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Huge IT layoffs trigger labor friction

Labor unrest is expected to spread following massive layoffs at several IT giants, with expertscalling on multinationals to take the issue seriously.Cisco Systems has announced a plan for global job cuts, while thousands of Microsoftemployees in China are trying to negotiate a deal for better compensation following layoffs.”Labor disputes involving overseas information technology companies are set to grow for thenext two years at least as the Chinese economy slows,” Zhang Zhiru, a labor rights expert atShenzhen Chunfeng Labor Disputes Services Center, said on Thursday.He said that although most of the IT companies are willing to provide compensation higher thanthat provided for under Chinese law, this does not mean they have done a perfect job.”The law only sets a minimum level. Companies with better financial power should definitely paymore (in layoff compensation) if employees need this,” Zhang said.Cisco, the world’s largest telecom equipment maker, plans to cut up to 6,000 employees globally.It did not say how many employees will lose their jobs in China, one of the world’s biggest ITconsumers.Microsoft’s biggest cut in the company’s history could cost at least 4,000 jobs in China,according to a person familiar with the issue. Most of the cuts will come at three Nokia facilitiesthe company acquired months ago.More than 500 employees at a Microsoft handset development site in Beijing handed in a signedrequest last week calling for direct talks with company executives on layoff arrangements.The US software giant has declined to give details of its layoff plans in China.”We have committed to an earliest leaving date of the end of September. From the time theannouncement was made, this is longer than Nokia’s earlier practice in China,” Donald MacRae,human resources director for Microsoft’s handset unit in China, wrote in an internal e-mailexplaining the layoff plan.Microsoft is offering employees at least a further month’s salary than provided for under Chinese law. The employees are asking for more and for a longer “buffering period”.Chinese law states that employees are entitled to a month’s compensation for each year theyhave worked for a company, plus an additional month’s pay.Mike Dai, a smartphone developer at the plant, described the company’s move as a “violentaction”

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Labor unrest is expected to spread following massive layoffs at several IT giants, with expertscalling on multinationals to take the issue seriously.Cisco Systems has announced a plan for global job cuts, while thousands of Microsoftemployees in China are trying to negotiate a deal for better compensation following layoffs.”Labor disputes involving overseas information technology companies are set to grow for thenext two years at least as the Chinese economy slows,” Zhang Zhiru, a labor rights expert atShenzhen Chunfeng Labor Disputes Services Center, said on Thursday.He said that although most of the IT companies are willing to provide compensation higher thanthat provided for under Chinese law, this does not mean they have done a perfect job.”The law only sets a minimum level. Companies with better financial power should definitely paymore (in layoff compensation) if employees need this,” Zhang said.Cisco, the world’s largest telecom equipment maker, plans to cut up to 6,000 employees globally.It did not say how many employees will lose their jobs in China, one of the world’s biggest ITconsumers.Microsoft’s biggest cut in the company’s history could cost at least 4,000 jobs in China,according to a person familiar with the issue. Most of the cuts will come at three Nokia facilitiesthe company acquired months ago.More than 500 employees at a Microsoft handset development site in Beijing handed in a signedrequest last week calling for direct talks with company executives on layoff arrangements.The US software giant has declined to give details of its layoff plans in China.”We have committed to an earliest leaving date of the end of September. From the time theannouncement was made, this is longer than Nokia’s earlier practice in China,” Donald MacRae,human resources director for Microsoft’s handset unit in China, wrote in an internal e-mailexplaining the layoff plan.Microsoft is offering employees at least a further month’s salary than provided for under Chinese law. The employees are asking for more and for a longer “buffering period”.Chinese law states that employees are entitled to a month’s compensation for each year theyhave worked for a company, plus an additional month’s pay.Mike Dai, a smartphone developer at the plant, described the company’s move as a “violentaction”

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Huge IT layoffs trigger labor friction

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Could China’s financial repression be good for growth?

China’s financial reform and development over the past four decades could be described as strong in establishing financial institutions and growing financial assets, but weak in liberalising financial markets and improving corporate governance.

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When China began economic reform in 1978, it had only one financial institution — the People’s Bank of China. As a centrally planned economy, the state arranged the transfer of funds and there was little demand for financial intermediation.

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