Robert here, just finishing another all-nighter at about 10am EST I am not proud to say (after all, have to still work on Asia market time when I am stateside with family in our Miami Beach home). Apologies for the couple of weeks without a new post. It has been a very busy past four weeks, with a lot of travel and a surge in Asia associate interview activity finally (as we mentioned in previous post). The surge in interviews that started a few weeks ago has so far resulted in only one senior associate placement in Shanghai (my first associate placement in China since three in January), but we expect three to five associate placements in the next month from the current interview activity in HK / China. We also continue to make partner placements from time to time in this down market, keeping us as busy as ever (we have more partner level candidates in Asia than I can remember at any time previously).
As always, please feel free to ask any questions in comments and we will answer each asap (although this time let’s keep my wife out of the comments, shall we?).
The China doomsdayers (all firms are closing withiin 5 years) and impersonaters are welcome too, but these days I have at long last (and at the urging of the “fake Robert, the real fake Robert”) stepped up to the plate with my very own ATL account for commenting, complete with photo, an example of technical savy to be sure.
Please note a sampling of some of our more urgent associate openings (although “urgent” in this market does not make for quick offers, as we have seen even a few five round interview processes):
Tokyo – project finance / leveraged finance mid-level to senior associate, Korean required
Dubai – PE / M&A mid-level to senior associate, must be UK qualified
Beijing – PE / M&A mid-level to senior associate, Mandarin required
Shanghai – IP litigation senior associate, Mandarin required
Hong Kong – PE / M&A mid-level to senior associate, Mandarin preferred
Now that some key economic data has emerged for March and the first quarter in China, there are a number of reasons to be cautiously optimistic that China’s economy can rebound sooner rather than later. Please note the following:
* During the first three months of ’09, China banks have leant over US$670 Billion, which is more than the total leant by China banks in the entire ’08 calendar year. It is now projected that total loans by China’s banks will top US$1.17 Trillion in ’09 (approx. 40% higher than analysts had predicted earlier this year).
* new bank lending in China quadrupled in February
* China’s steel mills, anticipating a pickup in demand for steel, imported more iron ore in March than in any one month previously.
* China crude oil imports in March were at a year high.
* On the Comex division of the New York Mercantile Exchange copper prices surged yesterday to their highest in six months, due primarily to speculation that increased stimulus spending in China will boost demand there. China is the world’s biggest metal user.
* The Shanghai Composite Index is up approximately 35% thus far in ’09 and today hit an 8 month high.
* Urban fixed-asset investment jumped an unexpected 26.5 percent in the first two months from a year earlier
* In March, China’s new car sales rose 24% and broke an all time record with 1.11 million vehicles sold. This was the third straight month that car sales rose in China and this trend is expected to continue for the foreseeable future.
* China has clearly become the world’s largest auto market, surpassing the US for monthly car sales in each of the past three months. Industry experts predict that more than one million more cars will be sold in China than in US during ’09.
* Manufacturing in China during the month of March expanded (compared to Februrary) for the time in six months.
* An acceleration in first-quarter property investment to 4.1 percent in the first quarter, up from 1 percent in January and February.
* The China’s National Bureau of Statistics’ survey of managers shows confidence rose in the first quarter of this year after free falling in the 4th quarter of ’08.
* China’s airlines are projected to show profit for full year ’09.
* Although exports continue to decline, as is expected during a global recession, the pace of decline slowed significantly in March. Exports were down 17.1% from March ’08, while in February exports were down 25.7% from February ’08.
* The Organization for Economic Cooperation and Development; The World Bank; and the Asian Development Bank all have gone on record predicting that China GDP will increase at a faster pace in 2nd half ’09, due in large part to obvious signs the stimulus in China has been effective.
* Ha Jiming, chief economist at China International Capital Corp. in Hong Kong yesterday raised his forecast for China’s growth in ’09 to 8%, from earlier prediction of 7.3%.
Here are some significant recent quotes to consider from the past few days:
“Whether the economy can accelerate from this point is unclear, but it certainly seems to have stabilized.”
Stephen Green, head of China research at Standard Chartered Plc in Shanghai
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“Recovery is a high certainty now. Infrastructure investment remains at full speed, bank lending reaccelerated in March and property transaction volumes have surged across the country.”
Tao Dong, chief Asia economist at Credit Suisse AG in Hong Kong
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Regarding pace of China export decline slowing sharply in March:
“It says we’re no longer in free-fall. It’s still down sharply year on year, but it’s an optimistic sign for the Chinese economy as well as the whole world.”
David Cohen, an economist at Action Economics in Singapore
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“Export activity showed signs of stabilization, reflecting modest improvement in global demand. There are some initial signs of recovery in China’s raw materials demand, driven by government stockpiling and record imports of iron ore.”
Jing Ulrich, chairwoman of China equities for J.P. Morgan
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“China will see a solid economic recovery from March as the impact of the stimulus package becomes larger over time. The economy may expand as much as 10 percent in the fourth quarter of this year”
Sun Mingchum, an economist at Nomura Securities in Hong Kong
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“China’s economy is responding to the government’s stimulus plan with investment spending this year exceeding all expectations.”
Asian Development Bank report
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“There are signs that the slowdown in China’s economic growth is ‘bottoming out.’ Buoyant private consumption and investment and a pick-up in credit growth were helping domestic demand to offset the impact of collapsing exports in the first two months of the year.”
OECD report
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“Market performance over the past month was beyond our expectations and demand for homes may probably continue to be strong through the end of this quarter.”
Flora Wang, director of research at Shanghai Centaline Property Consultants Ltd.
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Although the overall economy is showing signs of life in China, the biglaw associate lateral hiring market in China (and certainly Asia in general) is still very slow, with many top US firms still in deep hiring freezes. However, as I mentioned in our previous post, there is a lot more interview activity now than there was one month ago in China and Asia in general. It seems that M&A is picking up much quicker than cap markets in China, as we have stated in previous posts. While most firms would probably like to expand their M&A associate ranks at this time, many that are overstaffed with cap markets associates do not have the flexibility to do so. There are a number of firms, however, that are hiring now in M&A, and especially private equity focused practices. As you may imagine, such firms are being as selective as ever, considering the over abundance of solid candidates on the market.
Some firms are using this time of transition to diversify and build up new practices, such as IP, TMT, international arbitration and restructuring. The partners to lead such practices are coming from both internal firm transfers and lateral hires. The first wave of associates coming to these new practices are mainly internal transfers from New York, London and other major western markets, but there is some lateral interviewing taking place at present in IP practices in HK / China.
Project finance / energy remains relatively busy and there is very selective interviewing occurring at a few such practices, but the hiring is very much drawn out (even during a hot lateral market, these groups tend to hire a lot more slowly than the core corporate practices).
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