"We expect the crackdown will clear up violations in the booming job-hunting market and protect job seekers," said Wang Shaochang, vice director of the bureau.

Many of the delinquent companies were posting misleading advertisements on Websites to attract corporate clients and job seekers, according to Guo Jianmin of Shanghai's HR Market Supervision Department.

Guo gave the example of a small unlicensed company called Shanghai Fulang Talent Management Co., which boasted in its ads that it is the largest recruitment agency in eastern China.

Companies were also caught offering recruitment services for industries out-side of their approved business scope.

Fifty-eight foreign companies were investigated for various infractions, including doing business without a Chinese partner. Three of those firms were shut down and nine more are still under investigation, according to the bureau.

Many of the foreign companies are not clear about our policies and are now seeking local partners, said Guo.

Headhunting companies are relatively new to Shanghai, where until recently a government-run agency held a monopoly on all recruitment services in the city. While the sector has been opened up, companies must meet strict requirement to get a business license from both the Shanghai Municipal Personnel Bureau and the Shanghai Industrial and Commercial Administrative Bureau.

Domestic companies must have at least 50-square-meters of office space, more than 100,000 yuan (US$12,096.6) in registered capital and at least five qualified employees.

The department, which was set up in April to oversee the rapidly growing industry, vowed yesterday to continue with the crackdown in order to protect local job hunters. The number of headhunting agencies in the city has grown from 104 to 239 during the last seven months.

(eastday.com August 29, 2002)