Saturday, January 3, 2009

Results of SASAC Recruitment Drive

In July of 2008, China's State-Owned Assets Supervision and Administration Commission (SASAC) announced with much fanfare that it was opening recruitment for 16 high level positions in state-owned enterprises (SOEs). Among these positions were three general managers, 10 assistant general managers and three chief accountants. The idea here was that SOEs were open to hiring talented people from anywhere in the world, with a view toward improving the performance of central state-owned enterprises.

China Daily (3 July 2008) even added a bit of commentary to its announcement:
China's State enterprises used to be criticized for being slow to market changes - a legacy of the planned economy era. Top managers, many of whom appointed by higher authorities, are often thought as officials who lack some of the skills needed in corporate management.

But since China has adopted the market-based economy, the SASAC has tried to introduce modern corporate governance into State enterprises by helping them establish board of directors and supervisors and by making their managers more professional and better suited to manage the country's approximate 30 trillion yuan worth of State assets.

The results of this recruitment drive were publicized last month (December 2008), and, well, let's just say that SASAC's fanfare was really much ado about nothing. Bottom line: they ended up hiring 14 Party members, 12 of whom came from within the organizations that hired them, and only one person had any overseas experience.

To me, this is one more indication that SOEs are here to stay, at least for the foreseeable future. The lack of new blood and fresh ideas being brought in indicates that SASAC is happy with the status quo. These new hires will not be expected to rock the boat. While no one should be surprised by this, I think it highlights the importance of understanding the relationship between business and government in China.

This also raises some interesting questions.
  • Did SASAC intend to hire only Party insiders, or was that just a coincidental result?
  • If SASAC did intend to hire only Party insiders, then why make such a fuss at the beginning of the recruitment effort, and why be so transparent throughout the whole process?
Speaking of transparency, the whole process was indeed surprisingly transparent -- or at least as transparent as the recruiting processes of Western corporations. As the statistics below demonstrate, SASAC has been very forthcoming, not only about those who were hired, but also about the characteristics of those who applied.


Extraneous statistics for those interested:

Position Requirements
  • Seven of the 16 positions require that applicants be PRC citizens.
  • The other nine have no citizenship restrictions.
  • There is no specific mention of Party membership requirements.
Characteristics of Applicants
  • Altogether 2,745 people applied for the 16 open positions. (Avg. 172 per position.)
  • 383 were deemed to have met the qualifications. (383/2745 = 14%)
  • 232 (8.5%) had postgraduate education.
  • 93 (3.4%) had doctorates.
  • 232 (8.5%) were under 45
Among the 383 deemed eligible:
  • 243 (63.4%) came from SOEs
  • 54 (14.1%) came from private or foreign funded enterprises.
  • 65 (17%) came from institutions (机关事业单位)
  • 69 (18%) had either worked or studied abroad for a year or more
  • 12 were foreign citizens
  • 4 came from HK, Macau or Taiwan
Characteristics of Hirees
  • 15 of the 16 positions were filled as of this date (only the position of General Manager of Nanguang Jituan was not filled)
Career backgrounds
  • 8 engineers
  • 5 accountants (3 filled chief accountant spots and 2 assistant GM spots)
  • 1 economist
  • 1 researcher (研究员) (also the only one with a doctorate)
  • All but three of the 15 had already worked for the hiring company or a unit of that company. (In other words, these were mostly internal hires.)
  • From what I can tell, 7 had only worked for the hiring firm (or one of its affiliates) during their entire careers.
  • None of the 15 had previous government experience
Educational backgrounds
  • 11 hold master’s degrees
  • 3 hold only bachelor’s degrees
  • 1 Ph.D.
  • Oldest hire – 50
  • Youngest – 36
  • Median age – 44
Party Membership
  • All but one of the 15 are Party members
  • 6 had previously held party secretary positions in their respective organizations
  • The median age upon joining the Party was a surprisingly high 30.5 years.
  • Only three appeared to have joined the Party during their college years (22 or younger).
  • This suggests the possibility that being a Party member was not necessarily an important factor for the 15 in gaining their requisite career experience, but it appears to have been important for being selected for these senior level positions.
Only one of the 15 has overseas experience: a CPA who had worked for both PwC and Deloitte in San Francisco, and who had been working for the Beijing branch of Deloitte prior to being hired as Chief Accountant for China National Agricultural Development Group Corporation. Coincidentally (or not), this was also the youngest hire (36 yrs) and also the only non-Party member hired among the 15.

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