BEIJING
- "When I hit the big time, I will buy a BMW-7
series car as my marriage dowry," said sparkling
22-year-old Jian Jingtao. "I'll give it to my
fiance to show him how much I love him."
In China, the cheapest BMW-7 series model
costs nearly 1 million yuan (US$133,000) while the
average annual income for urban residents
nationwide was only 12,000 yuan in 2006.
Jian, a civil servant in the southwestern
province of Sichuan, makes about 1,200 yuan a
month, and she also works as a part-time weather
girl at a TV station in Liangshan Yi Autonomous
Prefecture, an impoverished
region in Sichuan, where most people haven't even
heard of BMW. The part-time job doesn't bring her
much money.
Then, how can she possibly
realize her dream? Well, instead of counting on
her part-time job, she has other ideas.
"I'm taking the Chartered Financial
Analyst [CFA] test and I've passed level II," says
Jian, her eyes shining with hope. "Just one step
away from the best financial institutions."
She believes getting a job in such
institutions will mean she is one step closer to
her dream car.
Official data suggest that
staff workers in China's well-known financial
institutions make 15,000 yuan a month and more.
And jobs in the financial sector have being taking
the lead, driven by the basic principle of a
market economy's supply and demand.
About
45 million people will join the labor force in the
next five years in China, but many of them will
have to take jobs as laborers and construction
workers and make just 800 yuan a month.
When lecturing in China's leading Tsinghua
University, China Construction Bank (CCB) chairman
Guo Shuqing testified that the most troubling
problem facing his bank in its "go overseas"
strategy is a shortage of talented professionals.
CCB, one of China's "Big Four" state-owned
commercial banks, wants to set up branches in New
York and London, Guo told the students, adding
that the bank is "hungry for people specialized in
financial accounting, securities analysis,
portfolio management, interest rate pricing and
foreign exchange pricing".
China, the
world's fastest-growing economy with an annual
gross domestic product (GDP) growth of almost 10%
for the past 10 years, has long been considered
the world's factory, producing about 75% of the
world's home appliances, for example.
But
as the country moves to a more market-oriented
financial system, financial talent is at a premium
because there are many issues to deal with.
As a major reform in the financial sector,
China dropped its currency peg to the US dollar in
July 2005 and linked the yuan to a basket of
foreign currencies, allowing it to float in a 0.5%
band (which was expanded to 0.5% this year) around
the official central parity.
"Everything
changed when they expanded the fluctuation range
to 0.5%," says textile trader Wei Changshan from
Beijing-based Dongxing Textile Co. "I'd really
like to hire someone to tell me about how to
manage it."
In July 2005, one US dollar
could be exchanged for 8.28 yuan. On September 21
this year, the same dollar could be bought for
just 7.51 yuan.
Hearkening to overseas
comments, Yi Gang, assistant governor of the
People's Bank of China (PBoC), the country's
central bank, said that the exchange rate of the
Chinese currency would gradually become more
flexible.
As for the stock market, the
benchmark Shanghai Composite Index surged by more
than 130% year-on-year in 2006 after a five-year
bearish market, thanks to reformed securities
regulations and continuing strong economic growth.
China's stock market is now the largest in Asia by
market capitalization.
As new regulations
come into play concerning foreign investments,
Chinese fund managers and securities traders would
like to compete with overseas competitors. The
lack of financial talents seems serious.
A
recent government document on qualified domestic
institutional investors (QDII) allows domestic
fund management and securities companies to follow
commercial banks into the arena of overseas
securities.
"We started preparing for QDII
products nearly six months ago," said Xu Xiaosong,
vice general manager of China Southern Fund
Management. "So we are recruiting. Unfortunately
we are not the only ones. A number of big
securities companies are looking for people," said
a fund manager who asked to remain anonymous.
"It's simple. If we want to win the competition we
need the best team."
Not surprisingly,
foreign banks are also on the lookout for
qualified people in China. In 2005, the Bank of
East Asia opened personal services, the first to
do so in China.
In the China-US Strategic
Economic Dialogue held in May, China agreed to
allow foreign banks to issue their own
yuan-dominated credit and debit cards. The move is
seen as a way of boosting fair competition between
local and foreign financial institutions.
At the third national conference on
financial work early this year, Chinese Premier
Wen Jiabao said that China would facilitate fair
competition between domestic and foreign financial
institutions.
As the government opens the
banking sector to meet its World Trade
Organization commitments, the human resources
battle for the best and brightest in the financial
sector has escalated as well.
HSBC expects
to grow its headcount from 3,000 to 4,000 in China
this year and Citigroup plans to hire about 1,000
extra people. Standard Chartered said it did not
have a specific target this year but hired 1,000
in 2006.
Finding enough experienced staff
and training them adequately is the toughest issue
confronting the bank, HSBC China chief executive
Richard Yorke said earlier this year.
"There is no real finance education in
Chinese colleges," noticed Wang Zhao, an economist
with Beijing University's China Center for
Economic Research. "The so-called finance
[education] in colleges only consisted of
macro-control measures, such as monetary policy,
that hark back to the days of the planned economy.
What Chinese students want now is courses on
securities analysis and portfolio management," he
said.
A recent international survey
released by Deloitte Consulting found that
two-thirds of the 636 senior finance executives
surveyed thought the supply of high-quality talent
in Asia was limited or inadequate.
"The
crucial but tricky part is that you have to master
international practice as well as the local
reality," managing director for Asia-Pacific
Operations CFA Institute Jane Squires commented.
"This year, 10,200 people signed up to
take the CFA test in China, up 30% from last
year," Squires said. "We can reasonably project
that there will be 600 more CFA holders at the end
of 2007."
"I can't say how many financial
experts China needs but one thing is certain,
there is plenty of room for those who have the
capacities. The United States currently has 44,220
people who hold the CFA qualifications. In
comparison there are 3,650 in Hong Kong, 2,133 in
Singapore and just 1,086 in China," she said.
China has outlined its new policies for
the financial sector, including deepening the
reform of state-owned banks, facilitating rural
financial reforms, and steadily pushing forward
the reform of foreign exchange rate.
The
country's financial sector is set to speed up as
the market continues to swing open. In that case,
Jian Jingtao, the young lady with so many
traditional Chinese virtues, has an excellent
chance of realizing her dream and the dream of her
lucky boyfriend, probably with a little help in
the shape of a bank loan.
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