20摄氏度 2006-11-9 02:40 PM
Recruitment firms boost investment in China
period to 68 in the post-2000 period. 5A(~^ V(s LN A
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However, the growth was faster (132%) for investments in mainland China (58 post-2000 versus 25 in the prior period), the first empirical evidence that foreign human-capital companies have stepped up their investment on the mainland.
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"China is the human-capital sector's number [one] opportunity long-term," said Mark Dixon, a director of the1. "With a population of 1.3 billion, you don't have to be a rocket scientist to do the math. It's a numbers game, with some very big numbers." M
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Explaining this shift in investor attitude, Dixon said, "People have been aware of the potential of the Chinese job market but most viewed 'M&A for people businesses' as too theoretical - the country, the culture and the prospect of profits all being too far off. ,\-e@f$e2S+a"mQi1n
"But now we now seem to have passed a tipping point. Although the Chinese recruitment industry is nascent and impeded by red tape, profits are already being made. This has negated the old excuse in the industry that China should be left as a challenge for the next generation." p.I,p@:@G'KB9y
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Commenting on the maturity of the investment flow, Dixon said, "We haven't entered a land-grab phase yet. In coming years, investors will move on from toe-hold investments to building national brands and large office networks across China. We'll see them pour in real capital.
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"Larger recruitment groups are starting to feel pressure from clients, institutional investors and boardrooms," he said. "The result is clear. The attitude to China is moving from opportunity to obligation. Obsession may not be far away."
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Hong Kong, which saw most of the early investment, has been receiving less attention. It attracted 10 transactions post-2000, compared with the 58 on the mainland during the same period. Hong Kong now is viewed more as a market in its own right rather than as the gateway to China. Companies wanting to capitalize on "the China opportunity" are discovering they need to be in China proper. r XX,Q)k
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Cumulatively, Hong Kong has received 51 deals, compared with 105 on the mainland. Before Britain handed Hong Kong back to China in July 1997, the small territory attracted more human-capital-sector investments (53%) than the entire mainland. It is no longer where the action is. After the handover, a period that coincided with an investment flow into China from many countries and industries, the balance has switched - mainland China has attracted 82% of all deals. N/_,~2XS0B3k
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This move inland is even seen among the pre-handover investors in Hong Kong themselves, who made 35 deals. Some 77% of these groups have subsequently expanded into mainland China. 3Hft*\rC
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Commenting on this trend, Dixon said, "Hong Kong used to be King Kong - the 800-pound gorilla on the Chinese human-capital stage, a sort of bouncer standing outside the stage door of China. Kong has now gone, at least in that capacity."
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Legal structures used ,C8~ Gl8`
A range of different legal structures is being used by investors to operate in China, some on a solo basis and some with partners.
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More than half (55%) of the investments involve the foreign company setting up a new subsidiary in China. This compares with 28% of investments in the form of representative offices. Just 17% are new joint ventures with a local partner or the partial acquisition of an existing local company (which results in effect in a joint venture after the transaction). )kO1Of6j
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Regulations have allowed 100% foreign ownership of some categories of human-capital investment, notably human-resources consulting, rather than headhunting or recruitment, which have found it difficult to get licenses at any level of ownership. `7L;r K1_{ ?\R
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Since October 2000, rules have been loosened, allowing 49% foreign participation of all categories. Joint ventures are thus becoming more popular. Just 17% of the total investment count for all periods, joint ventures accounted for 35% of investments since 2002 compared with a negligible 9% prior.