Pay rises in major cities from 7% to 8.8%
Aug-29-2016 By : fcccadmin
Shanghai employees saw their salaries increase 6.7% on average in the first half of the year, but the raise was the lowest of all China’s first-tier cities, according to a survey. Pay rises in Shenzhen, Beijing and Guangzhou ranged from 7.1% to 8.8%, while the average level in second-tier cities was 7%, according to a survey by China International Intellectech (Shanghai) Corp (CIIC). It also said 64% of Shanghai companies had increased pay for all employees. “The cost of employing people in Shanghai is very high after decades of fast growth,” said the CIIC survey center’s Pang Limin. Across the country, average pay rises dropped to 7% from 8.7% in the same period last year. Pang attributed the downward trend to China’s slowing economy. Real estate replaced the internet industry at the top of the pay rise list with an increase of 8.6% following a surge in house prices. Pang said companies in Shanghai were entering a period of low pay rises as they had more mature human resources management systems with multiple staff incentives and flexible benefits, such as stock shares and allowances. “Employers in other cities are learning such practices but they depend more on salary adjustment at this moment,” she said. There were also more foreign ventures in Shanghai while Guangdong had more local private companies, which had the highest increase in the survey, the Shanghai Daily reports.
Huawei is now China’s top private enterprise
By : fcccadmin
Huawei Technologies has replaced Legend Holdings as China’s top private enterprise by revenue, according to the latest rankings by the All-China Federation of Industry and Commerce (ACFIC). Huawei rose to the top place with an annual revenue of CNY395 billion in 2015, according to the China Top 500 Private Enterprises 2016 list. Shenzhen-based Huawei was followed by Suning, a Nanjing-based home appliance retailer with annual earnings of CNY350.3 billion. Shandong Weiqiao Pioneering Group, an aluminum smelter, took the third spot with annual earnings of CNY333.2 billion in 2015. Legend Holdings, parent of the country’s largest PC maker Lenovo, dropped to the fourth spot, earning CNY309.8 billion in the year. The top 500 private companies were ranked according to their business revenue in 2015, with the lowest posting CNY10.2 billion, 7% higher than the previous year’s lowest place. The 500 posted combined business revenue of CNY16.2 trillion in 2015, up 10.2% on a year earlier, but the growth rate fell 1.2 percentage points from that of 2014. It was a sharp drop when compared with 2013’s growth rate of 24.9%. “Soaring labour costs, heavy taxes and charges, financing difficulties, inadequate market demand and irregular market orders were found to be the main obstacles to the top private enterprises,” the Federation said on its website. Private businesses were also faced with challenges such as emissions reduction and energy conservancy pressures, weak intellectual property rights (IPR) protection and difficulties entering sectors still dominated by state-owned enterprises (SOEs). Private sector investment growth slumped to a record low of 2.8% by the end of July, as corporates chose to hoard cash instead of invest it.
Two major building materials SOEs to merge
By : fcccadmin
Two state-owned building materials firms – China National Building Materials Group Corp (CNBM) and China National Materials Group Corp (Sinoma) – have started merger preparations in the latest move of SOE consolidation and shedding of cement industry overcapacity. Since their business overlapped in the cement sector, the reorganization will help the two enterprises reduce excess capacity and maintain their competitiveness. CNBM, headquartered in Beijing, is the world’s major non-metal materials manufacturer and cement equipment and engineering service provider, with total assets of more than CNY430 billion and 180,000 employees. It was ranked 327th on the Fortune 500 with revenue of USD31.7 billion in 2015, down 22% year-on-year. In the same period, it reported a net loss of USD142 million. Sinoma is also an industry leader in the non-metal materials industry, with total assets of more than CNY119 billion. Under the merger, a new building material giant will come into being, with total assets of nearly CNY570 billion.
Carlyle Group one of two bidders for McDonald’s China franchise
By : fcccadmin
U.S. private equity fund Carlyle Group may be one of the two final bidders left standing in a competitive auction process that will see the fund buy out U.S. fast food chain McDonald’s China franchise of 2,200 restaurants for more than USD2 billion. The deal comes as McDonald’s, which first expanded into China via an outlet opened in Shenzhen in 1990, announced in March it was looking to restructure its holdings in Asia. The fast food chain is seeking to reduce its physical ownership of restaurants in Asia, and would like to convert its strategy into an asset-light, franchise-focused model.The current sale will give the successful buyer a 20-year master franchise agreement, which comes with options to extend for 10 years upon expiry. Carlyle, along with one other unnamed multinational company, has outbid other interested U.S. and Chinese buyers in the preceding auction rounds. China Cinda Asset Management, Chinese food group Sanyuan, technology company Sanpower Group and local hotel operator GreenTree Management were among the companies invited to submit offers in the second round of the bidding process. McDonald’s current sale of its China franchise has come as Yum Brands, the company behind KFC and Pizza Hut, is also seeking to spin off its China business with an initial public offering (IPO). Yum’s Chief Executive Greg Creed said the move will give the brand greater stability in its earnings, the South China Morning Post reports.
COFCO to take full control of Nidera
By : fcccadmin
COFCO will buy out minority shareholders in the Netherlands-based commodity trader Nidera and take full ownership of the company. COFCO’s deal to buy out the remaining 49% of Nidera, which trades grains and soybeans among other agricultural commodities, comes two years after it bought just over half of the company for USD1.2 billion. It is the latest in several major overseas investments by Chinese firms seeking to meet rising demand for food and energy. The deal would give China greater control over pricing in the world’s grain markets, as well as better access to major grain-growing regions, such as Latin America and Russia. Financial terms of the new COFCO-Nidera deal, which awaits regulatory approval, were not disclosed. “This significantly accelerates the progress we have made in building a global leader in the international agricultural and food products industries,” Matt Jansen, CEO of COFCO International, said. Nidera’s strengths, including its seeds business and trading networks, will help the Chinese firm become “a global leader in the international agricultural and food products industries,” he said.
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