employment sites, job seekers can now reach recruiters directly and take advantage of targeted job referrals.

“In my WeChat group talk, classmates, teachers and some alumni constantly forward selected employment information related to my specialty, which helps me to target employers more effectively,” said Zeng Qinbing, a senior student at Dongguan University of Technology in Guangdong province.

However, high-profile employers in China appear to prefer the traditional approach to recruitment.

In August 2014, Maximum Employment Marketing Group conducted research on the status of WeChat recruitment for Fortune 500 companies.

While 80 percent of Fortune 500 companies operate in China, only 7 percent have set up specific career accounts on WeChat, and of those, only 19 percent support direct application through WeChat.

“Despite the growing awareness, social media recruiting remains in the early adoption phase,” said Zhaopin consultant Zhu.

Profit growth of China’s state firms slows

Profitability of China’s state-owned enterprises (SOEs) was squeezed in 2014 amid slackening momentum in the economy as it registered the weakest growth since 1990.

Combined profits of SOEs reached 2.48 trillion yuan (404.66 billion US dollars), up 3.4 percent from one year earlier, the Ministry of Finance said in a statement on Thursday.

The growth slowed from 4.5 percent reported in the first 11 months last year and 5.9 percent in 2013.

Business revenue climbed 4 percent year on year to 48.06 trillion yuan while operating costs rose at a faster pace of 4.5 percent to 46.66 trillion yuan.

By the end of December, total assets gained 12.1 percent from the beginning of 2014 to 102.12 trillion yuan while liabilities grew 12.2 percent to 66.56 trillion yuan, the ministry said.

It said auto making and pharmaceutical industries posted strong profit increases, while sectors such as coal mining and chemicals saw notable declines in profits.

Bright prospects for job seekers in China

Multinational companies’ increased interest in the Chinese market and the rapid expansion of domestic companies will boost job prospects and salaries in the country this year, a new survey said on Wednesday.

According to the Salary Survey 2015 released by global recruitment specialist Robert Walters, Chinese employees who plan to change jobs in 2015 can expect their salaries to go up by 15 to 25 percent on average, while those who choose to stay may see wage increases of about 6 to 8 percent.

Employees in Beijing working in industries like accounting and finance, human resources, and marketing can expect a 20 percent growth in wages if they opt for a new company. Professionals working in sales, as well as in engineering-related research and development sectors are likely to see their salaries increase by up to 30 percent.

Employees in Shanghai can expect salary increases of around 20 percent if they are looking for new opportunities in sectors like finance and accounting, banking, human resources, information technology and sales.

The survey expects pharmaceutical and chemical industries to be the top hirers this year, with employees working in the operations and manufacturing sectors of these two industries expected to realize salary hikes of about 30 percent if they switch to another company.

Sales professionals in the luxury industry will see little growth in salaries this year due to the industry stagnancy.

Even though the rising salaries of Chinese professionals have prompted concerns about rising labor costs in China, Alistair Cox, chief executive officer of global recruitment firm Hays Plc, said it is needless to worry about the fewer opportunities. On the other hand, Cox finds it a good signal as the economy is becoming more developed, people are getting more disposable income and standards of living are improving.

“There is a massive domestic market as well, which in many ways is under-leveraged,” he said.

Though the number of employees planning to switch jobs is set to drop slightly from the level seen in 2014, it still remained quite high, with over 71 percent of the 2,448 respondents keen on a change.

The competition for qualified talent, preferably those with overseas working experience, solid knowledge of the domestic market, and higher bilingual proficiency, will be even more intense in 2015 among multinational companies, aggregated by the fact that a growing number of multinational companies are moving their regional headquarters to first-tier cities, said Wang Qiang, managing director of Robert Walters China.

Domestic companies are not lagging behind. In order to hire qualified candidates, a large number of them are providing competitive salaries and compensation packages, as well as equity incentive plans. As a result, some experienced professionals have given top priority to domestic companies, said Wang.

ZTE posts 94% jump in net profit in 2014

ZTE Corp, China’s biggest listed telecommunications equipment maker, yesterday posted a 94 percent jump in net profit in 2014 due to surging demand for 4G network equipment and high profit margins from growing sales of smartphones overseas.

Its net profit totaled 2.63 billion yuan (US$423 million) last year. Revenue reached 81.2 billion yuan, up 7.99 percent, ZTE said in a statement to the Shenzhen Stock Exchange yesterday.

The rapid development of 4G services in 2014 fueled the demand for 4G base stations.

By November, China boasted 75 million 4G users. China Mobile, China Unicom and China Telecom have built a total of 700,000 base stations, surpassing an original target of 500,000 stations.

On the other hand, ZTE expanded business in overseas smartphone markets which offer higher profit margins compared with the domestic market.

ZTE aims to double sales to 20 million units in the US market this year.

The company also plans to surpass LG to become the No. 3 US smartphone vendor within two or three years, according to Cheng Lixin, chief executive of ZTE North America.

China banks’ 2014 new yuan lending hits record high

China’s new yuan-denominated lending in 2014 hit record high at 9.78 trillion yuan (1.58 trillion U.S. dollars), up 890 billion yuan from one year earlier, latest data showed on Thursday.

In December, banks’ new lending reached 697.3 billion yuan ,up 214.9 billion yuan from the same month of 2013, said the People’s Bank of China (PBOC), the central bank.

M2, a broad measure of money supply that covers cash in circulation and all deposits, increased 12.2 percent year on year to 122.84 trillion yuan at the end of December, according to the PBOC.

The narrow measure of money supply (M1), which covers cash in circulation plus demand deposits, rose 3.2 percent year on year to 34.81 trillion yuan at the end of December.

Total social financing in 2014 stood at 16.46 trillion yuan, 859.8 billion yuan less than 2013, according to data released by the central bank.

Hainan drug firm sues Tencent over derogatory posting

Internet giant Tencent Holdings Ltd may be facing a lawsuit from a pharmaceutical company based in Hainan province for allowing the spread of false information via its instant messaging platform WeChat.

In July, a WeChat post claimed that a medicine known as nimesulide granules, produced by Hainan Honz Pharmaceutical Co Ltd, had caused at least four deaths.

The drug is intended for the treatment of ear, nose and throat infections.

In early August, Honz reported the case to the local public security authorities, which determined that the rumor was false.

In December, Honz posted on its official WeChat account what it said was an apology from the source of the rumor as well as the case description from the local police to refute the rumor, but this move had little effect.

It then served notice on Tencent, urging the latter to delete, screen out and break the links of the false information, but it said it received little positive response from Tencent. The drug firm visited the headquarters of Tencent in mid-December to negotiate, it said, but was disappointed again.

As a result, Honz filed a lawsuit against Tencent. Haikou city’s Xiuying District People’s Court has put the case on record, the pharmaceutical company said on its official website on Tuesday.

Tencent told China Daily on Thursday that it had not received any legal claims.

Since the rumor spread on the Internet, sales of nimesulide have been heavily affected, as have sales of other medicines under the same brand, Honz told China Daily.

According to Guosen Securities Co Ltd, annual sales of nimesulide were about 100 million yuan ($16 million) between 2012 and 2014.

Honz is the largest nimesulide producer in China.

“With the rapid development of social media, which is represented by WeChat, rumors go viral due to the incomplete oversight system. It is quite difficult to monitor users’ behavior and words on social media, let alone take any regulatory or administrative steps.

“If there are no effective measures taken soon, there will be more individuals and companies that are harmed by rumors. The task of refuting rumors will also become even more difficult,” the company said in the response.

However, there appears to be a silver lining for the company. The Supreme People’s Court in October issued a judicial interpretation regarding Internet infringement, in which the plaintiff could order the Internet service provider to give the name, contact information and Internet address of an Internet user who is suspected of infringement.

“Technically speaking, all the requirements set by Honz can be met,” said Liu Haiyang, partner of the Guangzhou-based Guangda Law Firm, who is the attorney for Honz in this case.

“Tencent has the obligation to delete, screen out and break the links of the false information as an Internet service provider. As there is no precedent of a similar case, the case from Honz is very likely to set a precedent for later Internet infringement cases.”

Firms grappling with compliance talent shortage

Graduates seek prospects at a job fair in Hangzhou, Zhejiang province. They face tougher challenges in a slower economy.

Recruitment agencies find it difficult to satisfy demand as need for specialized regulatory professionals grows in several sectors

The Chinese job market will see rising demand for compliance professionals in 2015, a report suggests. The United Kingdom-based recruitment specialist Hays Plc said in its forecast that the huge growth in demand for compliance experts will be the most important trend in the next 12 months.

The government’s anti-graft campaign, as well as ongoing changes in the regulatory environment, will lead to the increased demand for compliance professionals, and the trend is expected to continue in the coming years.

According to Simon Lance, regional director of Hays in China, compliance staff usually see their salaries rise by 15 percent every year. But due to the huge shortage of candidates, experienced professionals are very likely to see their salaries increase by 30 percent or even 40 percent.

The closer cooperation between China and the United States after the 2014 APEC meeting, which was held in Beijing in November, will also result in higher demand for such talent, said Lance.

This is largely because the Chinese market will open further, and Chinese companies will need to learn more in terms of compliance.

Lance said that the demand for compliance talent will be even higher in the banking industry and elsewhere in the financial sector, including insurance, funds and securities firms, as well as in the pharmaceutical industry.

Global insurer Allianz SE got involved in compliance affairs in 2008 and set up its own compliance department one year later. The compliance staff increased from three to four people in 2014, of whom three have legal backgrounds.

Maria Zhang, head of the human resources department of Allianz China General Insurance Co Ltd, said: “Within Allianz, the compliance department is mainly responsible for working closely with the supervisory authorities and submitting reports or documents as required. It will also implement compliance projects within Allianz and manage contracts, internal controls and legal affairs.

“It is an independent department that also provides legal and compliance advice to other departments,” Zhang said.

Pete Chia, managing director of recruitment service provider BRecruit China, also said that the healthcare, vehicle, finance and high-tech sectors have a higher demand for compliance talent.

“We foresee cooperation between China and the US will be booming in the above industries. During this process, mergers and acquisitions are definitely the favored strategy for companies on both sides.

“Compliance people play the important role of making sure the acquisition and operations after the acquisition in one country obey the laws and policies of another country,” Chia said.

“Recently, we received many assignments from pharmaceutical clients, which urgently seek candidates who are well-versed in the laws of both China and the US.”

“Healthcare, vehicle, finance and high-tech companies are keen to find compliance staff. Generally, they have very specific requirements, but language skills, law certifications in both the US and China, and deep project experience are preferred by MNCs.

“Salary is not the only key factor in retaining these people. Based on feedback from our candidates, they care more about the job scope, authority and career development,” he said.

Zhou Tian, 30, received a law degree last summer and soon landed a compliance job in a local securities company in his hometown of Wuxi, in Jiangsu province.

To him, this is an ideal job, which is a little bit different from traditional legal work while also giving him a chance to enter an industry that provides opportunities to learn new things.

“The Chinese legal system is not yet mature. Neither is the Chinese finance industry,” said Zhou.

“There are only a few people working as compliance professionals at present. Therefore, if I can really obtain more financial knowledge, I can do the job really well in the long run. And the salary is also quite good, this is already quite attractive to me.”

Chia from BRecruit also added that the growing number of Chinese companies going public in overseas markets have helped boost the demand for compliance talent, with jobs in investor relations getting a lot of attention from Chinese companies.

“Many companies consider an IPO not as an end goal but as the starting point to enter the global market. This vision boosts the demand for compliance talent,” he said.

However, it is quite difficult to find the right compliance talent in China. Lance from Hays said that the pool of candidates is quite small in the country, but that is also the case globally.

Chia said that the major way to find such people is still the internal referral, as many compliance openings are not publicized.