Category News of China

Manufacturers face testing times with China, study shows

Monday 28 August 2006
Australian manufacturers are experiencing increased competitive pressures in their dealings with China, while at the same time they now see China as the most important market in which to grow their business outside Australia, according to a major new study released today by the Australian Industry Group.

The report, Australian Manufacturing and China: Deepening Engagement has estimated that while Australian manufacturers in 2005/6 have accumulated over $6.8 billion in benefits from China (for example, through increased exports to China and savings from using Chinese global supply chains), the benefits fall short of the losses in sales in domestic and overseas markets from competition from China (totalling over $7.6 billion), resulting in a net financial loss of $880 million.

Ai Group chief executive Heather Ridout says the findings, based on a survey of 700 Australian manufacturers, confirm that China is imposing ever increasing competitive pressures on their businesses.

“Over the past two years, the proportion of companies impacted by China has grown from 70% to 84% and China is making deeper inroads into Australia’s domestic and overseas markets,” she says.

“Manufacturers identified China as the strongest potential overseas market”

The study found that among surveyed companies around 8% of manufactured exports go to China; one in every 16 surveyed companies has an operation in China; and China is the chief source of foreign inputs into domestic production. Annual income from manufacturing investments in China is estimated to be close to $1 billion.

“While very large manufacturers and affiliates of foreign owned entities are starting to reap slight net financial gains, the majority of manufacturers are finding it tough to secure benefits,” Ridout says.

“Overall there remain considerable concerns about non-tariff barriers in China, including the lack of intellectual property protection. A major finding of the study was that Australian businesses are highly concerned about the incidence of Chinese made counterfeit and pirated goods being sold on the Australian market.

“The perception of Australian manufacturers is that dumping of Chinese goods on the Australian market (at below the price to make and sell in China) is also accelerating significantly.

“Consequently, many manufacturers remain unconvinced of the overall benefits of a Free Trade Agreement, although support for an FTA is growing and has increased from 13% in 2004 to 24% in 2006.”

Ridout calls on the Federal government to put in place mechanisms as part of its planned Industry Statement so that Australian manufacturers can boost their competitive position in their business dealings with China.

“We need to strengthen our innovative capacities, build world-class skills among our manufacturers, and be prepared to deal with the ever increasing impact of Chinese competition, as well as helping to open up the Chinese market to Australian businesses so that they can establish partnerships and build supply chains,” Ridout says.

Ai Group has also welcomed the recent clarification of the government’s position that the existing tariff phase-down plans for the Textile, Clothing and Footwear and auto industries were “not negotiable” under FTA discussions with China.

Analysys International Says China’s Online Recruitment Market Reached RMB 160.9 Million in Q2 2006

BEIJING, Aug. 25 /Xinhua-PRNewswire/ — Analysys International, a leading Internet based provider of business information about technology, media and telecom (TMT) industries in China, says in its recently released report ”China Online Recruitment Market Quarterly Tracker Q2 2006”, that China’s online recruitment market reached RMB 160.9 million in the second quarter of 2006, increasing 8.44% quarter over quarter.

According to the report, in the second quarter of 2006, online recruitment revenues from nationwide recruitment websites accounted for 76.4% of the total online recruitment market in China, and revenues from provincial websites accounted for 19.3% of the total market.

As the entire market size expands, online recruitment service providers began to emphasize on mobile Internet applications and provided SMS services. China’s rapid growing working population brings huge development potential for online recruitment market. Overseas venture capitals are also giving attention to this market.

Analysys International says those vendors who can provide individualized services will be able to take the lead in charging service fees from users. More and more online recruitment websites have strengthened local market development.

Online service and offline promotion have become a major profit pattern of online recruitment business. As online recruitment industry develops, the market will gradually be segmented. Industry-based specialized services will be more and more favoured by users.

This subject is further discussed in Analysys International’s research report ”China Online Recruitment Market Quarterly Tracker Q2 2006”. For more information, please check the website: http://english.analysys.com.cn/ .

CareerBuilder.com Partners With 51job to Expand Into China

CHICAGO, Aug. 23 /PRNewswire/ — CareerBuilder.com, the U.S.’s largest online job site with more than 23 million unique visitors* and over 1.5 million jobs, announced it is adding another partner, 51job, Inc., to its international network to bring more recruitment resources to employers and job seekers. 51job is China’s leading human resource services provider and operates http://www.51job.com/ , the Web site with the most registered members, the largest resume database and the highest daily traffic in China.

Under the exclusive agreement, CareerBuilder.com and 51job will have links to each other on their sites as well as sell job postings and access to their resume databases. The alliance will provide job seekers in both countries instant access to a multitude of new job opportunities in virtually every industry.

“The recruitment landscape has changed dramatically; employers now need to have access to candidates in multiple countries,” said Farhan Yasin, President of the International Group at CareerBuilder.com. “Partnering with 51job will not only introduce CareerBuilder.com clients to China’s most influential recruitment site and vice versa, it will allow CareerBuilder.com access to the fast-growing Chinese recruitment market.”

“We are delighted to collaborate with areerBuilder.com in the U.S. and Canada,” said Rick Yan, President and Chief Executive Officer of 51job, Inc. “We believe this alliance will allow both companies’ clients access to millions of potential candidates.”

*comScore Media Metrix, May 2006 About 51job

51job, Inc. is a leading provider of integrated human resource services in China with a strong focus on recruitment related services. Offering a broad array of products and services, 51job connects millions of job seekers with employment opportunities and streamlines the recruitment process and human resource administration for tens of thousands of companies in China. Through print advertisements in 51job Weekly and online recruitment services at http://www.51job.com/ , both domestic Chinese employers and multinational companies alike are able to attract, identify and recruit new employees. 51job also provides executive search services and a number of other value-added human resource services, including training, business process outsourcing and salary surveys. 51job’s nationwide office network in China spans 25 cities operating 23 local editions of 51job Weekly and Hong Kong.

About CareerBuilder.com

CareerBuilder.com is the nation’s largest online job site with more than 23 million unique visitors and over 1.5 million jobs. Owned by Gannett Co., Inc. , Tribune Company , and The McClatchy Company , the company offers a vast online and print network to help job seekers connect with employers. CareerBuilder.com powers the career centers for more than 900 partners that reach national, local, industry and niche audiences. These include more than 150 newspapers and leading portals such as America Online and MSN. More than 250,000 employers take advantage of CareerBuilder.com’s easy job postings, 18 million-plus resumes, Diversity Channel and more. Millions of job seekers visit the site every month to search for opportunities by industry, location, company and job type, sign up for automatic email job alerts, and get advice on job hunting and career management. For more information about CareerBuilder.com products and services, visit http://www.careerbuilder.com/ .

U.S. staffing companies in China see chance for profits

NEW YORK, Aug 27 (Reuters) – China may have plenty of man power, but it could also use some help from Manpower.

U.S. staffing company, Manpower Inc. , is one of a number of business recruiters putting emphasis on the world’s most populous country, where a rapidly developing economy is driving the demand for engineers, finance professionals and technology specialists.

China’s growth rates of about 10 percent per year, which already makes it the world’s No. 4 economy, pushes companies to develop leaders at a faster pace than most other countries.

A McKinsey & Co. study estimates that, within five years, China will need 75,000 executives who have either Western technical skills or language ability — ideally, both. Only about 5,000 are in the work force now.

“The challenge is not in finding 500 or 1,000 people to man the factory. The challenge is in finding leadership skills and functional management skills,” said Iain Herbertson, president of Asia-Pacific for Manpower, which has 350 consultants in 11 Chinese cities. About half its contracts are for information technology workers.

For now, the numbers are relatively modest. Of Manpower’s $4.4 billion in second-quarter revenue, the “other” segment — which includes China, Japan and Australia, as well as Mexico — reported sales of $577 million. Its operating profit of $15 million was about 9 percent of Manpower’s quarterly total. ADVERTISEMENT

But the segment is among the company’s fastest growing. Within three to five years, Manpower will have a staff of 1,000 to 1,600 in mainland China.

New rules this month allowed foreign companies to own a controlling stake in their local joint ventures if they set up shop in Pudong, the fast-growing financial center in Shanghai.

The move is part of a broader relaxation of rules, which should help draw more companies to China, and will enable Manpower to expand its range of services, Herbertson said.

“Our business is more than doubling every year,” Herbertson said in a telephone interview from Shanghai.

Monster Worldwide , which this year raised its stake in ChinaHR.com to 45 percent, may take majority control of the venture by 2008, though the unit is currently losing about $2 million per quarter.

“We don’t expect it to be (profitable) because we are at the beginning of the beginning,” said Marcel Legrand, Monster’s senior vice president of strategy and corporate development. “Profit is not of great interest to us in that particular market — it’s about an investment.”

ChinaHR has about 600 staff and 4 million resumes on file, but those numbers will grow as more Chinese go online, Legrand said.

Monster, parent of the world’s largest recruitment Web site, followed customers like Procter & Gamble , L’Oreal , and Hewlett-Packard to China, which fits with a goal for international operations to account for more than half of its revenue by next year.

That global expertise, including serving multinationals in other markets, is what differentiates companies like Manpower and Monster from their smaller competitors.

“We can bring to China the best of what happens in Brazil, or what happens in Korea, and they can help us export their best practices,” Legrand said.

This week, Monster hired a former Nike Inc. executive, Tony Balfour, to head its Asia-Pacific operations.

He will have competition.

Rival job site Careerbuilder.com on Wednesday said it was entering the Chinese market in an exclusive deal with human resources company 51job Inc. , to link to each others’ sites and sell job postings and access to their resume databases.

At executive recruiter Heidrick & Struggles International Inc. , Asia-Pacific operations had faster revenue growth and highest profit margins than either the United States or Europe. The region accounts for 10 percent of total company sales, and China about a fifth of that.

Since rules are different depending on the services offered, Heidrick owns 90 percent of its Chinese joint venture, said Kevin Kelly, who heads Heidrick’s European and Asian operations, adding that consumer goods, technology and industrial companies are its main clients.

Financial companies, including investment banks, will need experienced staff starting in 2008, when new rules take effect under China’s commitment to the World Trade Organization.

Heidrick’s China operations are expected to double within three years, and the company is recruiting Chinese-speakers in the United States and Europe for positions there, Kelly said.

“European and U.S. markets are more mature, so everyone sees China’s huge potential for developing or expanding their businesses,” Kelly said.

Labour Law in China – Where are we now?

21/08/2006
By Frank Mulligan, Talent Software

The labor law in China is about to be changed radically. The current law has been in operation for many years but it was created many years ago and necessarily has weaknesses.

Setting out the basis of the current law, I thought, might be a good way to build a base for comparison with the expected changes in the new law.

So here is a quick summmary of where we are now. It is meant as a quick refresher and should not be taken as legal advice.

* Employer and employees need to enter into a written employment contract. However, an oral contract is also enforceable.

* Contracts can apply to a fixed period, an open period, or a specific project.

* There can be a trial period of no more than six months during which time the employer can terminate the employment contract.

* The law allows for a clause requiring employees to keep business information confidential.

* Employers can terminate on 30 days notice, if the employee is not able to do his work due to illness or injury but if he is still being treated this does not apply.

* Termination can be carried out if the employee is not suitable for the work he is doing. This decision must be made after training or alternative work has been given.

* The contract becomes unenforceable because a ’major situation’ has changed on which the employment contract mainly relies. This has not been defined.

* Employees should give 30 days notice except when they are are in the trial period or the employer does not satisfy his end of the contract.

* Redundancy is a vague area that allows an employer to dismiss an employee if the company is about to go bankrupt. Payments to employees equate to one month’s pay for every year with the company.

* The work week is an 8-hour day with no more than 44 hours per week and at least one day off per week, in practice always 2.

* Paid leave is mandatory but depends on local regulations. There is a 90 days maternity leave provision.

* Disciplinary action has a definite path. First an oral warning, then a written warning and finally, dismissal. If this is not followed the dismissal is invalid.

* If the breaches of discipline is very serious instant dismissal is available.

So we can easily see that the basic labor laws in China are not so complicated and many areas are sufficiently vague as to require a new definition.

The current regulations are under review and the government has invited submissions from concerned parties. The new contract law is likely to differ considerably from the current law in terms of details and provisions. The object is to make it fairer and clearer for all parties, and to underline the rights of workers in a market that is considerably different from the one that pertained when the original law was written.

Next week we can make a comparison with what is expected in the new law.

Global Executive search revenues up 18% over previous year

21/08/2006
According to the latest quarterly State of the Executive Search Industry report by the Association of Executive Search Consultants (AESC), executive search industry revenues increased 14% over the previous quarter and 18% over the previous year. New searches worldwide were up 6% from Q1 2006 and the average revenue per consultant rose 14% from Q1 to Q2 2006, a sharp rise from the previous quarterly increase of 3%.

Commenting on these figures, AESC President Peter Felix noted, “Executive search industry revenues continue to build momentum with global figures consistently increasing quarter over quarter and year over year. By year end we expect that most member firms will be reporting significant increases over 2005.”

Industry Trends
All reported industries experienced an increase over the previous quarter, with the exception of the Industrial sector, which revealed a 3.8% decrease (in contrast to the previous quarter in which this sector accounted for the largest increase). The industries experiencing the largest quarterly increase of searches in Q2 2006 were Non-Profit (+34.7%) and Financial (+17.8%); both figures more than double the previous quarterly increase for these sectors.

Consistent with previous quarters, the Financial sector captured the largest share of number of searches started as compared to all other reported industries, with 26.4% of the market. The Industrial sector followed with the second largest share, 21%. Consumer Products (16.8%), Technology (15.7%), Life Sciences and Healthcare (12%), Non-Profit (4.6%), and the Professional Services (2.2%) sectors round out the industry breakdown.

Regional Trends
North America saw a minor quarterly increase (+0.8%) in the number of searches started in contrast to the previous quarter on quarter increase of 13.1%. Europe experienced an increase of 3.4% in searches started. Asia-Pacific revealed a significant increase of 18.9%, in comparison to a previous quarterly drop (-3.7%). Central/South America witnessed a 13.4% increase in searches started in Q2 2006.

European Market Share
UK searches accounted for 29.9% of the total European market, a 5.4% quarterly decrease. The number of searches started in Germany also decreased (-1.7%) from the previous quarter, with Germany capturing 13.8% of the total market. Similarly, France saw a quarterly drop (-3.9%) in searches following a previous rise of 7%, resulting in a 9.5% Q2 2006 market share for France.

This data was collected from a sample of AESC member search firms representing the activity of over 1,200 executive search consultants in 42 countries worldwide. AESC access to job search data positions this report as a leading indicator of the future worldwide job market and a barometer of hiring trends in key market sectors.

A full copy of the Q2 2006 State of the Executive Search Industry report is available upon request (for AESC members and the press). Please contact Natasha Renton at nrenton@aesc.org.

www.aesc.org

Apple says probe finds no serious labor violations at China iPod factory

Apple Computer Inc.’s investigation into claims of poor working conditions at a Chinese iPod factory found no forced labor or other serious violations, the company said Friday.

Apple added that it was taking immediate steps to deal with excess overtime and other issues.

The probe by the Cupertino, California-based company, was in response to a report by a British newspaper, the Mail on Sunday, which alleged that workers at the factory were paid as little as 27 British pounds (US$50; euro40) a month and forced to work 15-hour shifts making the digital music players.

“The team reviewed personnel files and hiring practices and found no evidence whatsoever of the use of child labor or any form of forced labor,” Apple said in a report on its Web site that summarized the findings of its audit of the facility.

However, the probe did find that in many cases workers were exceeding the company’s limits for overtime, which specify a maximum of 60 hours or six days a week.

“We found no instances of forced overtime,” the report said. But it said weekly limits were exceeded 35 percent of the time in a seven-month period and that employees worked more than six days in a row 25 percent of the time.

The company running the factory, which was not named in the report, was ordered to enforce Apple’s overtime limits, it said.

The inspection also found that in at least two instances workers were made to stand to attention for disciplinary reasons.

“Apple has a zero tolerance policy for any instance, isolated or not, of any treatment of workers that could be interpreted as harsh,” the report said. It said the factory has launched an “aggressive” manager and employee training program to prevent such behavior, it said.

While conditions in the factories, cafeterias and most dormitories were good, the audit found overcrowded conditions at two leased dormitories, which are now being expanded to allow more space.

The factory, which supplies electronics components and accessories to other companies as well as Apple, is a small city in its own right, with clinics, recreational facilities, buses and 13 restaurants serving its 200,000 workers.

China suffers a big loss in human resource utilization

Chinanews.cn)
Updated: 2006-07-26 16:33

The Social Sciences Documentation Publishing House under the Chinese Academy of Social Sciences recently published the Chinese Human Resources Development Report in 2006. The report points out that due to some traditional concepts and institutional defects, human resources in China have not been fully utilized and it is alarming that a great part human resources are wasted.

Regarding the human resources waste, researchers define the following four circumstances: firstly, some people are allocated to the right position, but their capabilities are not fully utilized. In other words, these people can do more in addition to their present work; secondly, some people are allocated to the wrong positions; thirdly, some people are superfluously allocated to a certain position. A job which can be done by three people, for example, is actually allocated to five people.

It is estimated that about 25 million professional people in China were wasted in 2005,because their capabilities were not brought into full play. Economic ally, this alone caused a loss valued at around 900 billion yuan.

Yu Zhonghua, one of the writers for the report, said that in order to assess how China utilized its human resources and what effect it brought to the social and economic development, they kicked off a large investigative campaign in various departments in May, 2005. During this campaign, they issued 8,000 questionnaire forms to various Party and political institutions, national public institutions, and other organizations.

By analyzing the result, researchers find that in China, a strange phenomenon prevails in the human resources market. Employers like to hire people with a master’s or doctoral degree and think that the more these people are in their company, the better. Those who hold a B.A. or B.S. degree can be put on hold. Those who have graduated from junior college or vocational schools should not be considered at all.

In light of this, Yu said, the waste of human resources has already caused practical harm to the society. As a typical reflection of such waste, a large number of people in society tend to pursue a higher college degree, consequently causing college education to expand overly rapidly. As a result, vocational education is adversely affected and a lot of talented people choose to go abroad to find a job.

Now Hiring in China

By Rick Aristotle Munarriz (TMFBreakerRick)
August 8, 2006

Running a human-resources business in China has to be like shooting fish in a barrel. Between a dynamic economy that has grown at a 10% clip over the past few years and 1.3 billion potential hires in the world’s most populous nation, 51job (Nasdaq: JOBS) is in a good place. Unfortunately, investors think the company should be in an even better place.

Monday night, the company behind the popular 51job Weekly employment classifieds publication saw second-quarter revenues climb 18% higher to hit the U.S. equivalent of $21.7 million. That may not seem like much, especially when you consider that the slower stateside economy still found Monster.com parent Monster Worldwide (Nasdaq: MNST) posting a 36% spike in revenues over the same three months.

However, it’s also important to contrast 51job’s slower print business — whose revenue climbed just 7% higher during the quarter — with the online-recruitment and executive-search segments, which posted hearty top-line improvements of 41% and 36%, respectively.

Margins improved to the point of allowing profits to soar 79% higher to $0.16 per American Depositary Share, before stock-based compensation expenses and currency-related hits. Analysts were expecting earnings to clock in at only $0.11 per ADS, even though they nailed the top-line gain.

The current quarter will be challenging, though. The company is looking to earn between $0.13 and $0.15 per ADS on $21.6 million to $22.9 million in revenue. That’s fine on the earnings front, since Wall Street was projecting profitability of $0.13 per ADS. But it’s not cool on the top line, where the potential of flat sequential growth flies in the face of the $24.1 million that analysts have been targeting.

The world understands the potential in China. Investors do, too. Our stock newsletters are ripe with recommendations in the region. Ctrip (Nasdaq: CTRP) is a Motley Fool Hidden Gems selection. Motley Fool Stock Advisor has picked SINA (Nasdaq: SINA) and TOM Online (Nasdaq: TOMO). The Motley Fool Rule Breakers newsletter service has singled out three China-based companies, including online-gaming leader NetEase (Nasdaq: NTES) and solar-power pioneer Suntech Power (NYSE: STP).

No, 51job hasn’t made the cut in any of our newsletters, but the after-hours slide, which drove the shares into the high teens, does pose some intriguing value-based possibilities. Now trading at 38 times this year’s earnings and 28 times next year’s profit potential, 51job isn’t a screaming value. But with an improving economy placing a greater value on landing quality hires, the company is at the right place at the right time. Risk-tolerant investors may also be feeling the same way.

The Chinese Online Recruitment Market is Estimated to be Worth 1.42 billion Yuan in 2006

11/08/2006 10:10:00

Research and Markets has announced the addition of China’s Online Recruitment Market in 2006 to their offering.

After the operation analysis of the four largest online recruitment webs of 51job, China HR, Zhaopin.com and CJOL, the report gives a comprehensive analysis of local online recruitment market and industrial online recruitment market. Online recruitment develops imbalanced in different regions: it is developing well in southern China, northern China, and eastern China; it has a great development potential in middle China; it is on the elementary step in the northeastern China and southwestern China while it develops relatively slow in the northwestern China. The development of online recruitment for different industries also has different prospects IT industry and manufacturing industry are the two largest industrial clients for online recruitment. The local online recruitment market and industrial online recruitment market are deserving more attention from the investors.

In China, with the development of the Internet, the recruitment methods are continuously changing. The online recruitment characteristics: no region and time limitation, wider range, high efficiency, fast, time-saving, low cost and others, make it become more and more popular to enterprises and applicants. With the market share continuously expanding, it is making steps into the mainstream recruitment ways. Currently, the online recruitment is enjoying a fast-growing period.

In 2004, online recruitment occupied 13.2% of the whole recruitment market, far lower than newspaper recruitment and on-spot job fair. In 2005, the online recruitment market grew sharply and shared 20% of the whole recruitment market. Its market share is estimated to be 28.2% and its market scale is estimated to be 1.42 billion Yuan in 2006 respectively. There’s still a large development space for China’s online recruitment compared with the quotient of 78% in America.

Market scale of China’s online recruitment market, 2002-2006 (Unit: 100 million RMB)

Since 2003, more and more Chinese enterprises began to enjoy the online recruitment service. Especially in 2004, 90% of the World top 500 enterprises in China enjoyed the online recruitment. Moreover, more than half of the high tech enterprises enjoyed the online recruitment service in 2005. The online recruitment gains more and more recognition thanks to its characteristics such as wide range, abundant information, great choices, high quality of applicants and low cost.

Apart from the enterprises, the online recruitment also receives more and more applicants’ preference. Many of them are well educated young people and surfing the internet frequently. In 2005, the number of China’s netizens reached 111 million, showing a great potential for online recruitment development.

According to the index of “per-million-people coverage”, the online recruitment websites of China HR and Zhaopin.com are far ahead of others; some local websites such as JOB168, JOBCN, 528JOB are also performing well;

Top 10 online recruitment website according to the index of “per-million-people coverage”,Jan 2006

Per-million-people coverage means the visitor per 1 million Alexa installation users on average.

After the operation analysis of the four largest online recruitment webs of 51job, China HR, Zhaopin.com and CJOL, the report gives a comprehensive analysis of local online recruitment market and industrial online recruitment market.

Online recruitment develops imbalanced in different regions: it is developing well in southern China, northern China, and eastern China; it has a great development potential in middle China; it is on the elementary step in the northeastern China and southwestern China while it develops relatively slow in the northwestern China.

The development of online recruitment for different industries also has different prospects IT industry and manufacturing industry are the two largest industrial clients for online recruitment. The local online recruitment market and industrial online recruitment market are deserving more attention from the investors.

Topics Covered
1 Overview of the online recruitment
2 Situation of China’s online recruitment market
3 Situation of the global recruitment market
4 China’s online recruitment market situation
5 Relationship among enterprises, individual and online recruitment
6 Market operation status of China’s some large online recruitment websites
7 Investment opportunity analysis of local online recruitment markets
8 Opportunity analysis of investing in industrial online recruitment market
9 Development trend of China’s online recruitment market

For more information visit www.researchandmarkets.com

Sourced from home.businesswire.com