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Career development main reason for job-hopping

Career development and more room for personal growth are the primary reasons that Chinese change their jobs, global recruitment consultancy Robert Walters reported on Tuesday.

Eighty-one percent of the 400 Chinese respondents surveyed said they will change jobs in 2014. Of those, 47.1 percent said the reason was to seek more room for personal growth, while 20.2 percent of them sought promotions in new companies, according to the Robert Walters 2014 Global Salary Survey.

Salary increase, though not weighing as much now as in the past, is still a significant driver of job-hopping. People who stay in their current position can expect a salary increase of between 8 and 10 percent. But for those who change jobs, salaries can jump 15 to 25 percent.

Arthur Wang, managing director of Robert Walters China, said employers should help their employees to map out a clear career path. “If promises are not kept, employees will definitely leave the company,” he said.

Lenovo said to be eyeing IBM’s server unit

China’s Lenovo Group, the world’s largest personal computer vendor by shipment, said Tuesday that the company was in preliminary talks about a potential acquisition, which some insiders said would be International Business Machines Corp (IBM)’s server division.

A filing posted on the Hong Kong Stock Exchange on Tuesday showed that Yang Yuanqing, Lenovo’s chairman, refused to disclose detailed information of the third party as well as the deal.

“The company has not entered into any definitive agreement in relation to the potential acquisition,” Yang said.

Unnamed sources familiar with this matter was quoted by Reuters as saying that Lenovo has restarted negotiations of purchasing IBM’s low-end (X86) server business after the two failed to reach a deal in early 2013 due to their divergence on the cost.

According to media reports in May last year, IBM expects to offer the unit for sale for between $4 billion and $6 billion while Lenovo was only willing to put in $2.5 billion.

Lenovo refused to comment on the possible acquisition when reached by the Global Times on Tuesday. IBM did not reply to the Global Times’ e-mail inquiry by press time.

In pursuit of high profits, IBM is very likely to sell its lower-end server operation at a satisfactory price, largely because this segment has become increasingly mature, leaving little room for robust growth, Cao Yujie, director of consultants for Beijing-based IT market research agency CCW Research, told the Global Times Tuesday.

According to Morgan Stanley’s estimates as quoted by media reports Monday, IBM’s X86 server unit generated around $4.9 billion of the total $15.4 billion in its overall server business in 2012.

Data from the US IT research firm Gartner released in December indicated that in the third quarter of 2013, worldwide X86 servers saw low levels of growth at 2.1 percent year-on-year in shipments, with revenue rising 4.4 percent. The whole server revenue declined 2.1 percent year-on-year in the third quarter.

Despite the low margin, an acquisition of a server business run by market veterans like IBM would significantly boost Lenovo’s market share and enable it to stand out from domestic competitors as well as better compete with foreign peers, said Cao.

Lenovo bought IBM’s Thinkpad PC unit in 2005 for $1.75 billion, which helped it leap to the top of the worldwide PC market.

In the fourth quarter of 2013, the company accounted for 18.1 percent of worldwide PC shipments, ranking first, according to Gartner.

The company has already dipped its toe into the server market in an attempt to diversify its product range beyond PCs.

In early January 2013, it set up a joint venture with the US computer storage service provider EMC Corp to further develop its X86 server business.

However, it does not perform well in this sector due to its lack of advanced technology and brand recognition, Zhang Yi, CEO of Shenzhen-based Internet research firm iiMedia Research, told the Global Times Tuesday.

According to Gartner, Lenovo ranked seventh with a market share of 2.3 percent by worldwide server shipments in the third quarter of 2013, while HP topped the rankings with 26.9 percent and IBM was in third with 7.9 percent.

Zhang believed that Lenovo could win more customers if the acquisition of IBM’s low-end server unit can be finalized successfully.

But he was concerned that the deal may invite scrutiny from US authorities, as servers pose a more important security issue than PCs and handsets due to their being used by governments and enterprises for data storage and processing.

In October 2012, Huawei and ZTE, China’s two leading telecommunications equipment makers, faced charges by a US congressional panel of posing a national security threat to the US.

ZTE aims to sell 60m smartphones in 2014

ZTE Corp, China’s second-largest telecom equipment maker, said it aims to sell more than 60 million smartphones this year and to become the world’s third-largest smartphone vendor by 2016.

Zeng Xuezhong, ZTE’s executive vice-president, said the company sold more than 40 million smartphones last year and that it expects a significant increase in sales this year.

Zeng took the helm of ZTE’s terminal business 20 days ago, after the Shenzhen-based company announced a major restructuring move.

“The Chinese market will likely become a global focus this year and will probably see the fastest growth rate among all the markets,” Zeng said at a news briefing in Beijing on Monday.

He also said ZTE will launch affordable smartphones costing about 1,000 yuan ($165) per unit, in the Chinese market this year.

Demand for next-generation smartphones will surge in the near future, since Chinese telecom carriers are stepping up efforts to set up fourth-generation networks and offer 4G services, said Xiang Ligang, a Beijing-based telecom expert.

China Mobile Ltd – the world’s largest telecom operator by subscriber base – plans to buy about 100 million 4G smartphones from all of its handset partners this year.

Meanwhile, even though Apple Inc recently signed a multiyear agreement with China Mobile to sell its iPhone devices in the Chinese carrier’s stores, analysts said that Apple may only get a small share of China Mobile’s business.

“Apple’s iPhone handsets are too expensive for many Chinese customers,” Xiang said.

Domestic mobile phone players, such as ZTE andLenovo Group Ltd, are more capable of attracting low to mid-end 4G phone buyers, which account for the most important part of the Chinese market.

Ni Fei, head of ZTE’s Nubia smartphone unit, said in a recent interview with The Wall Street Journal that Apple surely will not eat all of China Mobile’s 4G cake.

“There will be big pieces for major Chinese vendors like ZTE,” Ni said.

ZTE launched the Nubia smartphone brand in 2012. The brand relies on online channels to distribute its products and targets high-end smartphone buyers.

Zeng said on Monday that ZTE fully supports Nubia’s development and expects the brand to see much faster growth this year.

He added that because the majority of smartphone users are people under age 35, ZTE said its mobile team should be led by young managers.

“More young people, mostly from the post-1980s generation, will emerge in the high-level management space of ZTE’s terminal sector,” Zeng said.

In addition, the company will pay more attention to mobile phone design, user interfaces and applications, instead of merely focusing on good hardware, he added.

On Monday, ZTE also said its net profit in 2013 ranged between 1.2 billion yuan and 1.5 billion yuan, after it recorded a net loss of 2.84 billion yuan in 2012.

ZTE said stringent controls over low-margin contracts, improved margins for global projects and cost-control measures helped it to improve its performance.

First-tier cities draw capital into offices

First-tier cities, led by Beijing and Shanghai, remain preferred sites for office investment in China despite rather low net yields, CBRE concluded after tracking 15 major Chinese cities.

Boasting stable returns with a low level of risk, underpinned by a well-developed market and resilient demand from foreign and domestic clients, first-tier cities rank higher in CBRE’s MarketScore system, a strategic framework to evaluate real estate investment potential according to their risks and returns.

The key challenge for most first-tier cities, however, is aggressive pricing as net yields for office investments in these cities range from 4 percent to 5 percent.

“As economic and social development varies significantly across different Chinese cities, it can be challenging for investors to choose where to invest and where to buy,” said Frank Chen, executive director and head of CBRE Research China. “The scoring exercise aims to identify the most attractive real estate market from an investor perspective, based on fundamental drivers.”

Beijing topped the MarketScore ranking due to its strong historical rental performance, low vacancy rate and limited future supply.

Shanghai was second due to a strong net take-up and the highest investment liquidity.

Wuhan was third although abundant future supply will curb rental growth in the near term, CBRE said.

Huawei’s revenue set to rise 10 pct annually over 5 years

Huawei Technologies expects revenue to grow 10 percent annually over the next five years as it taps the booming consumer, enterprise and software business as well as reap the benefits of its huge investment in research and development.

Its revenue in 2013 may hit 238-240 billion yuan (US$39.4-39.7 billion), a year-on-year growth of 8-9 percent, the Shenzhen-based company said yesterday.

Profit may reach 28.6-29.4 billion yuan last year, up 40 percent from the previous year, Chief Financial Officer Cathy Meng said in Beijing.

All the financial figures were unaudited.

Meng also predicted a 10 percent annual rise in Huawei’s revenue over the next five years.

The country’s No. 1 telecommunication equipment maker invested 33 billion yuan in research and development in 2013, up 9.6 percent from a year earlier.

It plans to invest US$600 million on 5G technology by 2016, according to Meng.

Huawei said in October that it planned to invest US$2 billion in Britain within five years.

In the global telecom equipment market, Huawei ranks second after Ericsson.

WB projects global economy to grow 3.2 pct in 2014

The global economy is estimated to expand at 3.2 percent this year from 2.4 percent in 2013, with growth picking up in developing countries and high-income economies, the World Bank said Tuesday.

But growth prospects remain vulnerable to U.S.tapering, the global lender said in its semi-annual Global Economic Prospects report.

The firming of growth in developing countries is being bolstered by an acceleration in high-income countries and continued strong growth in China, it said.

However, global growth outlook will be sensitive to headwinds from rising global interest rates and potential volatility in capital flows, as the U.S. Federal Reserve begins withdrawing its massive monetary stimulus, the report noted.

Growth in developing countries will pick up from 4.8 percent in 2013 to a slower-than-expected 5.3 percent this year, reflecting a cooling off of the unsustainable turbo-charged pre-crisis growth.

For high-income economies, the drag on growth from fiscal consolidation and policy uncertainty will ease, helping to boost economic growth from 1.3 percent in 2013 to 2.2 percent this year.

Among them, the recovery is most advanced in the United States, as it is projected to grow by 2.8 percent this year after expanding for ten quarters.

The Euro Area, after two years of contraction, is projected to grow by 1.1 percent this year board.

Expats in top demand for Chinese state-owned enterprises

There has been a significant increase in the demand for foreign professionals to represent Chinese state-owned enterprises abroad as the nation gears up its global commercial activities and plans listings of its domestic companies on international bourses.

Robert Parkinson, founder and CEO of RMG Selection, an international recruitment firm with offices in the China, says that the job market started picking up in the second half of 2013, and ended the year with strong indications of good hiring activity continuing into 2014 on the back of growing optimism and confidence. One the areas that is seen robust recruiting is for foreigners who can represent Chinese interests abroad, and have specific knowledge of capital markets and listings regimes.

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RMG recently published the results of a survey of the China job market, done in conjunction with academics from the University of Nottingham. The research report, 2013 China Talent-flow Survey Report 2, tracked several trends such as the rate of ‘job-hopping’ in various industries, including financial services and professional services.

Of the 4,000 participants in the survey, more than a quarter had changed jobs in the previous 12 months compared to about a fifth in the previous survey period (end 2012/early 2013). Parkinson says candidates demand – and get – increases varying from 20% to 50% each time they move.

Most of the ‘job-hopping’ activity was concentrated among candidates who earned 50,000 RMB (over US$8,000 per month), while the age demographic most likely to change jobs was the so-called “millennials” – candidates born in the early 1990s – with 43% reporting they had changed employer in 2013.

“Many Chinese graduates will take pretty much any job they can find because the job market is so competitive. But once they have settled, and a better offer comes along, they will move quickly.”

RMG is seeing a flood of ethnic Chinese to China – either nationals who have worked abroad moving home, or people with Chinese ancestry and family connections wanting to seek opportunities in what Parkinson described as a very ‘hot’ market.

But Chinese companies were also seeking out foreigners who could represent their interests abroad – especially people with a strong understanding of and experience in international capital markets – skills that many Chinese nationals currently lack due to the country’s historically closed economy.

But for expats, finding a job in China and even looking for another role when already working in the country is challenging. Many channels available to finance professionals in other parts of the world, such as company recruitment portals, job boards, newspaper listings, and internet sites are practically non-existent.

One of the reasons, says Parkinson, is cultural. “Candidates, especially senior people, regard it as beneath them to look for jobs – they expect employers and headhunters to come to them.”

This supports one of the key findings for the research: that using headhunters is still the preferred channel for Chinese companies to find candidates. In the recent survey, the researchers found that the percentage of Chinese companies using headhunters had increased from 35% to 57% in the past year.

Lenovo challenges Apple, Samsung

Yang Yuanqing was never afraid of declaring war on the strongest enemies.

After beating Hewlett-Packard Co to take the No 1 position in the global personal computer industry, Yang, the chairman and CEO of Lenovo Group Ltd, can’t wait to challenge Apple Inc and Samsung Electronics Co Ltd.

“Traditional PC vendors are no longer our top rivals nowadays,” said the engineer-turned-executive. “Our next step is to challenge Apple and Samsung in the portable consumer electronics sector.”

Over the past five years, Lenovo eroded other PC manufacturers’ market share bit by bit, reaching the top position in China first and then in the rest of the world. Yang is determined to copy this strategy on a new battleground.

The biggest campaigns Lenovo launched in 2013 were for its smartphone and tablet series.

The Beijing-based company invited basketball sensation Kobe Bryant and Hollywood star Ashton Kutcher to endorse its high-end smartphone and tablet products in a bid to lure young Chinese buyers.

The company came out with most of its flagship gadgets just before Apple unveiled its iPhone 5S and iPad Air devices.

Lenovo has sold 1 million Yoga-branded tablets since the product’s launch in October, according to Yang, who also plans to bring Lenovo’s consumer electronics to developed markets such as the United Kingdom and the United States.

The company sees the smartphone market as a stepping stone to enter other mobile consumer electronics markets because of its popularity in both emerging and developed markets.

According to a Gartner report, Lenovo was the world’s third-largest smartphone manufacturer in terms of market share as of the third quarter of 2013.

The company sold nearly 13 million smartphones around the world, taking more than 5 percent of global market share.

Yet the Chinese company still lags far behind Apple and Samsung in terms of shipments.

Asia-Pacific markets are poised to post huge increases in smartphone sales as more buyers abandon feature phones for lower-end smartphones.

“Consumers in China and Latin America are rushing to replace their old models with smartphones,” said Anshul Gupta, principal research analyst at Gartner.

About 48 percent of Chinese mobile phone owners will use a smartphone by the end of 2014, Forrester Research Inc estimated. The figure is expected to increase to 64 percent by 2017.

In China, Lenovo is the second-largest vendor after Samsung, according to local research firm Analysys International.

Among the 93 million smartphones sold in the third quarter, Lenovo controlled 11.4 percent of market share, while Samsung had 18.1 percent.

Liu Jun, vice-president of Lenovo, said the company is eyeing an even bigger market share outside China.

Lenovo sees the rise of emerging markets as a golden opportunity for its business in the post-PC era. It’s quickly expanding operations in Southeast Asian nations including Malaysia, Indonesia and Singapore.

Antonio Wang, associate director at industry consultancy IDC China, said that Lenovo’s advances were mostly made via overseas M&A deals at the beginning of 2013.

“The company was able to use its own research and successful marketing strategy in the mobile devices sector to create huge profits later on,” Wang said.

Yang, Lenovo’s CEO, recently announced the opening of a brand-new assembly plant in Wuhan, Hubei province.

Located in the southeast part of the city, the factory is the world’s largest manufacturing facility for Lenovo and a hub for the company’s mobile product line, Yang said.

It will build more than 30 million smartphones and tablets in 2014, representing 40 percent of the company’s total output in the mobile sector.

The plant will also recruit another 4,000 employees this year and will ship out more than 100 million mobile devices once put into full operation.

“We will largely rely on our own plants to feed global demand for mobile devices,” said Liu, Lenovo’s vice-president.

Unlike Apple, which outsources its production, Lenovo makes nearly 70 percent of its mobile devices itself.

“The company plans to turn the Wuhan plant into the world’s largest facility for developing, testing and manufacturing mobile devices,” Liu said.