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(News Focus) Chinese firms expand recruitment of Korean executives

2016/08/05 17:37

By Kim Han-joo

SEOUL, Aug. 5 (Yonhap) -- Cash-rich Chinese companies are displaying a growing appetite for South Korea's top-notch technocrats and professional managers, raising fears of a technology leak or talent drain amid intensifying global competition in key industries, economists and officials said Friday.

Chinese businesses used to recruit retired executives or technicians from Korean firms to acquire their technologies and expertise.

Lately, however, China's companies are paying more attention to the recruitment of incumbent engineers and managers in not only state-of-the-art technologies but also lucrative manufacturing sectors.

According to recent media reports, China's leading smartphone maker Huawei Technologies Co. has hired a former executive of South Korean tech giant Samsung Electronics Co.

Andy Ho, who formerly worked as Samsung Electronics' senior vice president in charge of sales in mainland China, has been tapped by Huawei for a position as vice president in charge of its consumer business department, they added.

Samsung is the world's largest smartphone maker by global shipments with Huawei taking the third spot.

Samsung downplayed Ho's relocation to its Chinese rival, but industry watchers warn that Chinese technology companies have been intensifying their hiring of Korean engineers and specialists with big paychecks and promises of good working conditions for two or three years now.

Informed industry officials say that almost all of China's 24 smartphone makers currently have at least one South Korean manager-level employee in their core business departments.

Chinese semiconductor firms have also successfully recruited local talent by suggesting salaries that are nine times bigger than their current ones, industry sources said.

"South Korean firms afraid of technology leaks are imposing strict conditions on former employees about their transfers to other firms within a certain period of time. However, it is practically impossible to limit individuals' freedom to choose his or her career," said an employee of a local semiconductor firm on the condition of anonymity.

Although South Korea boasts the world's top two computer memory chip makers -- Samsung Electronics Co. and SK hynix Semiconductor -- experts say that there is not enough manpower in the industry.

The Seoul government recently announced that it would jack up research and development (R&D) spending on semiconductors, especially to train the workforce, in an effort to boost the industry.

In the global display market, many Chinese firms are known to have successfully recruited former South Korean talent to acquire their knowledge on liquid crystal (LCD) displays.

Experts say that more Chinese-based firms are moving to focus on recruiting those who specialize in light-emitting diodes (OLEDs), since more smartphone makers are moving to equip their devices with power-saving panels instead of LCD displays.

"The OLED field needs accumulated knowledge and expertise, and someone with good equipment cannot just easily catch up," said a TV display industry expert.

Last year, Chinese display maker China Star Optoelectronics Technology co. recruited Kim Woo-sik, former vice chairman of South Korea's LG Display Co., as its new CEO, apparently to expand its business portfolio.

Also, South Korea recently suffered from an outflow of experienced pilots to China, which lured them with big paychecks and attractive working conditions, the industry source said.

China, as one of the world's fastest-growing aviation markets, has made efforts to hire local pilots with more than 10 years of flight experience to make up for a shortage of its domestic pilots.

According to recent industry data, a combined 61 pilots from South Korea's two flag carriers, Korean Air and Asiana Airlines Inc., were recruited by Chinese airlines last year.

According to industry data, a local pilot with 10 years as captain under his belt earns an average of 150 million won ($130,000) annually.

"Airlines have worries when they lose experienced pilots since it usually takes a long time to train them," said a local airline official on the condition of anonymity.

More Chinese beauty firms are also moving to aggressively recruit South Korean talent following local firms' huge success in the Chinese market on the back of the "K-pop" boom, the experts said.

South Korea's cosmetics exports to China doubled on-year to US$1.08 billion in 2015, which accounts for nearly 40 percent of its total global sales.

A former CEO of a subsidiary of Seoul's top cosmetics maker, AmorePacific Co., was recently recruited by a leading Chinese cosmetics maker.

"There are no advantages currently for someone in the local cosmetics industry to transfer to a Chinese firm," said an industry expert, but admitted that it could be a different situation in a few years.