[Economic Highlights] 

China has vowed to increase its talent pool from 114 million to 180 million by 2020, with spending on human resource accounting for up to 15 per cent of the country’s gross domestic product (GDP). The pledge was included in the National Outline for Medium- and Long-Term Talent Development (2010 – 2020) released on Sunday. According to the outline: 

• By 2020, more than 5 million talented individuals will be urgently needed in equipment manufacturing, IT, biotechnology, new materials, aeronautics and astronautics, oceanography, finance and accounting, international business, environmental protection, energy resources, agriculture technology, and modern traffic and transportation.
• The country’s human resource structure needs more education-conscious talent, with 20 per cent of the labour force receiving higher education.
• Every 10,000 people in the labour force should include 43 professionals working on research and development.
• In 2020, the country will complete its transition from a labour-intensive nation to one that is driven by talent. [Source: China Daily (P2), 7 June 2010]

Meanwhile, Foxconn's pay rise has both buoyed workers' expectations over the new minimum salary standards that the Shenzhen government will announce next month and put pressure on other factory owners. The rise in pay at Foxconn will put it ahead of the city's monthly minimum wage, which officials are expected to announce next month will rise to above 1,100 yuan. Guangzhou raised its statutory minimum salary to 1,100 yuan last month, and Shenzhen's is usually slightly higher. The pay rises at Foxconn and Honda are putting pressure on other enterprises. Huang Ming-chih, chairman of the Taiwan Businessman's Association in Shenzhen, said Foxconn's unexpected pay rise would raise the labour cost of other Taiwanese factories amid a labour shortage. He said for many factories that had just recovered from the global recession, a huge pay rise would definitely increase their operational costs and shrink their margins. Other factory owners also were also worrying that their workers would follow those at Honda and Foxconn to strike for more pay, and many of them could not afford to offer the same rise. [Source: SCMP (A4) / The Standards (P13), 3 June 2010]

Meanwhile, hiring expectations in Hong Kog are rising rapidly this quarter in Hong Kong, with 65 per cent plan to increase hiring in the third quarter of 2010, compared with 59 per cent in the second quarter and three times higher than a year ago (22 per cent in Q3 2009), according to a report by Hudson. Media/ PR/ Advertising sector has the highest hiring expectation (86 per cent), followed by Legal sector (80 per cent) and Banking & Financial Services sector (77 per cent). Consumer sector has the least hiring expectation with 42 per cent. Meanwhile, a high proportion of respondents are prepared to offer substantial salary increases to dissuade top talent from resigning. Across all sectors, 40 per cent say that they will counter offer with rises of more than 10 percent. However, nearly one-quarter (23 percent) say they will not offer any increase to staff planning to resign. The survey interviewed nearly 450 executives across key business sectors in May. [Source: Apple Daily/ hk.hudson.com, 30 Jun 2010]

Faced with a possible labour shortage by 2012 or 2013 when most big infrastructure works begin, improved worksite environment, pay rises, more job training and free herbal tea are just some of the extra benefits for staff that big construction companies are coming up with.  Gammon Construction, a big contractor in Hong Kong, has already started training shot-firers - who skilfully conduct explosions - to prepare for a surge in demand amid increased tunnelling work ahead. There are only about 34 shot-firers in Hong Kong - grossly insufficient for the upcoming projects, including the high-speed rail link to Guangzhou. But the chief executive of Paul Y. Engineering Group, Dr Stanley Wong, said wages and training were not the only means to attract and retain talent. A dignified work environment is also important. The group is considering building more bathing facilities and mobile toilets for its workers. Under a recent scheme to boost workers' morale and sense of belonging, main contractors will also get a subsidy from the government to produce uniforms for workers. [Source: SCMP (C2), 10 Jun 2010]

Furthermore, consumer prices rose 2% last month from a year earlier, 0.1 point more than the average inflation rate in the first two months of the year. The underlying inflation rate was 0.8% last month, the same as the average in January and February, Census and Statistics Department figures released yesterday show. Prices for electricity, gas and water surged the most last month. [Source: SCMP (A2) / China Daily (M3), 23 April 2010] 

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