Xinhua Insight: Private businesses preferred over SOEs
0 Comment(s)
Print
E-mail Xinhua, October 31, 2014
High income and high status have stoked recruitment for private companies in China, while rigid structure is dragging state-owned enterprises (SOEs) into a slump.
Statistics published by Zhaopin.com, a major recruiting website in China, show a 23 percent spike in recruitment year on year in the third quarter.
Private companies are particularly performing well, with government support giving them extra firepower in the job market battle. Employment was up 31 percent in the third quarter, according to Zhaopin. SOEs, however, trailed far behind their non-governmental peers with job figures down by 29 percent.
The report echoed figures from northwest China's Shaanxi provincial department of human resources and social security, which showed a strong preference for private businesses among college graduates. Of the province's 2014 graduates, almost 140,000 went private and less than 42,500 chose to work for state companies and government agencies.
"We have seen plenty of applications recently, including graduates from elite universities," said Yang Limin, general manager of Disi Technology Co. Ltd., a private company in Jilin Province in the northeast of the country. As a small business, the company used to face annual travails in recruitment, Yang said.
On the other hand Gao Chao, deputy general manager of state-owned Northeast International Trade Co. Ltd. in neighboring Liaoning Province, told a very different story.
"It is getting harder and harder to find satisfactory recruits these days," he said.
GOODBYE, SECURITY; HELLO, SALARY
Gone are the days when SOEs were the top choice for top graduates with lucrative benefits, relaxed work, and "jobs for life", as innovative, market-driven private businesses rise with government support.
Last year, the third plenary session of the 18th Central Committee of the Communist Party of China decided to give more support to the private sector, to stimulate vitality and creativity.
Wang Fei, a Jilin University graduate, believes the advantages of state companies are now offset by better salaries and social status in private businesses, bringing a stream of talent outflow from SOEs.
"Smart and full of bright ideas, students tend to go for private entities, where fewer restrictions mean more room to show of their talent," according to Yang Limin.
According to the China Enterprise Confederation, 200 of the country's top 500 enterprises this year are private companies. So far, 10 Chinese private enterprises have made the 2014 "Fortune Global 500" list.
And what these businesses want is more bright shining young stars.
In the latest example, China's online direct sales superstar JD.com, listed on Nasdaq in May, is recruiting on campuses across the country, aiming to hire hundreds of graduates this year.
In striking comparison, SOEs' rigid regulations and systems have slashed efficiency, said Sun Zhiming, head of the institute of economic research with Jilin Academy of Social Sciences. Excessive government intervention, a legacy of the planned economy, hampers development, and contributes to their waning popularity.
But state enterprises are changing, though officials remain divided on issues like shareholding proportions, and on a reform plan that is yet to be launched.
Sun believes state companies need to abandon their crusty old bureaucratic ways and push for mixed-ownership if they want to survive in China's new cutthroat job market.
"While the development of private companies is very pleasing, we want to see SOEs do better and make best use of their advantages," said Xia Xueluan, a sociology professor with Peking University. "Both state and private companies are important in stabilizing China's job market and economy." Endi
Go to Forum >>0 Comment(s)