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APAC Edition
2nd April 2024
 
THE HOT STORY
Job creation in South Asia not keeping pace with working age population, World Bank says
Job creation in South Asian economies is not keeping pace with the rise in the working age population, according to the World Bank. The region is at risk of missing out on its demographic dividend, which is a fantastic opportunity for growth, the bank says. The World Bank expects South Asia's output growth to be around 6-6.1% in the financial year ending March 31, 2025, with India leading the way. However, job creation in India has been hindered by weak private investment. The World Bank suggests that South Asian nations need to address policy weaknesses to accelerate job creation, including encouraging productive firms to hire workers and promoting greater openness to international trade.
WORKFORCE
Young Chinese jobseekers face reality as career aspirations vanish
The youth jobless rate for the 16-24 age group in China reached 15.3% in February, up from 14.6% in January, and young jobseekers in China are being forced to lower their career aspirations and accept lower-paid positions due to the shrinking opportunities in the employment market. The adjusted youth-unemployment rate for the 16-24 age group, excluding students, rose to 15.3% in February. Despite the government's efforts to support employment, China is still facing growing unemployment pressure. The ongoing downturn in the property market, slumping investment, and payment arrears in private firms are contributing to the job market challenges. The government aims to create over 12 million new jobs in urban areas this year, but a record 11.79 million university students are set to graduate, exacerbating the employment woes.
HIRING
India's March factory growth hits 16-year high, hiring picks up
India's manufacturing industry experienced strong growth in March, reaching its highest level in 16 years. The HSBC final India Manufacturing Purchasing Managers' Index rose to 59.1, indicating accelerating demand and robust production growth. The data is likely to support Prime Minister Narendra Modi's government, which has focused on manufacturing to boost the economy. The manufacturing industry has been growing for 33 consecutive months, the longest streak since July 2013. The report also highlighted an increase in hiring, with employment generation at its strongest since September. While the outlook for the upcoming year is optimistic, concerns about inflation have led the Reserve Bank of India to resist interest rate cuts. Input costs rose at the fastest pace in five months, but not all were passed on to clients. Overall, manufacturers have an optimistic outlook for future business conditions.
REMUNERATION
Cainiao to double end-of-year bonuses after scrapped IPO plans
E-commerce logistics firm Cainiao says it will double its end-of-year bonus for all employees in the next financial year, after parent company Alibaba's decision to scrap plans for the unit's IPO. Employees will receive their standard year-end bonus in April 2025 and another bonus equivalent to that amount in August 2025. The plan will cover all full-time employees who are active at that time and eligible for the regular year-end bonus. Earlier, Alibaba dropped plans to float Cainiao in Hong Kong, and said it would instead buy the 36% of shares it doesn't already own, for up to $3.75bn. "The overall environment for doing capital market transactions in order to unlock value for shareholders is just not there in this part of the world", explained Alibaba chairman Joe Tsai. "It doesn't make sense for us to grind into these capital market deals".
CULTURE
Lawyers need better understanding of 'emotional journey', says report
A study by the International Chamber of Commerce says lawyers need a better understanding of the "emotional journey" of the businesses they advise, as well as local values and practices to avoid cross-border disputes. The study of over 1,700 mid to senior-level managers indicated that the cultural backgrounds of business people and organisations profoundly influence their approaches to acquiring, maintaining and ending relationships. According to research, where conflicts arose, 50% of those questioned attributed contract failure to weak relationships between the parties, with the other half blaming contractual issues or performance. The report suggests that the ability of lawyers to understand relationships also affects a company's choice of external counsel. Some 47% of survey respondents said that they would prioritise individuals or firms showing cultural sensitivity. Roland Ziadé, an international arbitration partner at London-headquartered law firm Linklaters, says there is an increasing move for lawyers to be "emotionally and culturally intelligent" as well as "legally savvy." He says the report reminds in-house and external counsel of the benefits of multilingual teams with cross-cultural experience. Jon Newman, a partner at law firm Kirkland & Ellis, says that "emotional intelligence is a critical skill for lawyers" - but most do not understand that point as they focus on the legal or commercial aspects of their roles.
STRATEGY
U.S. law firm Weil exits Beijing
Weil, Gotshal & Manges has closed its Beijing office and is in discussions to consolidate its Asia operations in Hong Kong, signaling its retreat from the Chinese market. The move follows other U.S. law firms, such as Orrick, Herrington & Sutcliffe, that have also consolidated their Chinese operations. Weil's decision is attributed to growing pressures on foreign businesses in China, as well as new government rules on data privacy and cybersecurity. The firm's spokesperson emphasized its dedication to its award-winning Asia practice and providing top service to clients in the region. Weil has more than 20 lawyers and employees in Hong Kong. A trend of U.S. law firms reducing their presence in China has been observed in recent years, with market conditions and economic downturn cited as reasons for cuts or office closures.
Grant Thornton launches China desk in UAE
Professional services firm Grant Thornton has launched a China desk in the UAE to support cross-border business between China and the Middle East. The desk, headed by Advisory Director Alex Tsui, aims to meet the growing demand from clients in various sectors. This move comes as an increasing number of wealth managers are setting up offices in Dubai, which is becoming a preferred wealth hub for entrepreneurs and wealthy families in Asia, particularly China. Grant Thornton's China desk will help capitalise on the warming diplomatic ties between Beijing and the Middle East.
TECHNOLOGY
Amazon adds $2.75bn to Anthropic investment
Amazon said it has invested $2.75bn more into artificial intelligence (AI) start-up Anthropic, taking the worth of its stake to $4bn. The funding marks Amazon’s largest investment in another company since the online retailer was founded nearly 30 years ago. The news comes weeks after Anthropic debuted Claude 3, its newest suite of AI models that it says are its fastest and most powerful yet. The company said the most capable of its new models outperformed OpenAI’s GPT-4 and Google ’s Gemini Ultra on industry benchmark tests, such as undergraduate level knowledge, graduate level reasoning and basic mathematics.
INTERNATIONAL
Migrants from Asia flock to Croatia as labour shortage persists
Croatia is turning to migrants from Nepal, India, the Philippines, and other countries to address its chronic labour shortage. The country, which has been traditionally reliant on seasonal workers from its Balkan neighbours, now faces tens of thousands of vacant positions in construction and the service industry. However, migrants in Croatia often face challenges such as cramped and expensive housing, as well as anti-immigrant rhetoric. Right-wing parties have accused migrants of threatening the country's security and stealing jobs from Croatians. Language barriers and conservative attitudes towards outsiders also hinder the integration of the new labour force. The Croatian government is planning to amend the law on foreigners to better regulate accommodation and provide language classes.
McKinsey warns some US consultants that they are running out of time to win promotion
McKinsey & Co. has sent memos to some consultants, warning them of the limited time they have to win promotion. The memos were sent to engagement managers and associate partners in North America, reminding them that staff in these roles have an average of two and a half years to be promoted. McKinsey's recent actions suggest a possible rethinking of the firm's staffing strategy following years of aggressive hiring and low attrition rates. The firm maintains a high bar for performance and continues to recruit and hire robustly. McKinsey's warning comes at a time when the consulting industry is facing a slowdown in client activity and economic headwinds. The "up or out" policy, whereby employees are expected to be promoted within a specific time-frame or exit, is common in many global consulting firms. Other consulting firms, such as Accenture and Ernst & Young, have also trimmed headcount to control costs. Last year, McKinsey eliminated about 1,400 roles. The company has about 45,000 employees worldwide and has faced political backlash for its work in Saudi Arabia and China.
Stellantis signs deals for voluntary lay-offs in Italy
Stellantis, the maker of Fiat cars, has signed new deals with unions in Italy for voluntary lay-offs, potentially reducing its workforce by over 3,000 roles. The agreements cover facilities in Melfi, Pomigliano d'Arco, and Termoli, and are driven by the industry's transition to cleaner energy. Similar deals were announced for operations in Turin and the engine making facility in Pratola Serra. However, a deal has not yet been signed for the Cassino plant. Stellantis employs around 43,000 people in Italy and has used voluntary redundancy packages as the main tool to reduce its workforce. The carmaker is also in talks with the Italian government to increase its annual output in the country. "[The deals] are part of the initiatives implemented by Stellantis to address the effects of the ongoing energy and technology transition process," said a company spokesperson.
Tax experts urge South Africans living abroad to regularise their tax affairs
Tax experts have urged South Africans living and working abroad to regularise their tax affairs, as growing numbers of young professionals head out to take advantage of opportunities offshore. The Treasury has made it easier for individuals to emigrate and return by applying for non-resident status with The South African Revenue Service.
OTHER
TikTok launches Shop Mall to boost e-commerce revenue
TikTok has launched Shop Mall, a new feature aimed at increasing its e-commerce revenue. The move is part of TikTok's strategy to compete with existing e-marketplaces Lazada and Shopee in Thailand's $11.6bn e-commerce sector. Since its launch earlier this year, Shop Mall has already attracted 400 sellers and over 1,000 product items, with 100,000 orders delivered. TikTok aims to grow Shop Mall rapidly with content-driven commerce or "shoppertainment". The top five categories on the platform are fashion and accessories, beauty and personal care, food and beverages, electronic devices, and household items. The mall charges a commission fee of 4%-6% to sellers, depending on the product category. TikTok currently has 2.4m sellers, with the majority of users aged 18-34.
 


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