The central government is drafting rules to regulate operation of overseas talents seeking institutions, said Tang Jun, vice-director of the Department of Human Resources Exchange under the Ministry of Personnel.

Tang said the potential of China's human resources market has attracted wide attention from foreign companies engaged in headhunting.

In fact, some foreign headhunters have already set up shop in China, eager to claim some of the market, he said.

"It is no use trying to block them, so the government has decided to open the door cautiously and step by step,'' Tang noted.

In its initial phase, opening of the market will involve lifting restrictions on the establishment of human resources joint ventures with foreign capital.

Sun Weiyan, a professor at the International Business Management School with the University of International Business and Economics, said the new policy will have an impact on domestic headhunters.

Foreign companies in the human resources service industry are often experienced and enjoy solid financial backing -- luxuries most domestic firms lack, he said.

Current estimates show 4,100 domestic companies competing in the human resources sector. Many of them are small, with less than 10 employees, and have meager talent files.

"The influx of foreign headhunters is a threat to poor domestic performers, but it will also help restructure the market.

Competitive domestic firms will manage to survive and an orderly market will emerge,'' he predicted.

Meanwhile, talented Chinese will enjoy a convenient channel to jobs with multinational companies, he said.

Despite the specter of increased competition, some domestic companies showed confidence in their future.

Wang Changjiang, manager of a Beijing-based headhunting firm, said human resources form a special industry and the foreign companies lack crucial understanding of the local culture.

"Signs showed many foreign companies which operate underground have had to retreat, including some famous firms, so we are not worried about the future,'' he said.

Huang Jian, president of Zhuoyue Management Consulting Co, said the domestic and foreign companies can join hands to make the market bigger.

"Helped by foreign counterparts' experience and pushed by competition, domestic firms will find themselves working a more orderly market and more companies and job-seekers will come to us for help,'' he said.

According to statistics, 10 million people are expected to change jobs this year but less than 10 percent will go through human resources companies.

(China Daily 08/14/2001)