Post Covid-19 Job Market Opportunities in Singapore

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A SNEAK PEEK INTO THE FUTURE OF THE EMPLOYMENT MARKET IN SINGAPORE AND ITS NEARBY COUNTRIES; MUST HAVE SKILLS FOR YOUNG GRADUATES AND MID LEVEL MANAGERS

The future of work predictions for many businesses has arrived sooner than many expected. Most consulting firms like McKinsey and Deloitte already made projections towards the year 2030, and no one could have predicted with any level of certainty that a pandemic would restructure how work gets done. This post takes stock of the industries and companies that are likely to hire more in Singapore, the skills necessary for fresh graduates, how mid-level executives should approach reskilling, and what the future of the market holds for Singapore and other Asian countries with similar economic structures.

TOP HIRERS

A lot of businesses, companies, and industries have been affected by the Coronavirus pandemic. The labor market has not been spared from the harsh realities that the spread of COVID-19 has now ushered in. Many workers have lost and are still losing their jobs. Perhaps, a likely reason for how largely COVID-19 is affecting jobs in Singapore and neighbouring countries in the South Asia is as a result of these countries’ economic relations with China. CNBC, The Consumer News and Business Channel reports that Singapore is more vulnerable economically because her close trading partner, China, has not had it easy with the spread of the virus.

Already, the tourism and transports sectors are at its mortifying lowest ebb in Singapore and other countries of the world. People are not so likely to travel anymore and have been mandated either by government orders or a simple need to self-preserve, stay indoors, and to limit non-essential interactions to the barest minimum.

The government of Singapore, through its ministries have already taken steps to ensure that employees do not feel the full economic effect of the virus on businesses. As of 26 March 2020, the government set aside S$48.4 billion Resilience Budget to help businesses and households stay afloat while the pandemic persists. This is a Supplementary Budget that complements the Unity Budget presented on 18 February 2020.

Even with all of the government support, employees are still encouraged to look inwards and at the economy to find and create opportunities for themselves. Even as certain sectors have fallen apart as a result of the pandemic, there are businesses, companies, and industries that have recorded an increase in economic growth and market share. Employees should pitch their tents with these emerging winners from the global crisis. They are:

  • E-commerce

Statista reveals that 85% of Singapore’s population are avoiding crowded places. This means that stores, religious institutions, tourist centers, commercial hubs are simply in a flaccid state now. Even though establishments are not physically open, they have been able to conduct operations digitally. Statistics report that people in Singapore are spending more on online shopping. Therefore, large businesses with digital presence are getting bigger and will be looking at expanding their customer base. These stores will need more customer relations persons to handle their phone lines, more drivers to deliver products, and more content to engage their customers on social media.

  • Digital Media and Entertainment and Video Conferencing Services

Due to lockdown and social distancing measures, persons no longer have access to traditional means of entertainment. However, the demand for entertainment is sky-rocketing, thereby necessitating a shift to digital media. Social Media applications like WhatsApp, Facebook, and WeChat are recording increases in usage. As an example, Kantar Group, a reputable consulting firm, reports that Chinese social media apps like WeChat and Weibo are experiencing a 58% increase in usage.

The success of this social media applications has created job opportunities for content creators and digital marketers. Persons who are capable of creating compelling content and can help brands market their products digitally are being hired by businesses and companies to help them stay relevant.

  • Health and Wellness

Hospitals and pharmacies are swamped at the moment because there’s a surge in demand for medical services and pharmaceutical products. In the United States, huge pharmaceutical companies like Walgreens and CVS have opened about 70,000 new positions combined. Career websites in Singapore have openings for positions in pharmacies relating to data analysts, sales agents, sales promoters, and technicians, among others.

TOP NEEDED SKILLS FOR YOUNG GRADUATES

During challenging times , acquiring new skills is more relevant than self development for young graduates

A time like this is very instructive to perceptive fresh graduates. It underscores the importance of self-development to meet up with global trends. Developing skills is necessary to help graduates develop. Given the fact that the world is facing a different reality than one, it faced a couple of months back; newer skills are necessary to help young ones develop. Here are some of the skills a young graduate should possess:

  • Flexibility

Young graduates should learn to first adapt to current realities. The world is not as you want it to be. Or the way you think it should be. The world is the way it is. Therefore, learning as much as you can from other disciplines is a way to go in the future.

  • Tech Skills

Most businesses are beginning to discover that having a digital presence is essential. What has set successful businesses and failing businesses in the COVID era is their ability to leverage technology. Therefore, every organization is looking to get stronger as far as technological capacities go. Artificial Intelligence, Big Data, The Internet of Things, Augmented Reality are technologies that will only get accepted more in the future. It is time to get to learn about these technologies.

  • Data Analysis

Data is responsible for the success of many huge corporations today. Learning to analyze data to use it to help companies meet the needs of their clients is a valuable skill. Don’t sleep on it.

  • Critical Thinking

This simply means being informed. Young graduates will need to stay current as far as local and global affairs go. The market will favor those who can help companies in avoiding loopholes and helping them to stay strategically and globally relevant.

  • Digital and Coding skills

As companies are looking to transform digitally, the help of coders, programmers, and web developers will be needed. Coders are less likely to be out of jobs. Websites need them to run.

  • Emotional Intelligence

The ability to understand one’s emotions and those around him indicates a high EQ. Persons with high EQ are well balanced and productive individuals. Who does not want productive workers?

RESKILLING FOR MID LEVEL EXECUTIVES

McKinsey Global Institute estimates that as many as 375 million workers would have to acquire new skills or switch occupations. This indicates that all types of workers should start considering reskilling lest they get swept by the tide of change. The above skills identified for young graduates are just as crucial for mid-level executives if they want to remain relevant.

Customer relations, digital skills, coding, software programming, emotional intelligence, flexibility, digital marketing are skills all necessary to be globally relevant.

An important factor to consider when reskilling is identifying where the new destination is. An executive at a pharmaceutical company that is preparing to go digital must focus more on honing digital skills. He must start to pay attention to becoming aware of how these technologies work and what he might be able to contribute to help his organization use these technologies efficiently. Mid-level executives are suited for analyzing data as a result of their experience. They are better able to identify data that will get customers and clients closer.

Identify a new destination. Learn the skills necessary to succeed at this new destination. Set a period for getting these skills. Be relevant.

Workforce Singapore (WSG) is helping mid-level executives reskill and stay relevant in this difficult time. They have professional programs taught by career coaches to help persons gain these skills faster. Mycareersfuture (Singapore) also offers opportunities to persons in Singapore who are looking to start new jobs.

THE FUTURE WORKPLACE

Singapore is a developed country. By inference, the future of work in Singapore is consistent with globalization and big-tech bringing shifts in workplace culture. Artificial Intelligence is threatening to make complete automation a reality with the help of other technologies. Nonetheless, there is still one job too many for those who are willing to learn fast. A report by the World Economic Forum indicates that 75 million jobs may be displaced with complete automation but also that 133 million new jobs may also emerge.

The future has always been hard to ascertain. However, there are strong possibilities that should not be ignored. For instance, the concept of having traditional brick-and-mortar stores and offices seems to be overrated. Workers have been working remotely from home and have done so efficiently. It is expected that even after the virus, many companies will still choose to operate remotely.

Whatever the future brings, the workers who adapt will remain the most relevant. So, what to take away? Adapt.

—End—

Post Covid-19: How employers can maximize on recruitment opportunities in China

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Change is the only constant in China. This is rule number one when thinking to enter or do business with this market. But in the year 2020 change got renamed into COVID 19. No matter how big or small you are, you could not but surrender to the traumatic experience of doing business in the world of the pandemic. Markets shivered, stock exchanges stood in shock and the job market stared in fear. It was time for another change.

Was COVID-19 a game changer for businesses all over the world? Absolutely yes. Yet, no adversity ever comes without a hint of opportunity and potential gain. Even in this situation businesses, management, staff, and employees are called to grow and grow dramatically.

RECRUITMENT IN CHINA ON THE MOVE

With the world on a standstill hiring new employees can be quite a struggle. In big cities such as Shanghai, Beijing, Chongqing finding a competitive workforce can be challenging even in good times. But this doesn’t mean your business has to suffer, it only needs to evolve.

In picture: Chongqing city view. In big cities such as Shanghai, Beijing, Chongqing, finding a competitive workforce can be challenging even in good times.

By focusing on the downsides of the pandemic, we lose valuable options and realities the world has set in front of us. Recruitment in China is changing again and trying to figure out what the best practices are now. Can this time of post-COVID era, actually become a blessing for businesses and recruiting practices? Let’s take a look.

NO JOB FAIRS, NO PROBLEM

At this time of the year, employers would usually turn to the job fairs to find local talents. However, due to the pandemics, this practice is put on hold. At least offline. Luckily the magic of doing business in China, also means there has to be another solution to the problem. And the solution came fast. Job fairs shifted from offline to the online sphere and started a life of its own.  Benefits are multiple. First and foremost, your business is contributing to the prevention of spreading the virus by helping potential candidates to maintain social distance and avoid risk. Secondly, the costs of recruitment are significantly lower while at the same time the quality of the recruitment process is not jeopardized.

Furthermore, the government in China fully supports online hiring and motivates businesses to be less conservative when it comes to this option.

GOVERNMENTAL SUPPORT LOWERS COSTS OF HIRING

Good news for recruiters is the devotion of the government of China to mediate the consequences of the epidemics. They are ready to go the extra mile in the attempts to curb unemployment and prevent increase in the number of people who might be out of a job due to COVID-19. The goal of the Chinese government is to stabilize the job market in every possible way. Even if this means supporting nontraditional methods of recruiting such as online hiring platforms, or recognizing new job titles such as VR engineer or drone fixer.

In picture: People Assembly Hall in Chongqing. The Chinese government is taking strong counter cyclical measures such as extending grace periods, disbursing unemployment insurance, providing additional funds for the businesses at preferable conditions

At the same time, the government is taking strong counter cyclical measures, aiming to lower the survival pressure businesses face. Extending grace periods, disbursing unemployment insurance, providing additional funds for the businesses at preferable conditions, goes well in hand with new trends on the job market.

This is an opportunity to invest more in employees as the cost of hiring is going down. Comparing to the previous year when government policies increased labor costs per employee, this year and the post COVID era, brought a different picture. The government is trying to stimulate stabilizing the job market, by tax relief and lowering the social insurance costs. This is the opportunity to divert those means towards helping human capital to catch up with the changes. Investing more in the skills and flexibility of the employees is a necessary and wise approach in the challenging times.

OUT WITH THE OLD; IN WITH THE NEW

Post Covid-19, cost efficiency is a top company agenda

Adaptation is needed, and in the world of COVID-19, we are obliged to think rationally. This might even mean rethinking our established ways of doing business. When it comes to recruiting the time has come to think in a minimalistic way. Many businesses use this situation as a motive to reorganize the workload, cut extensive teams, or even lower the number of employees. For some, this will mean going online rather than having fixed in-office positions. Recruiting individual freelancers, contractors, or talents, will incur lower recruitment costs at no expense to the working quality. It is estimated that most of the businesses will not only go through reorganization but also that this reorganization will yield in new job openings, recognizing new demands and job definition and making both the company and the employees more flexible and resilient in the changing times.

GOING LOCAL

COVID-19 locked us down in one place, calling for finding solutions locally. This had also been the case with recruitment in China. We are called to look locally when looking for new talents or employees. In the time when hiring foreign employees and bringing then to China, has been virtually impossible, focus shifts to local job supply. This is a fantastic opportunity not only for the workforce but also for the recruiters because now they have to look for local talents to fill in open positions.

After the pandemic, Chinese companies are increasingly focusing on local talents search and reducing expatriates hiring

There has been extensive fear as to what is going to happen with estimated 600000 graduates who are entering the shaky job market in China. Their chances of finding suitable jobs in the time of business resizing and reorganization had been initially seen as meager. However, this might not have to be the case. As recruiters go online and are being stimulated to find local talents to fill in the demand this brings new chances for graduates looking to enter the job market.

OPPORTUNITY TO EVOLVE

In summary, though the situation is not easy for any participant on the job market, regardless of which side one is, supply and demand for quality workers will continue to exist and balance out in real life.

With enough flexibility and openness to thinking in new ways, businesses and recruiters can use the post-COVID era to reorganize their teams, find quality local talents and work hand in hand to make their companies more resilient to change. Sometimes the best policy can only be to bend with the wind and learn to adapt.

Recruiters and businesses need to work together closely to achieve win-win objectives, and to ensure that they are using every possible option to mediate the effects of the pandemics. Think flexible and think positive.

—End—

Images by Gerd Altmann from Pixabay

Tackling the challenges of C-suite recruitment

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Copyright © 2020 WiseNet Asia Pte Ltd.  All Rights Reserved

 

What are some barriers and biases in the hiring process for C-level executives, and have things changed over time? Here we explore some common factors faced by recruiters and how to overcome them.

Age, gender and looks are factors that still consciously and subconsciously impact the final decision in the hiring for C-level positions.  Leaders that carry themselves well and dress up appropriately conveys confidence, credibility and respect to other people.  People are more likely to trust the ‘professional’ looking individual as opposed to a sloppy looking individual, simply because they do not convey self-confidence and do not look trustworthy!

Leaders that carry themselves well and dress up appropriately conveys confidence, credibility and respect to other people.

C-suite roles have greatly evolved over the years, but one thing remains: leadership ability and a sound grip on business fundamentals are still highly sought after. However not all is merit-based, as other factors prone to human bias such as age, gender and appearance also make a huge impact on who gets the role.

Recruiters must be selective in approaching prospective candidates, as hiring parties have much to consider such as timing (the best candidates might not want to wait), profile (whether candidate has the required qualifications and experience) and compensation (the possibility of hiring someone less experienced for a lower sum).

Below are some factors that may affect hiring for C-level positions, including what both recruiters and candidates should be aware of.

Is age just a number?

While having solid experience is certainly valuable, candidates must also stay relevant to compete with younger talents who have similar levels of experience.

Sometimes, in a subconscious act of age discrimination, employers prefer hiring younger candidates because they associate certain qualities with youth. Such qualities may include tech-savviness, energy and stamina, general adaptability and expectation for lower remuneration.[1]

Of course, an older candidate can also embody all these qualities accompanied by years of work experience. To demonstrate this as a candidate, one should stay abreast of the latest developments and software in your specific industry, and keep your resume fresh by showing only experience from the last 10-15 years (nothing older than that unless it’s highly noteworthy).

All is not lost for mature candidates, particularly those in C level positions, as the number of older people continuing to work is expected to rise in the coming years and companies may well benefit from hiring senior candidates, as they can be more proficient at relating to clients and customers under an older demographic.[1] This group may also form the base of legacy customers for some companies, bringing value in terms of loyalty and maintained revenue.

Ultimately, being adaptable to change and staying relevant by keeping up with current trends are efforts to be made by individual candidates, regardless of age.

Does gender make a difference?

Are certain competencies tied to a specific gender? It appears not.

In terms of skill set, both male and female executives in the finance industry were found to have similar levels of competency, with women outperforming men (47% vs 39%) in financial expertise within emerging markets.[2]

According to the December 2019 S&P 500 list, women currently hold 31 (6.2%) CEO positions at these S&P 500 companies.[3] Globally, the percentage of women on boards has increased – from 17.9% in 2018 to 20% in 2019 – based on the MSCI All Country World Index (ACWI) published in 2019.[4]

However some countries still lag behind the global average, which in itself has much room for improvement by having more women in senior management positions.

While personal characteristics and motivations certainly influence real-life decision making, a psychological study found that although both genders were equally strong in terms of willpower, resilience and openness – men tend to have a higher willingness to take risks as compared to women.[5]

Besides personality, this aversion to risk may often be due to family considerations, which is something women tend to display more than men. This could also be due to societal expectations on women to be maternal and family-oriented, which may lead to some women taking a step back in their careers to focus on family.

At the same time, this should not colour the view of recruiters when hiring female candidates, because individual ambitions are vastly different – particularly within recent generations of women who are more educated, informed and independent.

Generalizing the expectations of a whole gender group would cripple the search for promising talents. The focus should be on merit and experience, discarding the lens of long-established gender biases.

Female executives at C-level, possessing their wealth of experience and business acumen, can further mentor younger and less-experienced candidates. Having women in management positions also serves to empower women in junior or managerial positions – demonstrating that this is a reality which is open to them – and that they have as much opportunity to achieve success as their male counterparts.

How much does appearance influence the outcome?

Is it shallow to judge someone based on their looks? Maybe, but it happens all the time.

“Beauty bias” is what makes us attracted to good-looking people, and physical appearance does impact a person’s job prospects and chances for promotion.[1] Looking well has helped people get ahead at work, enabled them to be more persuasive, boosted cooperation with colleagues and increased sale of products.

Obviously, this can lead to overt discrimination e.g. where an employer might prefer an attractive candidate to be the face of their brand, as opposed to a more qualified candidate who may not have the preferred looks.

To stay clear of this, here is a good practice to maintain: what always makes a difference for every candidate is to be well-groomed and professionally dressed. This conveys determination, attention to detail and respect for the task at hand.

Hiring companies can definitely expand their search by looking beyond their current pool of talent and getting rid of common biases. Just as candidates should constantly update their profile, hiring practices should also be updated every once in a while, to ensure the brightest leaders don’t slip through the cracks!

—End—

[1] Source: https://www.jobscan.co/blog/age-discrimination-older-applicants-vs-young-pretty-people/ 

[2] Source: https://www.shrm.org/hr-today/news/hr-magazine/0218/pages/hiring-in-the-age-of-ageism.aspx

[3] Source: https://www.straitstimes.com/business/companies-markets/more-women-directors-in-singapore-companies-but-number-still-lags-global

[4] Source: https://www.catalyst.org/research/women-ceos-of-the-sp-500/

[5] Source: https://www.straitstimes.com/business/companies-markets/more-women-directors-in-singapore-companies-but-number-still-lags-global

[6] Source: https://www.iomcworld.org/open-access/age-and-gender-influence-upon-selfreported-leadership-attributesduring-recruitment-2471-2701-1000140.pdf

[7] Source: https://www.glassdoor.com/blog/beauty-work-physical-appearance-impacts-job-search-careers/

How the Hong Kong economic turmoil is migrating businesses to Singapore

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Copyright © 2020 WiseNet Asia Pte Ltd.  All Rights Reserved

21 Jun 2020

The continued protest in Hong Kong has taken a rather uneventful turn with violence causing numerous deaths and injuries. A spin-off of this is the severe damage that has not just been caused to individuals alone, but also businesses. In October 2019, a news article by the South China Main Post indicated that Hong Kong’s economy lost at least HK$2.8 billion in a very short period. The sectors mostly hit by these protests in Honk Kong are the hospitality sector, the retail sector, and the transport sector.

The protest in Hong Kong started in 15 March 2019, triggered by the introduction of the Fugitive Offenders amendment bill by the Hong Kong government.

The Protests in Hong Kong; its effects on the economy

Since June 2019, the Hong Kong Protest has remained on global news. The turmoil created by protests in Hong Kong is only bested by news of the COVID-19 pandemic in recent times. The protest in Hong Kong started in March 2019 to speak against an extradition bill that created an extradition treaty with Hong Kong and China. The bill has since been withdrawn, and replaced with a national security bill in May 2020 that sparked further outrage and protests.

The aftermath of a riot near a train station

At the rate at which the protest in Hong Kong is impacting the economy, some business owners are looking to pivoting away from present-day Hong Kong to establish a base somewhere else. Geographically and politically, too, Hong Kong shares closeness to Malaysia, Thailand, Singapore, Taiwan, and some other countries. Likely, businesses looking to move a base of their operations somewhere else will most probably be considering any of those countries.

Why is Singapore the pick of the bunch?

A new American Chamber of Commerce in Singapore (AmCham) survey released on 12 Sep 2019 indicated that among those companies considering to relocate, 91% of Hong Kong businesses aim to move to Singapore.

Through the following reasons, this post looks at why Singapore is the best alternative base for affected businesses in Hong Kong. We also make brief statistical comparisons between Singapore and other South-East Asian jurisdictions like Malaysia and Thailand.

  1. Ease of Doing Business

The Ease of Doing Business Report is prepared by the most qualified persons at the World Bank Group. This report goes through extensive research and evaluation to come up with a list that identifies the best places to do businesses in the world. Not just in Asia. Questions relating to tax, procedures for establishment, investor protection, electricity, contract enforcements are all considered thoroughly to come up with this list.

Through an era spanning 2007-2016, Singapore topped the Ease of Doing Business rankings. For ten consecutive years, Singapore was simply the prime choice for doing business as far as countries go. The conditions in Singapore make it very conducive for businesses to start-up and thrive. In recent times, Singapore is now ranked second on the Doing Business Report, with New Zealand the only country faring better in this area.

One example that shows why you should establish your business in Singapore is the registration process for new businesses. In Singapore, the entire registration process takes only a day to complete. The process is also easily completed digitally. However, in countries like Malaysia, registration of a company takes around two to three days.

It is important to note that the Doing Business report indicates that Hong Kong is in the third spot on the Ease of Doing Business Index. This means that the business conditions in Hong Kong and Singapore are already similar. It also means that businesses that have started in Hong Kong would find the same efficient service in Singapore and have an even better experience due to the economic unease brought about by the protest in Hong Kong. This is unlike in Malaysia and Thailand, who rank 12th and 21st, respectively, on the Ease of Doing Business Index.

Singapore is already looking like the best option. But more reasons make Singapore the right place to establish your business.

Political Stability

Political stability is a key factor in driving foreign direct investments (FDI) into an economy. With the protest in Hong Kong dragging on for over a year now, Honk Kong’s economy is regressing, and it doesn’t look like the situation will change soon. Unlike Hong Kong, Singapore is currently stable politically.  This state of affairs offers much-needed security to business owners looking to move away from the troubled state in Hong Kong.

Attractive Tax Policies

Singapore’s tax rates are one of the lightest in South East Asia and the world at large. In the World Economic Forum’s Global Competitiveness Report 2018, Singapore ranked 11th, while Malaysia ranked 81st in the total tax rate.

Additionally, Singapore has the lowest corporate income tax rate in the world at 0% to 17%. Although Thailand has a corporate tax rate of 20%, which is also one of the lowest in the world, it is still not as low as Singapore’s. An instance of Singapore’s generosity with tax policies is that for the first three years of taxable income, non-resident corporations are exempted from taxes.

Singapore Corporate Tax Rates. Source: IRAS Singapore

Another initiative by the Singaporean government to help the situation of taxes is the Double Taxation Avoidance Agreements, which protects Singaporean suppliers from incurring taxes on profits made overseas while paying tax locally.

Further comparison between Singapore and Thailand tax systems reveals that businesses in Singapore have an easier time making tax payments and filing returns.  For instance, Singapore businesses make five tax payments a year and spend only 82 hours a year filing taxes. Thailand businesses, however, make 22 tax payments a year and spend 264 hours a year filing taxes.

Foreign Investment

The Ease of Doing Business Report states that the government of Singapore offers incentives for foreign businesses to help make international trade easier. Open trade policy is common in Singapore with few barriers to external trade transactions. In 2014, the Global Enabling Trade Report ranked Singapore first because of its friendly trade regulations. In the same 2014 report, Thailand was ranked fifty-seventh.

Singapore’s USD2.4t asset management industry is one of the biggest beneficiaries of Hong Kong’s money outflow

Moreover, Singapore is attractive to foreign investors because it’s geographical location allows easy access to mainland China. China is the biggest market in the world. Hong Kong businesses already know this, and these businesses will be looking to continue to have access to Chinese consumers. This segues into Singapore being a better choice.

Singapore is also strategically located. It is close to the emerging markets of India and China. Singapore also has the best maritime industry in the world with amazing port structures. These make the transfer of large cargo easy.

Parting thoughts

Over the past ten years, Singapore has been constantly rated by world experts as an amazing destination for businesses to thrive. Hong Kong has been a close competitor with Singapore within the same time frame. But, with the recent protest in Hong-Kong, it has become necessary for businesses to move if they wish to sustain in a more stable business environment.

Moving is always better when the new destination is as good as the old one. With Singapore, the new destination is even better. Singapore is not just the best option in South East Asia. It is the best option in the world. World experts have asked all the smart and technical questions businesses ask. The answer leads to just one destination that could serve as an eco-chamber for the blossoming of start-ups and businesses generally—Singapore.

If you’re looking to move, Malaysia and Thailand are good options, but Singapore is by far, the better of both, and the best as other southeastern Asian countries pale in comparison to what Singapore has to offer. For business owners looking to pivot their businesses for global dominance in a fiercely competitive global market, they must begin to ask the right question— “why cope when you can thrive?”

 

—End—

 

 

 

How to build a high-performance leadership team amid an ongoing pandemic crisis?

This article was originally published by ZhongWai Management Magazine

The characteristics of a high-performance team are like-mindedness and interdependence.

All industries have been hit to varying degrees by the COVID-19 pandemic.  For many entrepreneurs, the capability of leadership is crucial to business continuity.

With the ongoing threats from the pandemic, what are the most profound challenges for corporate leaders and entrepreneurs? What should they do and how can they make the team more resilient? In this regard, Wu Gang, Managing Director of Performance Consulting International (PCI) China, gave his answers when he participated in the “Managing the 100 Great Lectures”.

  1. Two profound challenges facing corporate leaders now

In today ’s turbulent environment, leaders are facing the same challenges, which have nothing to do with their industry. Among them, the first challenge is: “What is the mentality to face the crisis and turmoil?”

Facing an pandemic and other crisis, should leaders’ accept fear, be suspicious, or just trust themselves and their team? Should they bear it alone or choose to depend on each other in the company? These two different mindsets and choices will determine two different outcomes.  When leaders are afraid, the way ahead will be more difficult. Whereas the mentality of trust will enable leaders to see more opportunities and potential in the team.  Bearing everything alone, the pressure is huge, but when the leadership teams work interdependently, more possibilities will be uncovered.

The second deepest challenge for leaders is to figure out: “Why do we exist?” Most companies or organizations know what they are doing, such as the products they produce or the services they provide, while some companies or organizations do not know what they do or what they are doing in times of deepening crisis.  In this context, it is necessary for leaders to figure out “why they exist”.

A company’s mission, products, services, and business models are all clear, hence these things are changeable, and they only need to figure out the “why we exist” question.  Once this is clear, the mission and purpose of the entire enterprise also become very clear, and they will know what to do and how to do in the face of crisis.

So, knowing the two major challenges under the current crisis, what should corporate leaders do to continuously improve the enthusiasm and resilience of their organizations?

2. ‘Four steps’ to deal with the turmoil of the current crisis
The first step is to actively manage your mentality. An entrepreneur or leader working at this level is likely to be lonely because there are not many friends who can communicate and share their secrets. Coupled with short-term results and long-term performance pressure, all these lead to physical and mental exhaustion. Working long-term in high-pressure environments without relief will have a very adverse effect on health. Therefore, it is recommended to find an executive coach to help leaders face various pressures and jointly solve the challenges facing the current enterprise.

Working long-term in high-pressure environments without relief will have a very adverse effect on health

The second step is to solve the problem of enterprise survival. Here we need to ask ourselves “How do we sustain for the next 6 to 12 months in the current environment?” Once this is figured out, we will know what the bottom line of the company is, which is what they could bear. Knowing the company can persist for a long enough time, leaders will naturally become calmer and more stable.

The third step is to acknowledge the challenges facing the enterprise to the entire organization and leadership team, and invite the team to jointly explore future solutions. For example: “Under the current situation, it is necessary to carefully evaluate various risk situations and formulate counter measures to prepare us for a worse situation. At this point, I hope to hear more people’s thoughts and suggestions. “At this time, we need to exert the power of the team.

The fourth step, starting from the top, hold a conference on “Exploring the Road to the Future”. Use the “what if …” approach to creatively explore ways to deal with the future.

The first two prerequisites are you must manage your mentality and solve the survival problems of the enterprise before you have the opportunity to think about more things.

3. Four steps to explore the way forward

So, specifically, how to explore the road to the future?  There are also four steps here:

First, set company goals. Get everyone to think about how the company responds to the pandemic and how to respond to various business changes and challenges after the “resumption of business”, so as to set the target well.

Second, create an agreement for team work. Invite everyone to think about previous successful experience in similar situations, and write their ideas on the whiteboard or any visible places to ensure that the team stays aware. Sample agreements may include: courage, non-judgement, security, trust, etc. We must give everyone the mentality of mutual empowerment to do this.

Again, use brainstorming to produce ideas. Once the idea generation phase is completed, as a team, you need to discuss and review these ideas as a whole, decide which ideas can adopted, or if they should continue to explore more. The company is not a leader in a single word, as an executive team or a core team, they need to explore the future path together.

Through brainstorming, fully capture team ideas and lead everyone to discuss

Finally, develop an action plan. Be clear on details such as the task owner, target completion time, and how the team or the leader himself (CEO) understands the key progress and status.

4.  On the verge of using the crisis to create a high-performance team

When we know the two major challenges faced by current entrepreneurs, and how to improve the enthusiasm and resilience of the organization, it is then very important to build a high-performance team amid the crisis.

In fact, there are two elements that drive high performance. One is that the team or organization has a mission and dream. The individual’s mission and values are connected to the team or organization. The other is that the leader can establish a team to monitor the current performance.

Many leaders are conscious, but it is difficult to start something from themselves. It is also impossible to expect the team to work hard independently. Everyone should be made aware that work is a life skill.

The characteristics of a truly high-performance team are having the same goals, like mindedness and interdependence. “Interdependence” is the complimentary team members’ skills and responsibilities.The first step in creating a high-performance team is to create a team work agreement. The work agreement refers to the rules that the team members should follow when working together before starting work. Only by communicating well in advance can we ensure the maximum efficiency of teamwork. Problems can also be solved quickly.

There are five steps to creating a team work agreement:
i) Leader questions. For example: “In the future, how should we work together?” “What are the events that will affect our work rhythm? What are the mentalities that we should adopt in facing the challenges?” Etc.

ii) Through brainstorming, fully capture team ideas and lead everyone to discuss. “Which of these are applicable only to individuals? Which are applicable to the entire team?” “Which are necessary but not yet involved?” Here we want to allow everyone to express their opinions.

iii) Leaders supplement their requirements. “This are some of my ideas. Let’s take a look. Where do we need clarifications and where do we need revisions?”; “This agreement is an agreement that we all abide by, so please be sure to put forward the ideas in your heart”.  This is where the leader needs to invite everyone to put forward their own requirements with the mentality to explore more together.

iv) The teams’ discussion forms the final text, which is then officially released. “How do we fully implement this agreement? If these agreements are damaged, how should we respond and deal with them?” After the agreement is determined, how to implement it is very important.

v) Review regularly. “Where do we do well in our agreement? Which ones can be better?”; “How have we done to ensure that the agreement is followed by everyone?”. The agreement will change, because people and situations will change, therefore it should be reviewed regularly and adjusted on-time quickly.

In short, the leader first needs to ask questions, and then the leader guides everyone to express their ideas, allowing everyone to fully participate in the discussion, then the leader puts forward his own requirements by asking for opinions, and finally the team forms a final agreement and which will be officially released and implemented.  After being publicly released, it must be reviewed regularly so that there can be continuous revisions and improvements.

It should be noted that a working agreement can only make a difference  when it is established through full participation of the entire team, and with the mechanism of independent decision-making, as opposed to the kind of agreement made from top to bottom. As a leader, you may have questions: “What if my requirements are different from those of the team?” Here, the leader is required to adjust his mindset. That is to choose to trust his team and just be like-minded, it is only then that everyone can rely on each other.

—End—

 

 

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JOINT NEWS RELEASE: NTU Singapore partners WiseNet Asia and Yubei District People’s Government to offer tech internships amid tough job market

SINGAPORE, 13 May 2020 – To support undergraduates seeking internships in an uncertain market amid the COVID-19 pandemic, Nanyang Technological University, Singapore (NTU Singapore) is partnering human resources consultancy WiseNet Asia, and the Chongqing Yubei District People’s Government (YDPG) to offer internship opportunities in areas such as big data and artificial intelligence (AI).

These internship and employment opportunities, found primarily in the Yubei District, a burgeoning tech and innovation hub in Chongqing, China, will be open to NTU Singapore students across all disciplines. The Yubei District is home to the Xiantao International Big Data Valley, where more than 700 companies have set up offices, including big names such as Microsoft and Qualcomm.

NTU Deputy President and Provost Professor Ling San, WiseNet Asia Consulting Director Mr Diron Chua, and Communist Party of China Yubei District Committee Vice Secretary Mr Tan Qing inked the agreement yesterday at the fifth Joint Implementation Committee Meeting for the China-Singapore (Chongqing) Demonstration Initiative on Strategic Connectivity, at The Treasury building, Singapore. Mr Tan, who is also the Chief Executive of YDPG, signed the agreement remotely via video conferencing.

Joining them at the event were Minister for Trade and Industry Chan Chun Sing, Minister for Manpower and Second Minister for Home Affairs Josephine Teo. Chongqing Party Secretary Chen Min’er, and Chongqing Mayor Tang Liangzhi witnessed the signing through video conferencing.

(Back row from left to right): Josephine Teo, Second Minister for Home Affairs; Chan Chun Sing, Minister for Trade and Industry. (Front row from far right): Diron Chua, Director, WiseNet Asia; Professor Ling San, Nanyang Technological University

The collaboration seeks to leverage each party’s strengths, experience, and capabilities in order to facilitate increased collaboration in talent development and mobility between Chongqing, China and Singapore.

Prof Ling San said: “During this period of unprecedented challenges, it is even more crucial to give our students a competitive edge in securing employment. The internship opportunities that arise from NTU’s collaboration with WiseNet and the Chongqing Yubei District People’s Government will allow our students to experience the vibrancy and agility of the tech companies in Chongqing, and build up expertise in fast-growing fields such as big data and AI. Students may even get full-time employment opportunities arising from this collaboration. It will also give our students an opportunity to understand our region better, so that they are well-prepared to thrive in other countries and cultures, including in Asia.”

Mr Wesley Hui, Director of WiseNet Asia, said: “We are excited to be working together with NTU Singapore and Chongqing Yubei District People’s Government in talent development. Talents are a constant priority in companies of any size. When young workers are groomed from the start of their career, they are conditioned with the right mindsets, values and the tenacity to withstand tough challenges. These are the soft factors that make up successful leaders.”

Internships to start second half of 2020

The placements that are expected to start in the second half of this year will see NTU students being offered internship opportunities in the Yubei District, as well as industry networking opportunities, with the help of YDPG and WiseNet.

In addition to being given an allowance, students who are successfully recruited as interns will have their visas, accommodation and meals taken care of.

WiseNet will coordinate with companies on the selection and placement of potential interns, while YPDG will take care of the students’ visas, accommodation and meals for up to six months.

As part of the agreement, NTU will contribute to the human capital development of executives in Chongqing through its postgraduate programmes and executive courses.

 

***END***

Back row from left to right: Josephine Teo, Second Minister for Home Affairs; Chan Chun Sing, Minister for Trade and Industry
Front row from far right: Diron Chua, Director, WiseNet Asia; Professor Ling San, Nanyang Technological University (NTU)

Media contacts:

Foo Jie Ying
Manager, Corporate Communications Office
Nanyang Technological University
Tel: 6790 6681; Mobile: 9117 5023
Email: jieying@ntu.edu.sg

Regine Chin
GM, Marketing
WiseNet Asia
+65 6337 2231
regine.chin@wisenetasia.com

About Nanyang Technological University, Singapore

A research-intensive public university, Nanyang Technological University, Singapore (NTU Singapore) has 33,000 undergraduate and postgraduate students in the Engineering, Business, Science, Humanities, Arts, & Social Sciences, and Graduate colleges. It also has a medical school, the Lee Kong Chian School of Medicine, set up jointly with Imperial College London.

NTU is also home to world-class autonomous institutes – the National Institute of Education, S Rajaratnam School of International Studies, Earth Observatory of Singapore, and Singapore Centre for Environmental Life Sciences Engineering – and various leading research centres such as the Nanyang Environment & Water Research Institute (NEWRI) and Energy Research Institute @ NTU (ERI@N).

Ranked 11th in the world, NTU has been placed the world’s top young university for the past six years. The University’s main campus is frequently listed among the Top 15 most beautiful university campuses in the world and it has 57 Green Mark-certified (equivalent to LEED-certified) building projects, of which 95% are certified Green Mark Platinum. Apart from its main campus, NTU also has a campus in Singapore’s healthcare district.

For more information, visit www.ntu.edu.sg.

 

About WiseNet Asia Pte Ltd

WiseNet Asia Pte Ltd is a regional integrated Human Resources services provider and consulting firm headquartered in Singapore.  WiseNet Asia’s HR solutions consist of talent acquisition, talent transition, talent development and HR outsourcing.  WiseNet Asia’s core value is to accelerate human resources development through innovative HR models and knowledge sharing. For more information, visit http://WiseNetAsia.com/

 


Related News

Ministry of Trade and Industry Singapore:   https://www.mti.gov.sg/Newsroom/Press-Releases/2020/05/5th-CCI-JIC-Meeting-12-May-2020

Nanyang Technological University, Singapore (NTU Singapore):  https://media.ntu.edu.sg/NewsReleases/Pages/newsdetail.aspx?news=0c56dfe2-2ef2-434c-925b-c3d38194955b

 

 

 

 

 

 

Are you a mid-career manager? Improve your personal finances with this checklist

WiseNetAsia Knowledge Center
Copyright © 2020 WiseNet Asia Pte Ltd.  All Rights Reserved

Our financial goals change as we pass through different stages in life. This article is targeted at managers in the middle of their career (i.e. those who have been in managerial roles for several years) as a guide to plan your finances for the next decade, up until retirement.

As a mid-career professional, you are probably building your family and lifestyle while enjoying the benefit of a higher income. You also have about a decade or so until your retirement. Now is a great time to check whether you are on track financially in planning for your future.

You may spend a fair amount of time and energy contemplating your next car purchase or next vacation, so why not make time to assess your financial health as this will have a long-term impact on you and your family?

Although planning for retirement may sound like a daunting exercise, you can use this checklist to break down what needs to be done and guide yourself to a happy and comfortable future:

Be honest about your spending habits

Are you taking up more high-interest loans than is wise? Whether it’s a new car or another house, these big-ticket purchases have a huge impact on your finances. Are you truly comfortable with servicing these loans for several years? If yes, wonderful! If not, it is perhaps better to pass on these purchases so that you don’t take on more debt that you already have. The less you owe, the less you stress.

Beware the status game, i.e. making flashy purchases to impress your peers. This is a dangerous game that never arrives at a point of satisfaction, and can potentially bring you close to bankruptcy if done on the regular.

Visualise your retirement

Chart your retirement plans. How would you want to live? This gives you an idea of how much you should set aside to meet your vision, and you can adjust this along the way.

Doing this may involve thinking about the area you want to live in (e.g. you may want to move somewhere with a lower cost of living), gradually setting in place the environment you want to have or reducing obligations to enjoy more freedom.

Don’t underestimate the compound effect

Are you maxing out your pension plans? Dipping into your pension fund today and spending this ‘quick cash’ will reduce the total amount of funds you have available in your golden years. Setting aside even a small amount now on a monthly basis can grow into a surprisingly substantial sum twenty years down the road!

Invest wisely and realistically

Have you been making investments based on your risk appetite and personal expectations on returns in the long-run? Don’t be ashamed if you’re not the boldest investor and do not subscribe to the get-rich-quick schemes by some people out there.

If you are cautious by nature, think of it this way: how much money or assets are you OK with losing? Do not invest beyond that amount, so that you always have a rational idea of the living standards you can maintain and future plans you have under your control.

Embrace financial security by:

  • Understanding the risk vs return on your portfolios.
    • What are the possible risks?  What are the worst case scenarios in each type of risk, and is the level of return justifiable?
  • Adopting rational planning and strategy instead of relying on emotions.
    • Are your decisions rational based on your current situation?  Are you making an emotional investment decision?

Research thoroughly

The more knowledge you have in an investment tool, or on a company that you are investing in, the lesser your risk will be.  Knowledge helps to mitigate risks and enables better decision making.  Some research information to look out for:

  • Management team
  • Review past performance and current performance.  Study the factors that contribute to exceptionally good performance or a sudden drop in performance
  • Read all the financial documents, these include quarterly reports, annual reports, investors presentations
  • Study industry trends
  • Read expert opinions and public reviews

Consult a professional

If all the above feels complex or a handful, or if you lack the time to sit down on your own and figure this out, consult a financial planning professional. S/he can help you see the bigger picture, make well-defined and realistic plans, plus help you stay on track to meet your goals. You might also gain fresh knowledge on personal finance in general, which can equip you to make decisions more easily on your own.

You have worked so hard to establish your career, achieve your current lifestyle and keep your family happy. Now that you have these milestones behind you, get started on planning for a comfortable retirement!

Will China Lose it’s ‘World Factory’ Status with Shrinking Global Demand Threatened by the Coronavirus Pandemic?

This article was originally published by 中信出版集团 (ID:  citicpub)

A sudden pandemic and it’s continuous changes have evolved into a global public crisis. In addition to the capital market, which has been deeply affected, there is also an industry that has also experienced considerable fluctuations in this pandemic. It is — China’s manufacturing industry.

In this crisis, we are seeing two extreme sides of the Chinese manufacturing scenes.  On one hand, the manufacturing industry is showing the speed of China and the superb efficiency where an automobile factory turned into a mask factory.  On the other hand, massive delay in production leads to the departure of foreign funded factories and rising costs.   Also the uncertainties in production schedules has resulted in loss of orders.

According to reports, although the work resumption rate in Yangtze River Delta and Pearl River Delta has reached more than 90%, there is very little real work, especially for export-oriented industries, which are hardly receiving orders due to foreign pandemic conditions.

If there is a word that can describe the current situation of China’s manufacturing industry, it is ‘pressure’, and a tremendous amount of pressure!

But in times of trouble, there are opportunities.

How does a car factory turn into a mask factory in just 76 hours?

Due to the escalating pandemic spread, masks became a tight supply commodity. To meet the large demand for supply, many factories turned into mask factories. Automotive maker SAIC Wuling, not only manufactures the Wuling brand masks, but also goes one step further and invented mask production machines.

Automaker Wuling turn it’s auto factory into mask making factory to help ease a tight demand in market supply

Wuling brand mask packaging with the wordings ‘Whatever the people needs, Wuling will produce.’

Why are the car factories, diaper factories, mobile phone foundries, shoe factories, which are all seemingly unrelated yet are all able to switch to mask factories in just a few days?

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Wu Ling brand mask

Before answering this question, let’s look at a small example.

Prior to the pandemic, global mask production was 40 million, of which 20 million were produced in China, 10 million in South Korea, 5 million in Japan, and 5 million in other countries.

When the pandemic hit China, most factories were shut down due to the Spring Festival. Faced with a surge in demand, mask factories in South Korea and Japan should accelerate the production of masks, but in fact, the production of masks in Korea and Japan was also late. Why is that so?

This is because almost all the nasal bridge strips required for masks in the world are produced in the PRD region of China. Without a nasal bridge strip, a complete mask cannot be produced at all.

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Above: the nose bridge strip is almost only produced in China

There may be questions such as the since the nose bridge is such a simple accessory in the mask, therefore why can’t South Korea and Japan produce this?

But this is not the case, the reason is that the nose bridge strip is too simple and cheap.

Well, the logic behind doing business is to either sell at a high price to make a profit, or to take a small profit and sell more. The nose bridge strip is obviously the latter. And when it comes to volume, it depends on the market size. Which country in the world can scale with the Chinese market?

Therefore, Chinese nose bridge manufacturers can keep the prices extremely low and the market competitiveness is strong. Japan and South Korea can’t make money making nose bridge strips, and naturally they won’t do it.

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China ’s super-large scale has created a strong cost control capability, with a “cost black hole” effect, that is, those extremely basic parts may not be available in other countries, but it will certainly be available in China, and it is also the cheapest!

Masks, in many people’s perceptions, are products with little technical involvements, but the production of a mask ranges from the most upstream oil, to the separated polypropylene, spunbond, melt blown cloth, to the bridge of the nose and ear bands, to the sterilization rooms.  There are dozens of industrial chains involved in the process of making a mask.  Additionally, they need the support of logistics, plant, power and other infrastructure.

Behind a small mask is a huge modern industrial system. From upstream to downstream of mask production, this supply chain is complete in China.

On 2nd March 20202, the China News Network published a piece of news which says mask production in China broke it’s own record with 1 billion pieces produced per day.

Why, during the epidemic, almost any manufacturer can be transformed into a mask factory overnight, making the production capacity of masks soar in a short time to more than 100 million per day?

Speculations of a shift in China’s manufacturing industry, is this a false proposition?

Discussions about China’s manufacturing shift have been ongoing. For example, Samsung closed its Chinese factory and moved to Vietnam, Apple built a US $ 1 billion factory in India.  With media reports of similar news, it seems that many multinational companies are gradually shifting their supply chains from China to Southeast Asia.

After the pandemic, more and more voices are beginning to worry that China will lose its “world factory” status and companies will accelerate the relocation of factories overseas.

The U.S. Secretary of Commerce even said that the Chinese pandemic would help manufacturing return to the United States.

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So, in recent years, has China’s manufacturing industry migrated overseas (Southeast Asia, especially Vietnam or India) on a large scale? Is the status of Made in China no longer guaranteed?

In order to clarify these issues, in 2019, Mr Shi Zhan, Director of the Center for World Political Studies and the author of “Overflow” and “Pivot”, and his team conducted an in-depth research on Vietnam, visited local industrial parks, the Chinese Chamber of Commerce, and visited the local entrepreneurs, grassroots officials, scholars and also consulted Vietnamese economists.

From the perspective of Shi Zhan, the transfer of China’s manufacturing industry is actually a pseudo-proposition. Some manufacturers build their factories in South East Asia because of expansion and not a shift of business from China.

First of all, it must be acknowledged that a certain amount of production capacity has indeed gone to other countries. However, the transfer of this small number of factories did not begin in the last two years, nor did it begin during the pandemic period. In fact, this happened much earlier.

Because many upstream brands do not want to rely too much on a single factory, in simple terms, they don’t want to put all eggs in one basket. For manufacturers, this transfer is part of a long-term and reasonable strategy to increase efficiency and reduce risks.

After this pandemic, more foreign companies may want to averse the risk of focusing production solely in China, hence it is practical to spread production or related operations over multiple countries.

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Foxconn’s factory in India

This is a realistic problem that the Chinese manufacturing industry will face, but the impact may not be very significant because what can be transferred out are the first and second-tier contractors.  Operations that are further down the supply chain will be harder to transfer out.  Lower operations in the supply chain are more specialized and more dependent on the collaborative needs in the supply chain network.  They cannot be moved out unless the entire network is transferred out altogether.

Are there countries that can take over the entire network from China? In recent years, there has been a sudden rise of various manufacturing hubs across South East Asia. What about Vietnam?

In the first quarter of 2019, US imports from Vietnam soared 40% year-on-year, while Vietnam’s GDP grew by 7.9%.

In addition, Vietnam has ample population, cheap labor, ports, and low tariffs. It seems to be a good place to build factories and trade.

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But if we look deeper, we will find that Vietnam is still China’s largest import market. This means that most of the “Made in Vietnam” raw materials are not produced locally, but shipped from China.

For example, when producing a sofa in Vietnam, 90% of the leather material comes from Jiangsu, 80% of the sponge comes from China; more than 90% of the plywood used in the production of furniture comes from Linyi, Shandong; 60% of the hardware supporting the furniture comes from China, which are imported and processed into hardware locally in Vietnam.

Due to the inability of the Vietnamese industrial chain to be self-sufficient, during the pandemic period, most of the factory’s stocks of auxiliary materials were only enough for production in January. Previously, due to insufficient raw material inventory, 16,200 factories in Vietnam had suspended operations.

So why doesn’t Vietnam produce raw materials itself?

This is because it does not have heavy industry systems such as metallurgy, steel, chemicals, materials, and energy production. The heavy industry system consists of high investment, low profits, and a very long payback period. It is difficult to develop without the government massive capital investment and support.

From a micro perspective, Vietnam’s labor market is also very different from China’s.

The Chinese have become accustomed to large-scale population migration, and a large number of migrant workers have come to work in coastal areas from inland provinces. Vietnamese people are generally used to looking for work near their hometown, and not many people will move across to other provinces to work. In addition, compared to Chinese, Vietnamese are not very aggressive in the pursuit of career advancements.

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Samsung factory in Vietnam

Although Vietnam has a sufficient labour supply, human resources are still a problem due to the lack of high-quality workers.  Also, the productivity of Vietnamese workers are too low .

Although manufacturing seems to be prevailing, Vietnam has a huge gap with China in terms of population, economy, high-quality infrastructure, the scale of outstanding engineers, and the scale of qualified college students and skilled workers produced each year.

Some companies have moved back to China because of the poor quality and production efficiency of Vietnamese workers.

When asked “Is Vietnam likely to replace China’s World Factory status?”

Felix, Dean of the Institute of Economics and Policy of Hanoi, Vietnam, responded firmly:

“This is impossible! Vietnam is too small. The best we can do is to find Vietnam’s comparative advantage in our economic ties with China, embed ourselves in a suitable position, and take advantage of China’s tailwinds. “

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Therefore, the prosperity of Vietnam’s manufacturing industry is not driven by the outward migration of China’s manufacturing industry, but the external diffusion of China’s manufacturing industry, or “overflow”.

That is, China “outsourced” some of the assembly links in the supply chain to Vietnam, leaving domestic space to industries with higher added value.

The unparalleled supply chain system that supports China’s manufacturing industry

When it comes to China’s supply chain or industry chain, it’s actually not a chain, it would be more accurately referred to as a network. Only by truly understanding this network then can we understand Made in China.

The network, as its name implies, is a large network with multiple “nodes” that intertwined.

The strength of China’s supply chain network is not only due to its large scale, full range and fast logistics, but also because of many outstanding supplier companies in China, which can produce extremely high-quality parts and semi-finished products at lower costs.  These “intermediate products” are not only sufficient in China, they can also be exported to the world.

Today, more than 70% of global trade is semi-finished parts.

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In China, there are many small towns that we may not have heard of, but each are expert producers in certain fields.

These small towns are often the production bases of a certain product or an industry in the country or even the world. They are all nodes on the Chinese supply chain network. Thousands of nodes are linked together, forming a network like Lego blocks, and supporting the huge network of China’s supply chain.

  • Nearly 1/3 of the world’s guitars are produced in Weifang City, Shandong Province
  • Nearly one-third of the world’s and almost half of the country’s swimwear are from Xingcheng, Huludao City, Liaoning Province;
  • 1/3 of the national badminton and supplies to the world are produced in Jiangshan City, Quzhou, Zhejiang Province;
  • More than 85% of the country’s steel tape and more than half of the world’s steel tape measure are produced in Shaogang Town, Yucheng County, Shangqiu City, Henan Province;
  • More than 70% of the national and more than 40% of the world’s decorative oil paintings are produced in Shenzhen Dafen Oil Painting Village;
  • 70% of the world’s lighters are produced in Shaodong City, Hunan Province

The list can go on, there are too many things beyond our imagination.

Maybe you will doubt that these are low-tech products which are nothing great. But if you think about it, you can buy a 5 meter long steel tape measure for 3 or 4 yuan on Taobao. After removing the profit of each link, the production cost of the steel tape measure generally does not exceed 1 yuan.

The production of steel tape measure does not have any technical element to it, but the ability to control costs is not due to the “low technology” factor. The production of steel tape has a complete and mature supply chain system behind it, with an extremely powerful upstream and downstream supporting capabilities.  Thus, every step can be meticulously divided and interlinked to make the finished products

Without this supply chain system, steel tape measure can still be produced, but the cost cannot be controlled so low.

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Although now China’s labor and land costs are no longer so advantageous, these industries still have strong cost control capabilities.

In China, Apple’s supply chain is almost within a 24-hours driving distance; however, many parts of Foxconn’s factory in India still depend on shipments from China thousands of kilometres away. Therefore, although Foxconn is actively building factories overseas, 75% of its production capacity is still in the Mainland.  This strong competitiveness reflects the strength of the entire system.

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Foxconn’s factory in China

It is almost impossible to transfer out any of the manufacturing supply chain system, because no country or region in the world has sufficient production capacity and market volume to undertake the scale.

Therefore, Shi Zhan said, “Which country overseas has the pre-requisite market conditions to undertake such a large-scale supply chain network transfer? In an era of economic globalization, if you only transfer factories without the supply chain network, it will not constitute a substantial transfer.”

It is not difficult to transfer a factory, but it is not easy to transfer an entire manufacturing eco-system. The devastating impacts of this pandemic on China’s economy is unquestionable, but yet no other countries have gained the ability to take on China’s manufacturing network ecology.

In fact, in the long run, if China’s manufacturing industry wants to move up the value-added industrial chain, it is also necessary to transfer out part of the production links with high labor costs and low profits.

The pandemic has brought all industries across the country to a standstill. It is not easy for any industry to move from stagnation to recovery. The pandemic may have crushed out some businesses; however, market demand still exists and has not disappeared.

These collapsed companies still have their assets, equipment, skilled workers, engineers, and managers. As long as the demand is still there, these companies will be absorbed by the surviving companies, which will rebuild them to be even better than before.

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For businesses that have to shut down due to the pandemic, the entire process is very harsh.  Yet the collapse of some businesses doesn’t mean that China’s manufacturing industry has collapsed.

Under an ongoing pandemic, any information can affect our judgement.  To an individual, it is hard to judge something that is continuously changing, when the dust settled our judgement will be clear.

Impacts of the Wuhan Coronavirus on China’s Economy

How will the Wuhan coronavirus affect China’s economy? Which industries will be most affected, and which assets will usher in a bottoming rebound?

This article is translated and republished from China Investment Network       

1 Feb 2020: In the early morning of January 31, the World Health Organization (WHO) announced that the Wuhan coronavirus 2019-nCoV was listed as an international health emergency. However, WHO does not recommend the implementation of travel and trade restrictions.  The Wuhan coronavirus outbreak that has started in Wuhan has lasted for more than a month, and is still spreading. According to the National Health and Health Committee, as of 24:00 on January 30, a total of 9692 confirmed cases of new-type coronary pneumonia were reported, of which 1,527 were severe cases, 213 were fatal cases, and 171 were cured and discharged; 1982 confirmed cases were newly added on the day.

In the stock market, class A shares are in the period of lunar new year market break, thus the impact of the coronavirus on A-shares has yet to be seen. However, it is undeniable that the impact of the epidemic on macroeconomics cannot be ignored. The impacts on overseas capital markets and commodity markets are showing with the Asia-Pacific, European and American stock markets all falling across the board.

With the severe coronavirus scare, people’s mobility are reduced, businesses and production sites have been forced to close or delay opening. At the same time, many cities have announced plans to delay their start work dates. The series of actions will weaken economic activities at large and affect the macroeconomic development. Service demands and local consumption are inhibited; production, investment, and exports have been hampered; unemployment may have risen; and GDP growth has slowed.

The first to be impacted is local consumption. Due to the concentrated outbreak of the coronavirus during the traditional Chinese New Year holidays, the industries most affected in the short term are the service industry, especially the transportation, tourism, catering, and entertainment industries. The growth rate of the tertiary industry will be impacted, eventually lowering the growth of consumption. During the SARS period, consumer consumption fell by nearly 6 percentage points year-on-year.

Taking the transportation service industry as an example, on January 28, the Ministry of Transport announced that on January 27, railways, roads, waterways, and civil aviation nationwide sent 16.267 million passengers, a decrease of 68.3% over the same period last year. Among them, the number of passengers sent by railway was 3.463 million, down 62.2%; the number of passengers sent by road was 11.46 million, down 70.3%; the number of passengers sent by water was 283,700, down 83.6%; and the number of passengers sent by civil aviation was 1.006 million, down 42.8%.

The impact of the coronavirus on dining and entertainment is also very significant. In Beijing, the KTV entertainment venues represented by Mai Song are temporarily closed. Beijing ’s most famous food street, the Qiong Street is usually crowded especially during the public holidays. In stark contrast, it has only few pedestrians now. Restaurants are forced to temporarily suspend their business to prevent the spread of the epidemic. These impacts will be reflected at the macroeconomic level, that is, GDP and growth rate, and even employment.  The consequences of the Wuhan coronavirus on the secondary industry should not be underestimated. While restricting the movement of the population, the operations of companies are also affected, resulting in chained consequences of lower productivity and industry performance.

In addition, China is the world’s largest exporter of merchandise. Some countries and regions will reduce or suspend the import of goods considered as connected to the epidemic. This will have a certain negative impact on China’s export commodity manufacturing industry.

The Wuhan coronavirus has disrupted China’s already-opened industrial expansion and economic progression. Zhang Ming, chief economist of PingAn Securities, believes that the outbreak may affect both the supply and demand of consumer goods. On the other hand, considering the adverse impact of the pneumonia epidemic on industrial enterprises, the restocking cycles of industrial enterprises may be delayed, or become lesser, which means that the recovery of PPI (industrial price index) growth may be delayed.

As for the impact of the epidemic on GDP growth, Li Xunlei, chief economist of ZhongTai Securities, believes that the main impact of the new crown epidemic on the Chinese economy is in the tertiary industry, and the annual impact is estimated to be about one percentage point. The negative impact of GDP growth may exceed 0.5 percentage points.

Zhang Ming believes that if we do not consider further development of macroeconomic policies, the economic growth rate in the first quarter of 2020 may be about 1 percentage point lower than the previous forecast. The GDP growth rate in the first quarter of 2020 may be around 5.0%, and the possibility of less than 5.0% is not ruled out. The annual economic growth rate may be around 5.7%.  In Tianfeng Securities (6.400, -0.18, -2.74%), the macro team believes that if the epidemic situation cannot be effectively controlled in the short term, lowered consumption and productivity may affect economic stabilization in stages, and the real GDP growth rate may fall below 6 in the first quarter.

In addition, rating agency Standard & Poor’s made a “preliminary assessment” that Wuhan coronavirus could reduce China’s GDP by 1.2 percentage points.

However, some domestic economists have expressed optimistic views. Wei Shangjin of Fudan University believes that the impact of the pneumonia incident on China’s GDP will be about 0.1%.

Huang Yiping, a professor at the National Development Institute of Peking University, believes that these shocks happened at a sensitive time. Economic growth has clearly declined in 2019, but GDP was still maintained around 6%. With the new Wuhan coronavirus, the downward pressure on economic growth in the first quarter of 2020 will increase again, which will inevitably directly affect the Chinese people’s day-to-day living (73.500, -0.54, -0.73%) and investor confidence. Therefore, while the government is working hard to control the epidemic, it should also consider adopting some policy responses.

Regarding the government’s response, Li Xunlei said that in order to deal with the negative impact of the new crown epidemic (the black swan) on the economy, it is necessary to re-adjust the established fiscal and monetary policies in 2020. Assuming that the epidemic will drag down GDP growth by 1 percentage point under pessimistic expectations, then about 500 billion yuan of investment and consumption will need to be hedged to achieve a steady growth effect.

Li Xunlei suggested that the scale of fiscal expenditure should be expanded, and the proposed fiscal deficit rate should be increased from 2.8% in 2019 to 3%, that is, increase fiscal expenditure of about 200 billion yuan; in terms of monetary policy, a stable and loose monetary policy should be implemented. It is necessary to consider cutting interest rates quarterly, and to increase the target for lowering the interest rate throughout the year to promote new investment or local consumption.

There are also many economists calling for tax cuts for SMEs to reduce corporate burdens.

Capital and Commodity Markets: Slump and Retracement

In response to the epidemic, the General Office of the State Council decided to extend the Spring Festival holiday to February 2 and February 3 to officially resume work. Subsequently, the Shanghai Stock Exchange and the Shenzhen Stock Exchange announced on January 27 that the 2020 Spring Festival will be closed until February 2 (Sunday), and February 3 (Monday) will be opened normally.

It is worth noting that on the last trading day before the Spring Festival (January 23), the market experienced a panic-stricken sell-off, with 9.3 billion funds flowing out of Beijing, and the Shanghai Stock Index and Shenzhen Stock Exchange Index falling by 2.75% and 3.52% respectively. From a global perspective, peripheral stock markets and commodities outside the market are generally worried that the epidemic will cause the Chinese economy to plummet.

The most direct impact on the Chinese stock market and investor sentiment is naturally the Hong Kong stock market. On January 29, the Hong Kong stock market opened for trading. The Hang Seng Index plunged 2.82% on the day and continued to plunge 2.62% on the 30th. Over two days it plunged to 1500 points, a decline of 5.37%.  Another important index future that Chinese investors pay special attention to is the FTSE A50 futures, the index futures trading most active February contracts ‘performance were very bleak. Following a 5.64% plunge on January 27, it plunged 3.28% again on January 30.

In terms of US stocks, the three major US stock indexes, the Dow Jones Industrial Index, the Nasdaq Index, and the Annotated Poole Index, each experienced varying degrees of decline. On January 27 (Monday), US stocks opened sharply lower. At the close, both the Dow Jones Index and the S & P 500 fell by 1.57%, and the Nasdaq also fell by 1.89%. Under the weak market, China’s stocks fell, Alibaba closed down 3.87%, JD.com closed 4.8%, Baidu closed down 2.86%, Weibo fell 0.96%, Pinduoduo fell 2.01%, Weilai Automobile fell 13.95%, NetEase fell 1.84%. Large U.S. technology stocks also fell across the board, with Apple down 2.94% and Amazon down 1.79%.

Although European stock markets have not been hit as much as US stocks, from the perspective of German DAX, British FTSE 100, and French CAC index, they have all declined by about 3 percentage points.

The economic slowdown will also affect commodity markets. However, the demand for the commodity market has different performances due to economic impact. Specifically, from January 19 to January 29, 2020, crude oil and industrial metals fell more than the stock market, of which ICE cloth oil and LME copper dropped 10% and 9.77%, respectively. The market performance of crude oil and industrial metals is highly dependent on economic expansion.

A senior commodity practitioner said to China Investment Network that the Wuhan epidemic has a very direct impact on commodities because commodities are located upstream and midstream of the entire industry chain, also the commodity market has strong global linkages. The short-term negative impact of this epidemic on commodities is relatively large, and it is typically represented by commodities such as iron ore, rubber, and copper.

Taking iron ore as an example, the SGX Iron Ore 2002 contract started to decline on January 23, and fell more than 12% in six trading days as of press time. The above industry experts believe that the core reason for the decline is the short-term stagnation of economic activity affecting the demand for commodities, such as iron ore as a raw material for steel. If the start work time after the Spring Festival is further delayed, and the construction activity lags, then traders and steel mills will face great pressure with their ready stocks. When there is stock dumping, the price of iron ore will be further reduced. “But then demand will gradually rise as the epidemic eases. The best indicator of observed demand is the number of newly diagnosed patients. When the figure turns downward, demand and the price of various assets will rise, probably in March-April. The conclusion is that demand will not disappear, the epidemic will have a smaller impact on the economy as a whole, but a greater impact on the momentum of growth. “

Hedge assets such as gold are different. Against the background of economic slowdown, it is possible to usher in loose monetary policy. As safe-haven assets, gold and U.S. Treasury bonds saw price increases over the same period. From January 21st to 29th, the New York Mercantile Exchange gold futures rose 1.37%; during the same period, the yield on 10-year U.S. Treasury bonds fell by 24bp to 1.60% (the rise in the price of Treasury bonds represents a decline in yields).

The external market performance will eventually be reflected in the performance of class A shares, affecting investor sentiment and behavior. Many investors expressed concerns over market movements after the holiday. However, institutional perspectives are not pessimistic. Yang Delong, chief economist of Qianhai Open Source Fund, said that after the holiday, the trend of the class A shares depends on the spread of the epidemic, but in the medium and long term, the epidemic will not change the market dynamics of class A shares. He thinks that if the market pulls back a lot after the holiday, it is precisely the time to buy in undervalue high-quality stocks.

Anxin Securities believes that the short-term negative impact on the stock market may be less than 10%, or even lower; the medium-term impact on the stock market is small; the market trend is closely related to the number of cases, and the inflection point of case decline will be the inflection point of market repair.

Everbright Securities (12.400, -0.48, -3.73%) said that historically, the emotional impact of epidemics has been short-term. For class A shares, although the adverse news of the epidemic may cause the market to fall in a short period of time, the continuous decline of the market often does not exceed one or two weeks, and then rebounds often occur. Even if SARS had a short-term impact on the economic growth of Q2 in 2003, it did not change the cyclical upward trend determined by fundamentals. For the moment, we should pay close attention to the fundamentals’ trends without excessive panic.

Some investors directly compared the impact of the Wuhan coronavirus incident on the capital market with the 2003 SARS. However, most agencies say this is inappropriate. Although the two incidents directly affected industries such as transportation, tourism, and consumption, the current Chinese economy is not structurally the same as in 2003.

Li Xunlei said that in 2003, China’s economy was in a high-growth stage with heavy industrialization, urbanization, and consumption upgrade. There was with sufficient upward momentum back then. Today, China is in a critical period of supply-side structural reform and economic transformation, and the impact of the Wuhan coronavirus may lead to new problems.

The Wuhan coronavirus will significantly impact dining, tourism, and consumption. From the perspective of economic structure, consumption has contributed more than 60% to China’s economic growth. The consumption and service industries also support China’s employment. The impact of the pneumonia incident on the economy, especially on the capital market, is not completely comparable to 2003.

How does the Wuhan coronavirus affect industry performance?

Under the epidemic, medical stocks were on a binge. The Hong Kong-listed China Medical Group surged 18 times in two trading days because its affiliates could produce products to suppress the pneumonia epidemic. Since the outbreak, Lukang Pharmaceutical in the class A-share market (11.390, 1.04, 10.05%) has exceeded 70% in value. Anti-virus mask concept manufacturers stocks are soaring above stock market value.

There are also organizations that are optimistic about the future of China’s “home” economy, which will ultimately affect the performance of express delivery, games, and online education. New Oriental Online announced that it will provide 1 million New Oriental Online Spring Class live broadcast courses to primary and secondary school users nationwide for free. There are also several educational institutions offering free online courses for Wuhan students.

However, some brokers have expressed concerns about the recent rise in the pharmaceutical sector, which has been affected by the epidemic. The research report of Zheshang Securities (10.570, -0.65, -5.79%) wrote that the outbreak or the catalyst of a phased turn in the market for the medical and biology sectors is good in the short term, but it will not be continuous. Looking back on the several stages of the SARS epidemic that rose from the outbreak to the fall, the market for medical organisms only appeared in the outbreak period, and lasted less than a month in April.

From a wider industry perspective, the adverse impact of the epidemic will eventually affect the capital markets, which includes consumption (accommodation, tourism, catering, etc.), infrastructure (construction machinery, transportation investment, power heating, etc.), transportation (railway, airplane, road transport, etc.), film and television, etc.

Aviation Industry

Due to peoples ‘reduced mobility, the major epidemic has had a greater impact on the aviation industry.  In terms of airports, looking back to the SARS period, when the epidemic broke out, the passenger throughput and take-off growth rate of airports across the country significantly decreased. Taking the Capital Airport as an example, the passenger throughput in May 2003 fell by 86.54% year-on-year. The number of flights dropped by 65.51% year-on-year.

Compared with airports, the epidemic situation has a greater impact on airlines. At present, the Civil Aviation Administration has required that airlines and its ticket sales agency provide refunds to passengers who have previously purchased civil aviation tickets starting at 00:00 on January 24, 2020. Refunds shall be processed free of charge. At present, many airlines have suspended flights to and from Wuhan and gradually reducing the capacity of international flights.

With reference to the SARS period, the passenger traffic of civil aviation in China in the second quarter of 2003 decreased by 48.9% year-on-year. In May of that year, the number of domestic flights, international flights, and Hong Kong and Macao regional flights decreased by 59.3%, 69.7%, and 80.6% respectively. The impacts of SARS on airlines: Air China (8.250, -0.38, -4.40%) Cumulative loss in the first three quarters of 822 million yuan, China Eastern Airlines (5.100, -0.18, -3.41%) Net loss in the first three quarters of 1.193 billion yuan, China Southern Airlines (6.430, -0.25, -3.74%) Net loss in the first three quarters was 783 million yuan.

Aviation stocks fell significantly within two trading days from January 20-21, Air China (00753.HK) plummeted 12.58%, China Eastern Airlines (00670.HK) plummeted 12.15%; China Southern Airlines ( (01055.HK) plunged 11.24%, while Cathay Pacific (00293.HK) fell 5.98%. In addition, when the Hong Kong stock market opened on January 29, aviation stocks fell across the board.

Bank of America Securities issued a report saying that in response to the outbreak of Wuhan coronavirus, the mainland aviation industry will be affected in the short term. Both Air China and China Southern Airlines ’investment ratings were downgraded to “underperform”, reducing Air China ’s target price from HK $ 9.25 to HK $ 6.15. China Southern Airlines’ target price has dropped from HK $ 6.15 to HK $ 4.4.

After the SARS epidemic ended, the aviation sector picked up significantly. Take China Southern Airlines Hong Kong shares as an example. Since the first SARS case broke out on November 16, 2002, China Southern Airlines Hong Kong shares have shown a downward trend, falling to HK $ 0.82 on April 28, 2003, a drop of 29%. However, when the epidemic situation was under control, the stock price rose to HK $ 2.58 on February 23, 2004, an increase of 121%, with a considerable rebound.

China Merchants Securities (18.750, -0.77, -3.94%) believed that the current market sentiment has reflected in the airport aviation industry. Historical experience has proven that the related shares rebounded significantly after the epidemic was eliminated. As of now, it has investment value for long-term investors.

Tourism Industry

With the gradual development of the Wuhan coronavirus, the mobility of domestic travellers has reduced. At the same time, the suspension of visas to Chinese citizens in many countries will reduce the number of tourists and the total tourism revenue. During the outbreak of SARS in 2003, domestic tourist arrivals fell by 0.9% and total tourism revenue fell by 11.2%.

The above impacts are reflected in the stock price: Fosun Cultural Tourism (01992.HK) and Ctrip (TCOM) both fell sharply during the outbreak. Ctrip started to fall sharply on January 21, and fell 7.91% and 6.89% on January 24 and January 27, respectively, and then rebounded on January 27. The latest trading day closed at 32.86 yuan. The closing price before the outbreak was 38.94 yuan, which fell more than 18% in just 7 trading days.

The hotel giant Huazhu (HTHT) also recorded a huge drop of 10.56% on January 21; Fosun Cultural Tourism also did the same: three consecutive trading days since January 24, with a cumulative decline of 13.9%.  Subsequently, Fosun Travel News announced that based on the progress of the current epidemic situation, it is expected that the Group’s revenue from the operation of resorts and tourist destinations in Mainland China, as well as tourism and leisure services and solutions, will be greatly affected in the near future. The revenue from tourism operations outside China is expected to account for about 87% of the company’s total tourism operating revenue in 2019. It still maintains a good momentum and impacts of the Wuhan coronavirus is expected to be limited.

Ctrip co-founder Liang Jianzhang said in an interview with the media that SARS almost stopped the entire industry in that year, but the impact came quickly and disappeared quickly. In December 2003, one month after the end of SARS, the tourism industry bounced back tremendously. Ctrip’s business volume rebounded sharply. He believes that the epidemic may mainly affect the first quarter. In fact, the first quarter of the tourism industry is relatively off-season, especially in February and March after the Spring Festival, which is not the most critical operating stage. Therefore, the impact of the whole year is expected to be relatively controllable.

Film and Television Industry

As the outbreak occurred during the Spring Festival, and due to the decrease in entertainment activities and the simultaneous announcement of the closure of movie theaters, this meant a “failure” of the Spring Festival for major movie companies across the country. This which would have a huge impact on annual performance. .

In 2019, the box office of Mainland China’s movies was 64.149 billion yuan. During the Spring Festival that year (the first day of the new year from February 5th to the fifteenth day of February 19th), the box office in just 15 days reached 9.484 billion yuan, more than 1/7 of the annual box office.

In 2020, the Chinese New Year film blockbuster films include “Chinatown Detective”, “Manslaughter”, “Jiang Ziya”, “Aunt”, etc., involving many producers and distributors. The list includes major listed companies Wanda Television, Light Film, Happy Media, Hengdian Film (15.970, -0.48, -2.92%) Wentou Holdings (3.300, -0.07, -2.08%) , Huaqiang Fangte, Happy Blue Ocean (6.790, -0.36, -5.03%) and so on.
Previously, the entertainment companies had expected the box office of the Spring Festival film to grow significantly year-on-year. Everbright Securities expects that the box office at the Spring Festival in 2020 will achieve high growth under a “low base”. The box office year-on-year growth is expected to be in the 25% -35% range. Spring festival movies returns are expected at 7.62 billion yuan, an increase of 29.8% year-on-year. But the sudden outbreak of the Wuhan coronavirus made the above figures disappeared.

According to Cat’s Eye data, on January 24th (New Year’s Eve), the total box office in the mainland movie market was only 3.29 million, compared with 41.75 million at the same period last year, a 92% year-on-year decrease. On January 25 (the first day of the Chinese New Year), the box office was only 1.81 million, and the box office in the same period of 2019 was as high as 1.458 billion.

Within two trading days from January 20-21, Huanxi Media (01003.HK) plunged 13.99%, Cat’s Eye Entertainment (01896.HK) plunged 15.63%, and Ali Pictures (01060.HK) plunged 10.51%. Subsequently, in the first trading day of Hong Kong stocks, the film and television entertainment sector led the decline.

Food and Beverage Industry

There is no doubt that the epidemic will hit the food industry. The reduction of parties and eating out directly led to a decline in industry. Many food related companies have announced closures.  An investor told China Investment Network that there were few pedestrians on Beijing’s most famous food street, which is completely different from the booming business and crowds during previous holidays. Many restaurants have now announced that they have suspended their business.

From the perspective of listed companies, Haidilao (06862.HK) announced on Sunday (January 26) that all its stores operating in the Mainland were suspended until Friday (January 31). According to statistics, as of the end of June last year, Haidilao operated nearly 550 restaurants in the Mainland, accounting for nearly 93% of the total number of restaurants operated by the company. Data shows that Haidilao’s stock price has fallen sharply since January 20 by nearly 17%.

For Jiu Mao Jiu International (09922.HK), which has been listed in Hong Kong for less than half a month, its main brand Taiji Sauerkraut Fish also announced that all its stores have been closed until Thursday (January 30). “Tai Er” is the largest pickled fish restaurant in the Mainland, with a total of 121 stores.

Jiu Mao Jiu International’s stock price has fallen sharply since January 17. Since January 20, it has fallen more than 17%.
In addition to the above industries, the epidemic will also affect clothing, retail and other industries. From an economic perspective, the impact of the epidemic on the economy is ultimately reflected in the value of the RMB. During the Spring Festival, offshore RMB quotes depreciated by 1,400 BP, a decline of 1.75%, which will ultimately affect the market value performance of listed companies in China’s import and export industry.

Regulations for the Implementation of Foreign Investment Law of the People’s Republic of China

Translated by Lingyun Gao (Professor of Law, Fudan University)

Chapter I General Provisions

Article 1

This Regulations is made under the Foreign Investment Law of the People’s Republic of China (hereinafter referred to as the “Foreign Investment Law”).

Article 2

The State encourages and promotes foreign investment, protects the lawful rights and interests of foreign investors, regulates foreign investment administration, continues to optimize foreign investment environment, and advances a higher-level [market] opening.

Article 3

The “other investors” mentioned in items 1 and 3, paragraph 2 of article 2 of the Foreign investment Law include the natural persons of Chinese nationality.

Article 4

The negative list for foreign investment entry (hereinafter referred to as “the negative list”) is formulated by the department under the State Council in charge of investment, jointly with the department under the State Council in charge of commerce and other relevant departments, and submitted to and issued by the State Council, or issued by the departments there under in charge of investment and commerce after being approved by the State Council.

The State adjusts the negative list in a timely manner to satisfy the needs for furthering the opening up [policy] and economic and social development. When adjusting the negative list, the procedure provided in the preceding paragraph shall apply.

Article 5

The departments under the State Council in charge of commerce and investment and other relevant departments there under work closely, co-cooperatively, and jointly to accomplish the promotion, protection, and administration of foreign investment according to division of their responsibilities。

The local people’s governments above the county level shall strengthen their leadership in promoting, protecting, and administering foreign investment, support and urge the relevant departments to develop, in accordance with law, administrative regulations, and the division of the responsibilities, the promotion, protection, and administration of foreign investment,and timely coordinate and resolve the major issues arising therefrom.

Chapter II Promotion of Investment

Article 6

The government and its relevant departments shall equally treat foreign-invested enterprises and domestic enterprises in funds arrangement, land supply, tax abatement or exemption, qualification licensing, standard setting, project application, or human resource policies.

The policies adopted by the government and its relevant departments supporting the development of enterprises shall be publicized in accordance with law. Where the implementation of a policy involves a matter that the enterprises need to apply for, the government and its relevant departments shall publicize the condition, procedure, and time limit for such application,and treat the foreign-invested enterprises and domestic enterprises equally when reviewing their applications.

Article 7

When issuing an administrative regulation, a departmental rule, or a regulatory document concerning foreign investment, or when the government and its relevant departments are drafting a law or a local regulation concerning foreign investment, the drafters shall, as applicable, seek comments from foreign-invested enterprises, the relevant chambers of commerce, and the relevant associations through various forms including inviting written comments and convening seminars, demonstrating meetings, or public hearings. For those comments and suggestions shared by most people or concerning an issue involving the major rights and obligations of foreign-invested enterprises, feedback on the adoption of the comments or suggestions shall be given in a proper manner.

The regulatory documents concerning foreign investment shall, in accordance with law, be timely publicized, and those not publicized shall not be cited as the basis for administration. A regulatory document closely related to the production and operation of foreign-invested enterprises shall, based on the actual situation, reasonably determine a time frame between its issuing and its implementation.

Article 8

The people’s governments at various levels shall, in accordance with the principle of government-domination and multiparty-participation, establish and improve a system serving foreign investment, and constantly improve the ability and standard of such service.

Article 9

The government and its various departments shall, through its official website or a nationally unified online government-service platform,specify the laws, regulations, departmental rules, regulatory documents, policy measures, and information on investment projects concerning foreign investment,and emphasize publicity and explanation thereof through various methods, to provide consultation, guidance, and other services for foreign investors and foreign-invested enterprises.

Article 10

The “special economic zone” mentioned in article 13 of the Foreign Investment Law refers to a specific area approved and established by the State in which more liberal policy measures of opening for foreign investment are adopted.

The pilot policy measures on foreign investment which are adopted by the State in certain regions and are proved to be feasible, are to be adopted, as applicable, in other regions or nationwide.

Based on the national economy and the needs for social development, the State makes a catalogue of the sectors that foreign investment is encouraged to invest in specific industries, sectors, and regions listed therein. The catalogue for the sectors that foreign investment is encouraged is drafted by the department under the State Council in charge of investment jointly with the department under the State Council in charge of commerce and other relevant departments, and issued thereby after being approved by the State Council.

Article 12

A foreign investor or foreign-invested enterprise may, in accordance with law, administrative regulations, or the rules made by the State Council, enjoy preferential treatments in areas such as finance, tax, financing, and land usage.

A foreign investor who applies income accrued from its investment within China to expand its investment in China shall enjoy, in accordance with law, the corresponding preferential treatment.

Article 13

Foreign-invested enterprises shall equally participate, in accordance with law, in setting and revising the State standard, industry standard, local standard, and group standard with domestic enterprises. Foreign-invested enterprises may, based on needs, make industry standards on its own initiative or jointly with other enterprises.

A foreign-invested enterprise may propose to the administrative department in charge of standard-setting, and may propose comments and suggestions during the periods of approval of the standard-setting project, drafting of the standard, technology examination, and the feedback and evaluation of the implementation of the standard, and engage in standard drafting, technology examination,and other relevant works as well as the translation of the standard into foreign languages.

The department in charge of standard-setting and the other relevant administrative departments shall establish and improve a relevant working system to improve the transparency of and promote the complete publicity of the information on standard-setting and revision.

Article 14

The mandatory standards made by the State shall equally apply to foreign-invested enterprises and domestic enterprises, and [the relevant departments of the government] shall not impose on the foreign-invested enterprises a standard for the technology higher than the mandatory standard.

Article 15

The government and its relevant departments shall not obstruct or restrict a foreign-invested enterprise from freely entering into the government procurement market in the local area or in a specific industry.

The purchaser of government procurement or its agency shall not adopt differentiated or discriminated treatment on foreign-invested enterprises when publicizing procurement information, determining and reviewing the qualification of suppliers, and determining the standard for review thereof.  Neither shall they restrict suppliers through imposing unreasonable conditions, such as restricting the suppliers’ ownership type, organizational form, equity structure, the nationality of the investors, or the brand of product or service, nor differentiate the product manufactured or service provided within China by a foreign-invested enterprise from those manufactured or provided by a domestic enterprise.

Article 16

A foreign-invested enterprise may, in accordance with the Government Procurement Law of the People’s Republic of China (hereinafter referred to as the Government Procurement Law) and its implementation regulations, inquire into or question the purchaser or its agency about a government procurement matter and lodge complaint with the department supervising government procurement. The purchaser, its agency, or the department supervising government procurement shall provide a response or make a decision within the stated period of time.

Article 17

The department supervising government procurement and the other relevant departments shall strengthen the supervision of and examination on government procurement, and correct and punish in accordance with law the activities that treat foreign-invested enterprises differently or indiscriminately in violation of law or regulations.

Article 18

A foreign-invested enterprise may, in accordance with law, obtain financing within or outside China through public offering of securities such as stocks or corporate bonds, issuing other financing securities through either public issuing or private placement, and borrowing foreign debts.

Article 19

The local people’s governments above the county level may, in accordance with law, administrative regulations, and local regulations and within their delegated authority, take policy measures to promote and facilitate foreign investment, such as abatement of fees, guarantee of land-use quota, and provision of public services.

The policy measures purported to promote and facilitate foreign investment taken by the local people’s governments above the county level shall be oriented to promote high quality development, shall be beneficial for improving economic, social, and ecological benefits, and for constantly optimizing the foreign investment environment.

Article 20

The relevant departments in charge shall make and publicize a guideline for foreign investment to serve and facilitate foreign investors and foreign-invested enterprises. The guideline for foreign investment shall include introduction to foreign investment environment, procedure guide lines for foreign investment, information on investment projects, and the relevant data, which shall be timely updated.

Chapter III Protection of Investment

Article 21

The State does not expropriate foreign investors’ investments.

Under special circumstances where the State expropriates the investment of foreign investors for public interests, it shall be proceeded in accordance with the legal procedure and in a non-discriminatory manner, and compensation shall be made timely based on the market value of the expropriated investment .

Article 22

The capital contribution made by foreign investors within China, and the profits, capital gains, proceeds of asset disposal, intellectual property rights’ licensing fee, indemnity or compensation legally obtained, or proceeds received upon liquidation by foreign investors within China, may be freely remitted inbound and outbound in RMB yuan or a foreign currency, and no entity or individual may impose restrictions on the currency, amount, or frequency of inbound or outbound remittance in violation of law.

The salary and other lawful income of foreign employees or employees from Hong Kong, Macau, and Taiwan of a foreign-invested enterprise may, in accordance with law, be freely remitted outbound.

Article 23

The State reinforces punishment on infringement of intellectual property rights, constantly strengthens enforcement of protection of intellectual property rights, promotes the establishment of a fast-track co-ordination protection system for intellectual property rights, improves a diversified system for resolving disputes on intellectual property rights, and equally protects the intellectual property rights of foreign investors and foreign-invested enterprises.

Where a standard-setting involves a patent owned by a foreign investor or foreign-invested enterprise, the relevant provisions on the standard involving the patent shall be applied.

Article 24

An administrative agency (including an organization authorized bylaw or administrative regulations to administer public matters, similarly hereinafter) and its staff shall not compel directly or in a disguised form a foreign investor or a foreign-invested enterprise to transfer technology through implementing administrative licensing, inspection, penalty, coercion,or other administrative methods.

Article 25

Where it is necessary for an administrative agency that is performing its duties to request a foreign investor or foreign-invested enterprise to provide materials or information involving a trade secret, [the materials or information required to be provided] shall be constrained within the scope necessary for the administrative agency to perform its duty, and the access to the materials or information should be strictly controlled and people irrelevant to performing such duty shall not access to the relevant materials or information.

The administrative agencies shall establish and improve an internal administration system and adopt effective measures to protect the trade secrets owned by the foreign investors or foreign-invested enterprises which are obtained during performing of their duties; where the information is required by law to be shared with other administrative agencies, the trade secrets contained in the information shall receive confidential treatment to avoid leakage.

Article 26

The regulatory documents made by the government and its relevant departments concerning foreign investment shall go through compliance review in accordance with the regulations made by the State Council.

Where a foreign investor or foreign-invested enterprise believes that a regulatory document made by a department under the State Council or made by a local government and its departments based on which an administrative activity was conducted is not in compliance with law, it may, in accordance with law, request for a compliance review of such regulatory document when it applies for administrative review of the administrative activity or initiates an administrative litigation.

Article 27

The “commitment on policies” mentioned in article 25 of the Foreign Investment Law refers to the written commitments made by the local people’s governments at various levels and their relevant departments within their legally delegated authority concerning the supportive policies, preferential treatment, and facilitation conditions that apply to foreign investors and foreign-invested enterprises who invest in the local area. The content of such commitments shall comply with law and regulations.

Article 28

The local people’s governments at various levels and their relevant departments shall perform their commitments on policies made in accordance with law to foreign investors and foreign-invested enterprises, and the various contracts entered into therewith in accordance with law, and shall not breach or cancel such a contract on the ground that the administrative division is readjusted, the government officials are re-elected, the agencies or their functions are adjusted, or the relevant persons in charge are changed, etc.  Where the commitment on policies or contract needs to be changed as required for social public interests, it shall be done in accordance with the legal authority and legal procedure, and the damage thus suffered by the a foreign investor or foreign-invested enterprise shall be fairly and reasonably compensated in a timely manner.

Article 29

The local peoples’ governments above the county level and the irrelevant departments shall, according to the principles of publicity,transparency, efficiency, and facilitation, establish and improve a mechanism for foreign-invested enterprises to lodge complaints, in order to timely resolve the issues presented by foreign-invested enterprises or their investors, and to coordinate and improve the relevant policy measures.

The department under the State Council in charge of commerce establishes, with the other relevant departments under the State Council, an inter-ministry joint-conference system concerning the complaints filed by foreign-invested enterprises to coordinate and promote the work concerning complaint made by foreign-invested enterprises to the central government, and to guide and supervise the work concerning complaint made by foreign-invested enterprises to the local government. The local people’s governments above the county level shall designate a department or agency to accept complaints filed by the foreign-invested enterprises or their investors within the local area.

The department under the State Council in charge of commerce and the department or agency designated by the local people’s government above the county level shall improve the rules for the complaining mechanism and the means for lodging complaints, and clarify the time limit for resolving the complaints. The rules for the complaining mechanism, the means for lodging complaints, and the time limit for resolving the complaints shall be publicized.

Article 30

Where a foreign-invested enterprise or its investor believes that an administrative act conducted by an administrative agency and its staff infringes upon its lawful rights and interests, and applies for co ordination and resolution through the complaining mechanism for foreign-invested enterprises, the relevant department may inquire into the concerned administrative agency and its staff about the specific situation while conducting coordination, and the latter shall be cooperative. The petitioner shall be notified in writing about the result of coordination.

Where a foreign-invested enterprise or its investor petitions to resolve a problem through coordination according to the provisions provided in the preceding paragraph, its ability to apply for administrative review or initiate an administrative litigation is not affected.

Article 31

No entity or individual shall suppress or retaliate the foreign-invested enterprise or its investor who lodges a complaint with or petition to the complaining mechanism for foreign-invested enterprises to resolve a problem.

A foreign-invested enterprise or its investor may complain about a problem to the government and its relevant departments through other lawful means, in addition to filing with the complaining mechanism for foreign-invested enterprises.

Article 32

A foreign-invested enterprise may establish a chamber of commerce or an association in accordance with law. Unless otherwise provided by law or administrative regulations, a foreign-invested enterprise may decide autonomously to join in or withdraw from a social organization such as a chamber of commerce or an association, and no entity or individual shall intervene.

The chamber of commerce or association shall, in accordance with law, administrative regulations, or its articles of association, strengthen the self-discipline of the industry, timely report the request of the industry,provide to its members services such as information consultation, publicity and training, market expansion, economic and trade exchanges, protection of rights and interests, and dispute resolution.

The States supports the chambers of commerce or associations to conduct relevant activities in accordance with law, administrative regulations,and its articles of association.

Chapter IV Administration of Investment

Article 33

A foreign investor shall not invest in a prohibited sector on the negative list. For a restricted sector on the negative list, a foreign investor shall comply with the special administrative measures required for entry of the restricted sector, such as the requirement for equity shareholding and qualifications for its senior management officers.

Article 34

Where a relevant department is performing its duties, it shall not grant permit,  register the enterprise,or allow the relevant matters if the foreign investor proposes to invest in a sector listed in the negative list but the corresponding requirements are not satisfied; where an application concerns approval of an investment project involving fixed assets, the approval shall not be issued.

The relevant department shall strengthen supervision and examination of the enforcement of the negative list; if it is discovered that a foreign investor is investing in a prohibited sector on the negative list, or if the investment activity of a foreign investor is in violation of the special administrative measures required for investing in a restricted sector on the negative list, the provisions provided in article 36 of the Foreign Investment Law shall be applied.

Article 35

Where a foreign investor invests in an industry or sector which requires obtainment of a license in accordance with law, unless otherwise provided by law or administrative regulations, the relevant department responsible for implementing the license shall, according to the same condition and procedure applicable to domestic enterprises, review the application of the foreign investor for the license, and shall not impose discriminatory requirements on the foreign investor concerning the conditions for granting the license, application materials, review, time list for review, etc.

The relevant department in charge of implementing the licensing shall, through various means, optimize the service for the review and improve the efficiency of approval. The licensing matters that satisfy the relevant conditions and requirements may be handled by means of making commitment upon receipt of notification in accordance with the relevant rules.

Article 36

Where the foreign investment needs to be approved to filed for the record, it shall be handled in accordance with the relevant regulations of the State.

Article 37

The registration of a foreign-invested enterprise shall be filed with the department under the State Council in charge of market supervision and administration or the duly delegated department of a local government in charge of market supervision and administration. The department under the State Council in charge of market supervision and administration shall publicize the list of duly delegated departments of market supervision and administration.

The registered capital of a foreign-invested enterprise may be represented by RMB or by a freely-convertible currency.

Article 38

A foreign investor or foreign-invested enterprise shall, through the enterprise registration system and the enterprise credit information disclosure system, report investment information to the competent departments in charge of commerce. The departments under the State Council in charge of commerce and market supervision and administration shall integrate and coordinate the relevant systems, and provide guidance for foreign investors or the foreign-invested enterprises to report their investment information.

Article 39

The content, coverage, frequency, and specific procedure of foreign investment information report are determined and announced by the department under the State Council in charge of commerce jointly with the department under the State Council in charge of market supervision and administration and the other relevant departments, based on the principles of actual necessity, high efficiency, and facilitation. The department in charge of commerce and the other relevant departments shall enhance information sharing, and if the investment information is available through the inter-departmental information sharing system, the foreign investor or foreign-invested enterprise shall not be required to submit a duplicate report.

The investment information reported by foreign investors or foreign-invested enterprises shall be true, accurate, and complete.

Article 40

The State establishes a security review system for foreign investment to conduct security review for those foreign investments that affect or may affect the State security.

Chapter V Legal Liability

Article 41

The government, its relevant departments, and the staff thereof,shall assume legal liability in accordance with law and administrative regulations if they have conducted any of the following activities:

(1) making or implementing a policy which does not equally treat foreign-invested enterprises and domestic enterprises in compliance with law;

(2) illegally restricting foreign-invested enterprises from equally participating in the standard setting and review, or imposing a technology requirement on foreign-invested enterprises which is higher than the mandatory standard;

(3) illegally restricting foreign investors from remitting funds inbound or outbound;

(4) failure to honor a commitment on policies made in accordance with law to a foreign investor or foreign-invested enterprise or failure to perform the various contracts legally entered into therewith, making a commitment on policies in exceeding its duly delegated authority, or making a commitment on policies the content of which does not comply with law or administrative regulations.

Article 42

The purchaser in government procurement or its agency, who exercises differentiated or discriminatory treatment on foreign-invested enterprises through imposing unreasonable conditions, shall assume legal liability according to the Government Procurement Law and its implementation regulations; where the bidding result is or may be affected, the Government Procurement Law and its implementation regulations shall apply.

Where the department supervising the administering government procurement has not made a timely decision on the complaint filed by a foreign-invested enterprise, the directly responsible person in charge and other responsible staff shall receive sanctions in accordance with law.

Article 43

Where an administrative agency and its staff compels directly or in a disguised form a foreign investor or foreign-invested enterprise to transfer its technology, the directly responsible person in charge and other responsible staff shall receive sanctions in accordance with law.

Chapter VI Supplementary Provisions

Article 44

A foreign-invested enterprise established before this Law takes effect under the Law of the People’s Republic of China on China-Foreign Equity Joint Ventures, the Law of the People’s Republic of China on Wholly Foreign-Owned Enterprises, or the Law of the People’s Republic of China on China-Foreign Contractual Joint Ventures may elect to transform its business form and organization structure, etc. according to the Corporation Law of the People’s Republic of China and the Law of the People’s Republic of China on Partnership Enterprises and file for registration of modification of its business form within five years since this Law takes effect; it may also maintain its original business form or organization structures.

Since January 2025, for those existing foreign-invested enterprises that have not transformed their business form or organization structure in accordance with law and have not filed for modification registration, the department in charge of market supervision and administration shall not accept their application for other registration matters, and shall publicize the relevant situation thereof.

Article 45

The specific rules on registration of modification of the business form or organization structure of the existing foreign-invested enterprises shall be made and announced by the department under the State Council in charge of market supervision and administration. The department under the State Council in charge of market supervision and administration shall reinforce its guidance on modification registration, and the departments of market supervision and administration in charge of modification registration shall,through various means of optimizing their service, facilitate the enterprises for their modification registration.

Article 46

After the existing foreign-invested enterprises have transformed their business form and organization structure, the conditions on transferring shares of stock or shares of equity and the means of distribution of income and the residual assets agreed upon by the original cooperative parties may continue to be effective.

Article 47

The relevant provisions provided in the Foreign Investment Law and this Regulations apply to the foreign-invested enterprises that re-invest within China.

Article 48

For the investors from the Hong Kong Special Administrative Region and the Macau Special Administrative Region investing in the mainland, the Foreign Investment Law and this Regulations shall be applied by reference;except that the law, administrative regulations, or the rules made by the State Council that provide otherwise shall be applied.

For the investors from Taiwan investing in the mainland, the Law of the People’s Republic of China on Protection of Investment Made by Taiwan Compatriots and its Implementation Regulations shall apply; for the matters not mentioned in the aforementioned Law or Regulations, the Foreign Investment Law and this Regulations shall be applied by reference.

For the Chinese citizens who have settled abroad investing within China, the Foreign Investment Law and this Regulations shall be applied by reference, except that the law, administrative regulations, or the rules made by the State Council that provide otherwise shall be applied.

Article 49

This Regulations takes effect since January 1, 2020. The Regulations on Implementing the Law of the People’s Republic of China on China-Foreign Equity Joint Ventures, the Provisional Regulations on the Term of China-Foreign Equity Joint Ventures, the Implementation Rules on the Law of the People’s Republic of China on China-Foreign Equity Joint Ventures, the Implementation Rules on the Law of the People’s Republic of China on Wholly Foreign-Owned Enterprises, and the Implementation Rules on the Law of the People’s Republic of China on China-Foreign Contractual Joint Ventures shall be repealed at the same time.

If there is any discrepancy between the rules concerning foreign investment made before January 1, 2020 and the Foreign Investment Law or this Regulations, the Foreign Investment Law and this Regulations shall prevail.

THE END

Executive Search in Chongqing

Evolving Workplace Trends You Can’t Ignore

WiseNetAsia Knowledge Center
Copyright © 2019 WiseNet Asia Pte Ltd.  All Rights Reserved

Everything changes, but some things stay the same in the workplace. The common denominator is the workforce and the traits they bring along.

To keep ahead of the game, and to attract and retain the best talents, the people-centred approach still rules the day despite technological advances.

Worldwide, millennials and post millennials – the Gen Z, are making up more than a third of the workforce and this figure continues to climb. They have shifted expectations and demands in the workplace. To include them meaningfully and productively, companies will need to be agile as they rethink the workplace to focus on what’s important to this expanding group of workers.

  1. PRIORITIZING THE WORKER EXPERIENCE

Traditional office norms and rigid structuring of work processes and hours are not going to cut it. At the first hint of a better-fit opening elsewhere, employees are going to head out with few misgivings.

Managers who shake their heads at the teflon quality of the ‘younger’ workforce today would do better to accept that priorities have changed since the boomer era.

Due to technology and because of greater accessibility and a world where we are affected by happenings globally, it has become harder to compartmentalize work and personal life.

Flexible work arrangements

As a result, the 9 – 5 bracket doesn’t always work anymore. Flexible work arrangements are welcome where it’s not the fixed linear hours put in that counts, but results that matter.

This is even more apparent with the gig economy where skilled workers are hired on a project basis and can work remotely – the freelancers, consultants, and other non-permanent workers.

Work-life balance

Work-life balance is prioritized as people become more health-conscious both physically and mentally and take conscious steps to avoid burnout. This is where people-centred perks like company subsidized gym memberships, breakout areas with snacks and entertainment, mental fitness care and regular company hangouts can bolster a sense of balance and satisfaction.

Face-to-face interaction at work

As contradictory as it sounds, millennial workers who grew up in a digital-centric world look forward to face-to-face interaction at work. This is where even though communications are often via the internet, meetings in real life are crucial, not just teleconferencing.

Positive engagement from higher-ups

Positive engagement from higher-ups is desired where workers feel cared for and where it is not necessarily only about work every time. Regular check-ins from their higher-ups make workers feel valued and trusted, more motivated and integrated into companies to produce better work and stay longer in the company. 

  1. SOFT SKILLS ARE THE NEW HARD SKILLS

Hard skills can be readily taught but soft skills take longer to learn. Positive attitudes, good organizational skills and the ability to connect with people are incredibly valuable skills sought by future-oriented companies. Keeping a sharp lookout during recruitment and doing appraisals for these strengths in candidates are crucial so you don’t miss out.

  1. LEVELLING OF CORPORATE HIERARCHIES

Climbing the corporate ladder vertically was the goal in the past. Not anymore, as workers take on multiple roles and expand their skillsets in the process following the lattice model, making them more marketable and in demand.

As career paths become more fluid, it is timely for companies to foster a more collaborative environment that allows for team-switching, redesigning of meaningful job descriptions as well as platforms to share ideas and provide candid feedback. Unless companies do so, it is almost certain that they will lose good talent sooner than later.

Companies need to stay open and alert to training and moving their workers within the company for them to stay invested in the company. 

  1. INCREASING CO-EXISTENCE OF ARTICIAL INTELLIGENCE AND WORKERS

Technology has brought along artificial intelligence which, among other things, takes over the mundane and repetitive tasks of human workers. Chatbots can respond with greater immediacy and accuracy, not just for the consumer, but also for workers when they need mentoring or assistance.

What this means is that workers are expected to be better equipped to take on more complex, varied and creative roles including social and emotional ones. This ties in to cross-training and horizontal collaboration within the company discussed earlier. Clearly, the human element is not going away! 

  1. COMPANIES TAKING A STAND ON SOCIAL ISSUES

Activism is a catchword these days and with ever-increasing information and awareness of the ripple effects of events on life, companies that take a stand on social issues will attract the right talents.

Workers will align better with a company that have a social mission in which they feel they can contribute meaningfully instead of merely making a living. With a strong sense of shared purpose – part of the bigger picture – they are more readily invested to give their best at work.

All said, the millennial generation which forms a large chunk of the workforce expects promotions and salary increases to happen sooner than later. HR managers will need to manage these expectations by striking a balance – inspiring steadfastness without courting cynicism!

 

 

—End—

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