Salary Policies, New Technologies and Investment Perspectives in China

On June 23rd, the China-Italy Chamber of Commerce (CICC) together with our Mechanical Engineering Working Group(MEWG) held the sixth webtalk of the series called "Sharing Is Caring: Issues for the MEWG in China”.

The webinar, with more than 30 participants online, has collected testimonials by AsecorpChina Business Consulting, Thermowatt (Wuxi) Electric Co. Ltd Wuxi (Ariston group), Eutron Kunshan Electronics Technology Co. Ltd, and PKF Consulting Inc. Experts in the human resources and the electronics sectors have also been invited to discuss the new regulations regarding salary remuneration policies during the lockdown, new technologies and investment perspectives in China.

According to the new regulations, salary payments will depend on the business status and whether the employees are able to work from home; the amount shall be negotiated between the two parties with minimum monthly wage as a bottom line. Employees unable to carry on their tasks from home will still be entitled to the payment of minimum living expenses.

"The unprecedented lockdown has posed major challenges to the human resource management of most businesses in China. During the lockdown, two questions, including (i) does an employer need to pay all employees full salary? and (ii) does an employer need to pay bonus? have become the headache for many HR managers and line managers. In accordance with the newest policies and regulations issued by the government, actually employer does have the right to negotiate with employees in a totally compliant way to settle such issues depending on various situations. For example, the employer could negotiate with employees about their salary during lockdown depending on whether the work could be provided online. In this sense, it is advisable to engage professional labor law experts to develop a strategy to control the labor cost in a compliant way." — Bruce Chen, Director of Legal Departments at PKF Consulting Inc

With the growing use of technology, the demand for electronic devices and automotive keeps rising as well.Investing in new plants, manufacturing layouts and highly skilled employees seems to be the best course of action for foreign companies to remain competitive in the Chinese market.

"China represents the largest market in the world, and it’s running on the way of the high tech product to offer the world by modern and advanced manufacturing locally located. China’s economy, currently the second-largest in the world, will surpass the United States by the end of the decade, within 2030, according to forecasts from a couple of European firms. The Chinese government will rely on state investment, high-tech development and domestic consumption to grow GDP by 5.7% each year through 2025 and 4.7% annually through 2030. I wish Italian companies will put massive investment in China to be part of the following market global generation and part of the products specialty players in the worldwide future of the market." — Roberto Saponaro, General Manager at Eutron Kunshan Electronics Technology Co., Ltd

"The sentence ‘You can have it (Ford Model T) in any color as long as it's black (Henry Ford)’ is no more valid. The modern manufacturing challenge is to improve efficiency considering scalability, flexibility, customizable, and many more. To be competitive in this market as a foreign company, we must grow in China with China. Collaborative Robots will be one of the options to increase labor efficiency in the new era." — Ke Da, General Manager at Thermowatt (Wuxi) Electric Co., Ltd Wuxi (Ariston group)

Lastly, implementing new technologies should not forsake the individual perspective of employees; businesses should not only train the employees to use new technologies but actively involve them in the transitioning process, thus making them feel empowered and valued.

"When selling or implementing a new technology, the human element is often neglected. Sales focus on persuading the decision-maker, which is hardly the final user of that technology. In turn, the decision-maker has to mediate the potential conflicts that the introduction of such technology will bring inside the organization. The company that wants to implement the technology, on the other side, focuses too much on cost reduction and ROI. Taking into account the degree of acceptance of this technology from the final user can actually accelerate ROI and competitive advantage. That is to say, don't underestimate how employees feel impacted by the implementation of new technology if you want your digitalization strategy to be successful." — Rosanna Terminio, Managing Partner AsecorpChina Business Consulting and PhD Student at Universitat Oberta de Catalunya

We thank all the panelists for their views and the moderator Carlo Nizia, MEWG Vice Coordinator and Risk Management at UFI FILTER.

DID YOU MISS THE PREVIOUS WEBINARS?

- Webtalk #1 | May 12th: focus on the components sector and the difficulties related to the reopening of production sites: Sharing Is Mandatory More than Caring

- Webtalk #2 | May 19th: focus on the machinery sector and the difficulties related to the supply chain: Valuable Insights into Supply Chain Issues

- Webtalk #3 | May 26th: focus on industrial services and incentives: Incentives to Support Businesses: a Vital Key to Success

- Webtalk #4 | June 6th: focus on automotive and market trends: Automotive Market | What to Expect from the Second Half of 2022

- Webtalk #5 | June 16th: focus on manufacturing sector and logistics: Logistical Aspects in Managing Supply Chain & Production