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IC Consumption to Grow at 20 Percent Annually
(July 18, 2003) The Chinese mainland's demand for integrated circuit (IC)
technology is expected to grow at 20.3 percent annually between 2003 and 2005,
according to a report published Thursday by Global Sources Ltd.
The report is jointly published by two of the company's China-based electronics
publications, Electronic Engineering Times-China and Electronic Buyers'
News-China.
The report indicated that in 2003, the Chinese mainland's manufacturers will
likely consume 41.1 billion ICs valued at 30 billion US dollars and imported
technology is expected to account for 84 percent of the total volume of China's
IC demand in 2003.
Commenting on the report, publisher of Electronic Engineering Times-Asia and
Electronic Buyers' News-China Mark Saunderson said that China's business
potential for semiconductor vendors remain unparalleled.
The 143-page Electronics Industry Outlook: China examines 18 key product
segments within the communications, computer and consumer electronics
industries, detailing statistics on production, IC demand and imports.
The report also highlights current trends within China's IC design,
manufacturing, packaging, discrete and passive component manufacturing, and
distribution business.
It is reported that China's Ministry of Information Industry forecasts sales of
China's electronic products to increase 17 percent to reach 198 billion US
dollars in 2003.
Saunderson said the "market outlook remains extremely attractive for technology
vendors around the globe."
China's IC manufacturing sector consists of 10 key wafer manufacturers, 18 key
IC packaging firms and nearly 400 IC design houses. The number of IC design
houses is growing rapidly in China.
According to the report, China's domestic IC manufacturing sector is growing
very quickly, but it is in its initial stage.
The report said ICs designed by China's design houses are used in consumer
electronics products, telecommunications, networking equipment and data
communications, computer products, industrial control and automotive
electronics.
Global Sources serves a growing community of over 385,000 active buyers in over
230 countries and regions. It also has 17 specialized websites.
Sources: Xinhua News Agency
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HR service market: a big cake
(July 25, 2003) Headhunting companies grow fast, face bright future in China
Despite being quite a new phenomenon in China, the human resource (HR) service
market is developing rapidly. The first group of HR service companies, in the
1990s, were all foreign ventures brought by their key accounts to China.
Within a very short period of time, the HR service market began to show great
potential, and then great earnings.
Not only foreign ventures, but also local HR service companies face a booming
market. To use a popular Chinese saying to describe a market with great
potential, the HR market is quite a "big cake."
To understand the current needs and attitudes of foreign companies and joint
ventures (JVs) towards HR services in Shanghai, CBC Marketing Research initiated
a comprehensive study of HR service companies from a variety of sectors in
Shanghai, the most representative city in China, which has been named China's
Best Employer.
Like Shanghai, big cities have always attracted more foreign companies -- giant
corporations and small start-ups. They demand professional HR agencies to help
recruit ideal personnel and to build an HR system.
More than half of the firms interviewed during the survey were foreign-owned
limited companies (FOLs). Nearly one-third were joint ventures (JVs).
Some 63 percent of the respondents, from nine industries, employed more than
2,000 workers worldwide. One-third of the companies employed more than 500
people in China.
HR managers agonize over hiring the right person for C-level -- chief executive
officer and/or chief operating officer -- and manager and technical support
positions.
Headhunters are used more than any other HR service channel to recruit C-level
employees. More than one-third of the survey's respondents had not been involved
in C-level recruitment. Only 8 percent of the small companies often sought HR
agencies/headhunters' help in recruiting C-level personnel.
However, when it came to hiring managers and/or technical staff, companies, on
average, hired 3.6 new department managers per year. In addition, there was a
higher turnover of technical staff, about 14 positions per year, compared with
department managers.
Managerial staff was recruited primarily through postings on recruitment
websites and newspapers (29 percent and 21 percent, respectively).
An even larger number of technical workers was recruited in this way -- 39
percent and 27 percent, respectively.
Firms tended to prefer hiring based on staff/friends recommendations compared
with HR service companies recommendations.
From this information, we can see, although HR service companies showed
advantages in C-level recruitment, HR firms were weak in lower-level markets.
These could become the hottest competitive markets.
There are four major types of HR service companies in China's market: At 54
percent, foreign companies, defined as foreign HR service companies based in
China and foreign headhunters based locally, hold the greatest share of the
market. JV and local companies have equal shares.
No one HR service company dominates Shanghai's market, and respondents named
nearly 80 HR agencies/headhunters. 51job.com was most widely known, followed by
Zhaopin.com and FESCO. Three local Shanghai agencies also had name recognition.
China International Intelletech cooperation (CIIC), which has found C-level
recruits for 39 percent of the companies surveyed, and FESCO, which found staff
for 19 percent, were major market players.
Although plenty of small HR agencies/headhunters also compete for C- and M-level
recruits, CIIC and FESCO dominate managerial recruiting, with a combined 67
percent of Shanghai's total market share.
With so many choices for HR service providers, how can companies make a sound
choice?
Word of mouth and business visits were the primary deciding factors.
Also, HR managers indicated they valued efficiency and good communication
skills, but they were only "somewhat satisfied" with the performances of their
current HR agency/headhunter partners.
Data collected during the survey indicate the headhunter market is dynamic, but
characterized by a combination of low user loyalty and high potential for new
client cooperation.
About one-third of the respondents plan to change headhunters, and 41 percent of
the companies plan to use a headhunter in the near future.
HR service companies need a solid local foundation to succeed. As such, JV or
local headhunters enjoy advantages over foreign wholly owned headhunting firms.
In the near future, localization will be an inevitable trend in the market, and
competition will be steep.
Whether one company type eventually dominates the market, or whether all gain
equal share, remains to be seen.
Let's wait and see how this big cake get's divided.
Source: chinadaily.com.cn
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China to Further Relax Restrictions on Foreign Investors' Procurement
(July 31, 2003) It's learned from the 2003 Multinational Procurement and Trading
Fair (China Shanghai) which opened on July 29 that China is to execute a policy
which further relaxes the restrictions on foreign investors' export procurement
in China, permits foreign investors to set up solely funded export procurement
centers in some areas to engage in the business of procurement of China-made
products for export, and related matching services.
According to Vice Minister of Commerce Ma Xiuhong, the policy has been approved
by the State Council, and the Ministry of Commerce is formulating specific rules
for the implementation of this policy.
With the development of economic globalization and the widespread implementation
of management of supply chains, a rising number of multinationals are extending
their global procurement network to China, with the procurement scale growing
year by year. Sources say, there are mainly 5 channels in which multinationals
engage in export procurement businesses. But with the rapid expansion of their
business, those channels can no longer satisfy the demands. To permit foreign
investors to set up solely funded export procurement centers in some areas in
China means foreign investors may operate export businesses as legal persons,
and may enjoy export refund and relevant policies the way domestic Chinese
enterprises do.
Source: China Economic Information Network
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China's Money Supply Growth at High Level
(July 14, 2003) In the first half of this year, the growth of China's money
supply remained at a comparatively high level, according to a financial report
released on July 11 by the People's Bank of China (PBOC).
The report said the growth of cash in circulation (M2) and the narrowest measure
of money supply (M1) was about 10 percentage points higher than the growth of
gross domestic product and the consumer prices combined, indicating that money
supply growth was high.
It said that financial operation in the first half year featured fast growth of
money supply, loans, deposits and foreign exchange reserves.
Statistics show that by the end of last June, the outstanding broad money was
20.5 trillion yuan (about 2.48 trillion US dollars), up 20.8 percent from the
same period last year, whereas narrow money was 7.6 trillion yuan, up 20.2
percent.
Money in circulation was 1.7 trillion yuan, up 12.3 percent.
In the first half of this year, the outstanding amount of loans was 15.9
trillion yuan, up 22.9 percent from the same period last year, while deposits
were 20.7 trillion yuan, up 21.9 percent, of which corporate deposits were 6.7
trillion yuan, up 24.6 percent, and savings deposits were 9.8 trillion yuan, up
19.5 percent.
In the first six months of the year China's foreign exchange reserves increased
60.1 billion dollars to 346.5 billion dollars.
Sources: Xinhuanet
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State-owned Hospitals in China to Embrace Market
(July 31, 2003) More State-owned hospitals in China are to lose their government
support and will have to adapt to the market as the country's entire health
service undergoes inevitable reform, experts predicted.
The relevant departments under the State Council, such as the Ministry of Health
and the State Development and Reform Commission, are making investment plans
with huge budgets to improve the country's public health networks, according to
a three-day national working conference on health that ended on July 30 in
Beijing.
One of the main tasks in the coming years will be further development of the
health care system so that it can better prevent and control epidemics such as
SARS.
The newly added task is expected to bring new change to the system of providing
medical treatment, another side of the reform campaign, said Cai Renhua,
director of the China National Health Economics Institute.
One change to the medical system in China, a developing country that still can
only allocate limited funds to health care is that the various levels of
government should give up their ownership of and financial support to many
state-owned hospitals, Cai said.
While encouraging more hospitals to adopt market principles, governments at
various levels should also continue to own some high-level general hospitals,
infectious disease hospitals, medical academies, and hospitals of traditional
Chinese medicines, Cai said.
Currently, most of China's hospitals are state-owned and under pressure to make
major changes to lower their medicine prices and improve their efficiency and
services.
Sources: People's Daily
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