Category News of China

Beijing’s GDP per capita exceeds $6,000

Chinanews, Beijing January 8 ¨C The GDP per capita of permanent residents in Beijing was over $6,000 in 2006, ranking it among intermediate developed cities in the world.

The statistics were revealed by Chai Xiaozhong, vice director of Beijing Municipal Development and Reform Commission, last Friday.

Investment is no longer the major booster of economic growth in Beijing, the great leap of domestic consumption having contributed the most to the boom of local economy. Furthermore, most consumption in Beijing has little to do with subsistence, but with entertainment and personal development.

China:70% target for unions in foreign companies

The All-China Federation of Trade Unions has set an ambitious target of having trade unions set up in more than 70 per cent of foreign-funded enterprises this year.

Wang Ying, an official with the federation’s Grass-Root Organization and Capacity Building Department, said more than 60 per cent of foreign-funded firms had set up trade unions by the end of last year, a sharp increase from 2005.

The establishment of unions in Wal-Mart has given a big impetus to many other foreign enterprises, Wang said.

Employees in some multinationals such as Carrefour, McDonald’s, Motorola and Nescafe soon followed suit.

Between July and September, all the 64 Wal-Mart stores in 30 cities established trade unions with the help of the federation, recruiting more than 6,000 members.

It is for the first time the US retail giant allowed its staff to form unions anywhere in the world.

“China’s Law of Trade Union gives workers the rights to set up or join trade unions,” Wang said. “Foreign enterprises must abide by China’s laws if they do business in China.”

According to the law, which was promulgated in 1992, trade unions are formed by employees on a voluntary basis. No organization or individual shall obstruct or restrict them from joining unions.

Wang admitted the federation has met with resistance from some companies, which subtly obstruct workers from setting up unions.

“Many of the foreign enterprises do not fully understand the role of China’s trade unions,” Wang said.

They not only safeguard the legitimate rights and interests of workers but also contribute to the enterprises’ development and fulfil their production tasks, he pointed out.

“Trade unions can play a good role in building and ensuring harmony in enterprises,” Wang said, saying some companies which were long opposed to unions have now changed their attitude.

Wang said unions in foreign enterprises have performed their duties.

For example, the Wal-Mart unions in Fuzhou, capital of Fujian Province, succeeded in persuading the management to raise part-time workers’ wages to 6 yuan (75 cents) per hour, above the lowest wage standard, 5.5 yuan (69 cents).

The stores also agreed to abolish the probation period for part-time workers.

The Wal-Mart union in Shenyang, capital of Liaoning Province, successfully negotiated the right one day off a week.

Dong Yuguo, a spokesman for Wal-Mart (China), said: “The management and the trade union have been getting along with each other very well,” Dong said.

“Our task is to raise workers’ awareness and let them know that joining trade unions is the best way to safeguard their legitimate rights and interests,” Wang said.

At the end of 2005, China had 1.174 million grass-root trade unions, with 151 million members.

Firms face cuts in business in china

FORTY Chinese mainland-listed companies may have their daily trading limits halved starting on Monday as they failed to meet a deadline to convert non-tradable shares, industry sources said yesterday.

Eighteen Shanghai-traded and 22 Shenzhen-listed companies will be subject to a trading ceiling of five percent per day, down from 10 percent currently, people familiar with the matter said.

The two mainland bourses over the weekend approved the latest batch of 32 companies to join in the shareholding reform, which was initiated in May 2005 to make all stocks at mainland-listed firms tradable.

Under regulatory arrangement, controlling stake holders must compensate minority investors with shares, cash or warrants in exchange for the right to float their previously locked ownership.

So far, about 97 percent of 1,300-odd mainland-listed companies have participated in the share overhaul, which regulators had hoped to finish by the end of last year.

Authorities have said companies escaping the stock conversion won’t be allowed to raise additional funds or conduct any new businesses in the capital markets.

Sources said yesterday there’s still a possibility for some of these 40 firms to be exempted from lower trading limits if they can rush to gain the regulatory nod for the share conversion by Monday.

But they also noted companies would face a 10 percent trading limit if they missed the stockholding reform deadline.

The Shanghai and Shenzhen bourses said in late December that firms which don’t join the reform face being eliminated from major benchmark indexes.

The offending companies will also be subject to a different price-bidding system from other listed firms, the two bourses said, without specifying.

Foreign trade barriers cost Chinese exporters US$70 billion

Technical barriers established by foreign countries cost Chinese exporters up to 69.1 billion US dollars last year, said a report from the Commerce Ministry in Beijing on Monday.

“The textile industry has been most affected by barriers, taking up to 43 percent of the losses,” said the report. “Exports of food, poultry, wood products, electronic and machine products were also greatly affected.”

The report said the European Union and the United States had taken the lead in setting high technical standards for Chinese export products, followed by Japan and the Republic of Korea.

These countries usually added items to inspection and quarantine lists or revised trade regulations on the grounds of environmental protection, consumer health and other reasons, said the report.

Among 22 categories of Chinese export commodities, 18 had encountered technical barriers in 2005, said the report.

Chinese export companies were learning to respond rapidly to foreign technical barriers and improve competitiveness in exports, but there was still a long way to go, said the report.

The government started to set up centers across the country this year to analyze technical standards for foreign market access, issuing regular reports for the government and industries.

Under WTO rules, every WTO member has the legitimate right to question new trade regulations by other nations within 60 days of the promulgation. However, the lack of assistance from technical experts and the abstruseness of technical standards often frustrate Chinese companies and prevent them from taking effective action.

One hundred technical service centers are scheduled to be set up by 2010 to cover more than half the country’s export commodities, according to the ministry.

Thirty thousand overseas experts to be recruited

The Ministry of Personnel is bringing in some 30,000 overseas specialists next year to address China¡¯s talent shortage in certain sectors. ¡°The governmnt is to introduce 10,000 economic and technical specialists and 20,000 education, health and science specialists in 2007,¡± Zhang Baolin, Minister of Personnel, told Xinhua News Agency in an interview. Zhang said China should further explore international intellectial resources, which has provided strong support to the country¡¯s overall development. China has already recruited a total of 400,000 specialists from overseas, Hong Kong and Macao special administrative regions and Taiwan.

¡¡¡¡At the same time, China will explore establishing a mechanism to attract Chinese currently overseas to work in the country. The plan also hopes to target foreign talents.

¡¡¡¡The ministry is preparing for the fifth round of job recruitments in Beijing slated for April 21, 2007. For more information, contact.

Job market vibrant, but needs talents

The job market is vibrant and vacancies have increased in the past year, especially in the financial sector, but Hong Kong is facing a shortage of qualified talents, an online recruitment portal said yesterday.

Monster Hong Kong Vice-president Suk Chiu said 58,000 job vacancies were posted on his website in 2006, an yearly increase of 104 per cent.

Vacancies in the banking and finance sector had increased by 56 per cent, with those in banks and accounting/audit firms rising by 28.45 and 102.51 per cent.

The need for more and wider banking services and products has fuelled the growth, he said. “There are more insurance and private investment services today, and they have been creating the demand for talents.”

Accounting firms, too, reported a rapid growth because of a high demand for such services created by the mainland’s economic development.

Vacancies in the marketing and retailing sectors have doubled because of the increasing number of individual travellers from the mainland.

But despite the rosy job market, Hong Kong has a dearth of talents, the Asia regional director of head-hunting firm Hays, Emma Charnock-Smith, said. So serious is the problem that not a single candidate from among the 200 shortlisted by Hays were offered a job by a company.

Such a problem is common particularly in legal, accounting, trading and banking sectors, she said.

This could force companies to hire Hong Kong residents living overseas. “Such candidates have local knowledge and international experience both. They have a good command over Chinese and English, too,” she said.

Companies could also offer a more attractive package, including family allowances, to hire such people.

She said Hong Kong people in Canada and Australia would be more interested in coming back because the Hong Kong dollar was comparatively more competent against their currencies than the greenback or the pound sterling.

ERP Software as GDP Indicator for China

HONG Kong’s jobless rate fell for a fifth straight month in November to the lowest in almost six years, helping sustain the longest economic expansion in a decade, the government said yesterday.

The seasonally adjusted unemployment rate for the three months ended November declined to 4.4 percent from 4.5 percent in October, the government said on its Website. That was the lowest since January 2001 and matched the median estimate of 13 economists surveyed by Bloomberg News.

Banks, transport companies and retailers have stepped up hiring as the special administrative region piggybacked on booming growth on the Chinese mainland. Rising wages, and soaring stock and property prices are underpinning consumer confidence, helping Hong Kong withstand a slowdown in the United States economy.

“This reflects the healthy expansion in Hong Kong that has translated into the labor market,” said David Cohen, an economist at Action Economics in Singapore. “It should be supportive to consumer spending.”

Total employment jumped by 12,900 from a month earlier to a record 3.51 million. The number of unemployed slipped by 7,200 to 161,700, the lowest in more than five years, the report said.

The Brunswick Purchasing Mangers’ Index, a gauge of economic activity in Hong Kong, climbed to 56.3 in November, the highest in three years. The index of employment rose to an eight-month high of 54.3, suggesting companies may step up hiring in coming months.

A tighter labor market has forced employers to raise salaries to keep workers and attract new ones. Wages rose 3.3 percent in the third quarter – an increase that may start to feed into inflation, economists said.

“Labor costs may push prices higher in the next two years,” said Vivian Chiu, an economist at UBS AG in Hong Kong. Still, inflation “isn’t a big crisis at the moment.”

Hong Kong’s consumer prices climbed one percent last year, the first annual increase since 1998. The government forecasts inflation will accelerate to two percent this year.

On November 21, the government raised its forecast for economic growth this year to 6.5 percent from as much as five percent previously, partly because of rising domestic demand. The economy expanded 6.8 percent in the third quarter.

The city has created about 311,000 new jobs since unemployment peaked at 8.6 percent in July 2003, the government estimates. The benchmark Hang Seng index almost doubled in the same period, breaking 19,000 for the first time last month.

As a result, residents are spending more on everything from clothes to transport. Sa Sa International Ltd, Hong Kong’s biggest cosmetics retailer, on November 30 said first-half profit climbed 11 percent as sales jumped.

China to introduce 30,000 overseas specialists

Dec.18 – China next year is to introduce 30,000 overseas specialists that the country is most in need of but also is in great shortage, according to the Ministry of Personnel.

“The government is to fund the introduction of 10,000 economic and technical specialists and 20,000 educational, health and scientific specialists in 2007,” said Minister of Personnel Zhang Bolin.

Zhang said China should further explore international intelligence resources which has provided strong support to the country’s overall development.

China has recruited a total of 400,000 specialists from overseas, Hong Kong and Macao special administrative regions and Taiwan, and has dispatched nearly 40,000 qualified personnel to study overseas.

The Chinese government will fund 10,000 Chinese talents to go and study overseas in 2007, Zhang said.

He calls for more preferential policies for returning students from overseas study so as to draw more Chinese students back to the motherland.

Since 1978, more than 400,000 Chinese students have studied abroad, with more than 100,000 returning to the country over the last two decades.

Official statistics show that government scholarships have allowed 26,658 Chinese to go and study overseas since 1996, and 97 percent of them returned to China after completing study.

Most students go to top notch universities and research institutes in the United States, Great Britain, Germany, Australia and Canada.

Striking tire workers lose cool and present case to customers

STRIKING union members battling Goodyear Tire & Rubber Co took their picket lines to about 150 tire retailers in the United States and Canada on Saturday.

They decided to take their case over health care and retirement benefits directly to consumers.

In Lincoln, Nebraska, 50 United Steelworkers’ members protested at two Goodyear retailers, decrying the company’s use of replacement workers during the two-month strike.

“We know what it takes to build tires, and unskilled workers just can’t do it,” said Gary Schaefer, 54, vice president of the United Steelworkers’ Local 286 in Lincoln. “We do not want the general public riding their lives on temporary workers.”

Goodyear spokesman Ed Markey said the protests do not affect plans to return to the bargaining table in Pittsburgh today for the first time since talks broke down on November 17.

“Our goal in the negotiations remains the same, and that is to reach a fair agreement that enables us to be competitive and win with our customers,” he said.

The company’s temporary workers are qualified and received the same training as all new employees, Markey said. “Goodyear will never compromise quality.”

About 15,000 workers are on strike at 12 US and four Canadian plants.

Goodyear workers went on strike on October 5 after talks broke down on a new contract.

Since the strike began, Goodyear has been making tires at some of its North American plants with non-union and temporary workers, as well as some managers, and relying on production at its international plants to help supply home customers.

In suburban Pittsburgh, more than 80 people handed out fliers and urged holiday shoppers driving past a Goodyear service center to honk in support of employees.

Leo Gerard, USW international president, said the protests were intended to inform consumers about treatment by Goodyear, including plans to slash health care and retirement benefits.

Wall St chief wins US$40m bonus

MORGAN Stanley has given Chief Executive Officer John Mack the biggest bonus for the head of a Wall Street firm, awarding him US$40 million as the company headed for the best profit in its 71-year history.

Mack, 62, was granted shares valued at US$36.2 million, and about US$4 million in options to buy Morgan Stanley shares, Bloomberg News reported yesterday.

Seven other top executives in the company were given bonuses of more than US$57 million.

The payout for Mack, 44 percent more than Morgan Stanley awarded him last year, eclipses the US$38.3 million given in 2005 to Henry Paulson, CEO of Goldman Sachs Group Inc.

Shares in Morgan Stanley, the second-biggest United States securities firm by market value, are recording their best year for investors since 2003 after Mack put the firm on course for record earnings.

“You expect performance to be reflected in the compensation,” said Laura Thatcher, an Atlanta-based partner in charge of the executive-compensation practice at law firm Alston & Bird.

“You’re talking about staggeringly big companies with huge market caps and huge performance.”

Shares of Morgan Stanley have gained 40 percent this year and closed yesterday at US$79.60, giving the company a market value of US$84.2 billion.

The firm may report next week that full-year profit rose 41 percent to US$6.98 billion, the average estimate in a Bloomberg survey of 10 analysts.

Mack, who’s also chairman, received his entire bonus in stock and options, Morgan Stanley said. Last year, he declined a US$28 million bonus because he had worked at Morgan Stanley for only five months.

He accepted a pro-rata payout of US$11.5 million in stock and also received a US$337,534 salary.

Lehman Brothers, the fourth-biggest US securities firm, earlier this week said Chief Executive Richard Fuld received US$10.9 million in stock for 2006, down from US$14.9 million last year.

Mack, who left Morgan Stanley in 2001 when he was president, returned in June 2005 as the board’s choice to revive a firm bruised by a battle with dissident shareholders.

Some of Morgan Stanley’s top executives, including President Stephan Newhouse and Vikram Pandit, abandoned then-CEO Philip Purcell during the dispute and dozens of other bankers and traders quit.

Since Mack joined, Morgan Stanley has fired more than 1,000 underperforming brokers, made acquisitions to bolster the firm’s energy, fixed-income and hedge fund businesses and created new incentives to keep top employees.