(March 5, 2007) — In the imagination of many business leaders outside China, the country with its 1.3 billion people is a land with an endless supply of solid workers earning US$100-$150 a month. Inside China, though, it's quickly apparent that's not the case.
Finding employees with the right skill set remains a critical challenge. A Feb. 21 report from New York-based research group Conference Board Inc., for example, argues China's university graduates often are not well-trained for the demands of the workplace.
One of the main problems, the board said, is that China's educational system “relies too heavily on memorization.”
“Companies need people with creative writing and speaking skills, teamwork skills and leadership ability, which are not yet taught well in most of China's universities and graduate programs,” the board said.
That's a huge potential weakness for companies in China that want to make more-sophisticated products. China wants to go from being the world's workshop, producing other people's products cheaply — and squeezing as much as they can out of low-paid workers — to developing brands and products that compete on their own. But that requires a skills upgrade.
Auto parts maker and injection molder Asimco Technologies Ltd. started a one-year leadership development program for senior managers several years ago. The Beijing company, owned by U.S. investors, gives the managers mentors and on-the-job projects.
The company has expanded the program to include lower-level managers and staff. It has earned the firm accolades: Asimco was named one of China's 10 best employers in 2005 by consultant Hewitt Associates LLC and the newspaper 21st Century Business Herald.
Others firms are following. Eastek International Corp. started a formal, 18-week program to teach English to its workers in Dongguan. The company, based in Buffalo Grove, Ill., wants to offer classes in project management, public speaking and other business topics, once it gets the hang of administering a school. “We run a small village with 1,000 people,” one Eastek executive said.
Of course, there are the well-documented challenges of finding workers in coastal manufacturing areas like Dongguan, where governments have raised minimum wages dramatically, yet companies still find it hard to fill jobs. A recent report from the “China Labour Bulletin” in Hong Kong compared wages of factory workers and government workers in Dongguan between 1994 and 2004. Using Dongguan government data, it reported that while government workers' wages rose 340 percent to 35,000 yuan, wages in the city's apparel and leather goods sectors went up only 35-70 percent, to about 10,000 yuan. That makes real income for them “more or less static,” when you factor in inflation.
It doesn't sound like Dongguan's factory workers are sharing in the city's growth, and it makes me wonder if China remains more interested in cheap labor than a skills upgrade.
Toloken is a Plastics News correspondent in Hong Kong.