A Japanese opinion on China being world factory
This is actually an old post, the earliest one I could find is from tieba.baidu on March 29, 2006, however, it came back to life these days and was reposted by sohu business review, chinareviewnews.com etc. and was recently referred by the popular commentary talk show Behind the Headlines with Wen Tao (铿锵三人行) on Phoenix TV.
Here is translation of the content:
I am a typical so-called “economic animal” Japanese businessman, I have been China for over 6 years working and living in 5 different cities in China. I have learned some Chinese in university back in Japan, so I understand Chinese and can read Chinese character though less capable in writing and oral speaking. I have my own understanding about China’s being called as “world factory”, as far as I am concerned, China do achieve a lot in terms of productivity, but it has a lot more to go to fulfill the essence of being “world factory”.
World factory is not sweat-and-toil factory
People said we Japanese are like ants, but compared with hard-working Chinese, we are way behind. There are countless technologically outdated and poorly managed family factories crouching around Pearl River delta, Yangtze River delta, and Yellow River delta, producing more or less the same products. These factories are low in efficiency, the only advantage they have is ant-like hard working, cow-like obedient peasant workers, who work more than 10 hours a day and live life of the lowest standard, with no basic social welfare.
If calculating their wage on hourly basics, Chinese wage level is in the bottom against the world level, slightly higher than that of Vietnam. In some factories that pay by piece, workers work over 12 hours on average. In the corporation I am in, there are some women cleaners working over 10 hours everyday without saying a word, and even are grateful for receiving a bit higher wages than their counterparts in other factories. We are shocked to hear that they send 80% of their income home, because from Japanese perspective, they were supposed to manage basic consumptions with the rest 20%, not to mention there are rent and water bills to pay. Better say they are exhausting their lives away than working.
I have worked in many countries in southeast Asia, none of them are like China. Even in poor countries like Burma, it is difficult to ask workers to work overtime because they would raise many conditions; while in Philippines, people won’t take those hard work, and they are used to working one month and resting for another, resume when they spend all the salaries of last month.
China lack of skilled workers
Yesterday, there are armies of working forces waiting for job opportunities in many southern and northern cities, but skilled workers are truly rare. This is the result of the absent of long term planning and technological backing in most Chinese factories. Plenty of workers from countryside are working for this factory this year, and another the next, making shoes now, apparels to follow, no organizational management, no basic job-specific training either, industrial labor flows frequently.
Meanwhile, factories have little long term planning, they produce whatever they see as hot in the market, and workers’ skills have to adapt to the change. Most often than not, the factories will fire the present workers, and re-employ some others from labor fairs, therefore workers have few chances to improve their professional skills because most of them can not stay long enough in one technical field. The reason behind today’s labor shortage does not fall into technology, rather because there are cheap jobs everywhere in China, why should they rush south to exhaust their lives away?
Japanese may not as smart as Chinese in terms of technical development, we are not in upper hand in this field. But Japan has an elite technological industry army, matchless in the world. They have been working in relevant field for scores of years, they have made the most sophisticated products in the world with their skillful hands, which can not be taught through higher education, nor can be obtained by short term training, but by years of practicing and cultivating. Chinese have hands that are more skillful than Japanese, they had made remarkably delicate handcrafts, however the today’s working model in Chinese factories fail to provide a platform for them to develop their skills. Chinese workers flow like quick sands, they don’t have the environment to foster their techniques.
China lack of factories in scale
Most factories here are small in scale, they make similar products everywhere. If judged from Japan’s standard, these factories are workshop at best, they can not make it to the standard of industrialize production. In the Pearl River delta, China’s most intensive factory area, the annual production value of all factories can only rival with that of one large corporation in Japan. With numerous factories producing the same product, the result is that factories operate under capacity, and suffer from high product costs, thus corporations don’t have cash flow to fund technology development or support a technological development team.
At the same time, corporation don’t feel it necessary to introduce more advanced equipments due to low labor cost. In Pearl River delta, there are countless of normal corporations and workshop factories producing televisions, microwave ovens, air conditioners, refrigerators, telephones and low technology applicants of the like, but none of them can make it to the world stage; also many factories make clothes, shoes and hats, toys etc, none of them are qualified for industrialize production either.
China’s low development ability can barely reach the expectation for world factory
Those world famous corporations are often capable of independent development, they can form a complete line of development, production, marketing and service; while most factories in China are always copying or agent producing, thus they are technologically hindered by others with the highest profits in others’ palms. China’s scientific research system is almost cut off from its production system, few factories can produce their own developed products.
Inefficient management also dulls the name of world factory
The more advanced the production is, the more strict management should be, but that is not the case for China. It has times of more factories than Japan, but few of them can produce a whole set of equipment, most of which have to be imported from overseas.
You can see in Chinese factories that those relatively sophisticated equipments and exquisite parts are all imported from overseas. China doesn’t need productivity the most, but the organizing and managing ability to produce complete set of equipment, which is different from mass production in that it may take years to sell one, say, assembly line equipment, but to make profit, it is a must to organize relevant materials, factories, models, standards and a lot other complicated factors, and then precisely put them together like assembling a watch, one single managerial derangement can lead to increased cost and downgrade in performance. But China is still low in this precise organizing and managing capability. Inefficient state-owned corporations are bureaucratic in management while small factories don’t have the chances to even try. I think, if the production and management of airplanes are all handled by China, the cost will be much higher.
From my own perspective, China doesn’t not fall short in managers, what is lack of is scientific standard for selecting managers: many despicable, mean and scheming incompetent people are occupying well paid managers’ positions, and blocking the ways for competent managerial ones.
In short, China has the world’s most hard working people, but lack skillful industrial workers; it holds biggest number of factories in the world, but is short of scale corporations of world level; it can produce full array of products, but few of them are sophisticated and self developed; it has huge production power, but is unable to finish complete set of advanced production equipment.
China has a long long way to go to become a world factory in real sense, it will remain as a preliminary processing base for considerable long time in the future.