Trouble at China´s labor market - Victor Shih

Victor Shih

Graduates have this year a hard time to find good jobs, even in a labor market that shows huge shortages in other parts. High quality jobs are hard to get in China, tells associate professor Victor Shih in the New York Times.

The New York Times:

Among the most worried are university graduates. This year, nearly 7.5 million people graduated from universities in China, a 3 percent increase over last year. 

“The difficulty of finding employment in 2015 is still relatively high,” said Zhang Feng, director of the career center of the Ministry of Education, according to an article on the ministry’s news site. “Both the central and local economies’ growth rates have entered the ‘new normal.’” 

Victor Shih, a political economist at the University of California, San Diego, said the slowdown exacerbated worrisome trends in the job market. 

“Highly paid professional jobs have been scarce for several years now,” he said, “and many young graduates have depended on their parents’ connections to obtain entry positions in the government or state-owned enterprises. The current downturn will hit graduates without strong connections or specialized skills.”

More in the New York Times.

Victor Shih is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´ request form.

Are you looking for more political experts at the China Speakers Bureau? Do check out this list.

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Weak labor market can threaten social stability - Shaun Rein

+Shaun Rein 

China´s economy entered a downward trend in February. And while a lower economic growth might still be alright, the real danger lies in a weaker labor market and pressure on social stability, says business analyst Shaun Rein in the Voice of America.

The Voice of America:

“So starting in February the economy has been on a major downward trend, much more so than many economists realize," said Shaun Rein, head of China Market Research. "And the decline is really focused on unemployment, not so much GDP growth, which I think is really an ok number. But what you’re seeing in the factory area is some of the smaller and weaker factories having to squeeze margins." 

Rein added China’s labor markets are weakening in both urban and rural areas among blue and white collar workers, which could threaten social stability. Although many of those participating in the labor protests have been detained, few have been criminally prosecuted.

More in the Voice of America.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´ request form.

Are you interested in more stories by Shaun Rein? Check out this regularly updated list.  

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Labor conditions improve fast - Sara Hsu

+Sara Hsu 

China´s labor conditions were notoriously bad, but the shift to higher-skilled, younger laborers, and better legislation has changed the country profoundly, writes urbanization expert Sara Hsu in the Diplomat. Although, there is still room for more improvement.

Sara Hsu:

Workers appear to be more and more amenable to protesting poor conditions. Manfred Elfstrom and Sarosh Kuruvilla (2014) show that strikes have risen since 2008, and become increasingly offensive strikes in favor of better wages and working conditions, rather than defensive strikes against employer actions such as layoffs. This is in part a result of the Labor Contract Law of 2008, which extended protection of employees of at least ten years standing, prompting companies to improve capital-labor relations to some degree. Wages have risen since 2008, with wages highest in Beijing, Shanghai and Tianjun at around $2.60 per hour. 

Labor supply and labor demand have also changed, altering the structure of the labor market. Intermittent labor shortages for labor-intensive jobs on the east coast have induced firms to move inland to access cheaper rural labor, and have tightened labor markets in labor-intensive manufacturing across the country. The working age population is also continuing to decline, which further reduces the low-skilled labor supply. At the same time, there is an oversupply of educated workers as increasing numbers of high school graduates go on to obtain university degrees, and shortages of vocationally skilled workers in middle-wage service sectors such as education. In response, the government is attempting to promote vocational schools, and has set a target of having 38.3 million students enrolled in vocational schools by 2020, an increase of about 9 million over the current enrollment levels. By contrast, the 2020 target for enrollment in higher education, such as four-year colleges, is 36 million. 

University graduates, who often become white collar workers, have graduated to a new set of working conditions: underemployment, crowded living conditions, and low pay. The term “ant tribe” was coined several years ago to describe the many graduates who could not find suitable jobs and were forced to live with several roommates and work in subpar jobs at low wages. The types of jobs that are increasingly available are service sector jobs that cater to the domestic population. Many of these jobs are low-level positions that do not pay well. More investment and regulatory changes will be needed to reform medium and high-skilled services sectors such as finance and communications to generate jobs. Serious service-sector growth hinges on the success of more sophisticated skill and technology-intensive service industries. Currently, competition for well-paying, higher-skilled jobs is high. Increasing investment and competition would initiate reform in these sectors similar to reform measures imposed on the manufacturing sector in the nineties. In this way, both four-year college graduates and vocational school graduates would be able to obtain better paying jobs. Once this is accomplished, the modern Chinese employee may truly have less to protest.

More in the Diplomat.

Sara Hsu is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers´ request form.

Are you interested in more stories by Sara Hsu? Do check out this regularly updated list.  

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Labor costs put pressure on productivity of workers - Shaun Rein

Shaun Rein

Wages have been rising fast in China, and companies are struggling to improve productivity of their workers to remain competitive. There is still much to win, says business analyst Shaun Rein, author of The End of Copycat China: The Rise of Creativity, Innovation, and Individualism in Asia in Business Week.

Business Week:

 (Hong Kong´s) TAL is one of several companies trying to squeeze more productivity from its Chinese workforce. The effort by factory operators in industries such as apparel, toys, and electronics is largely a response to rising labor costs. According to the National Bureau of Statistics of China, urban manufacturing wages rose 73 percent from 2009 to 2013, the latest year for which data is available. “You can’t waste labor, because wages are too high now,” says Shaun Rein, managing director of Shanghai-based China Market Research and author of The End of Copycat China. “The typical Chinese worker is about a quarter as efficient as a German or an American factory worker,” he says. For companies looking to boost productivity, Rein says, “there’s a lot of low-hanging fruit,” such as investing in worker training and automation.

 More in Business Week.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´ request form.

Are you looking for more stories by Shaun Rein? Check out this regularly updated list.

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The painful shift from cheap labor to high consumption - Victor Shih

Victor Shih

China's economy is changing from cheap labor and export to domestic consumption. But the move away for wasteful investments is not an easy one, tells political and financial analyst Victor Shih in The Guardian.

The Guardian:

"The liberalised labour market contributed to high exports, which subsidised this extremely wasteful investment by the Chinese government," said Victor Shih of Northwestern University in Chicago. "Now China's trade surplus is shrinking, and shrinking much faster than a lot of people had anticipated." 

It has been hit by European and US woes, and its growing demand for food and oil must be met largely through imports. "The ability of net exports to subsidise wasteful investment will diminish – perhaps quite rapidly. That will create a big challenge for the Chinese government in the coming two to three years," said Shih. "It will take a few more years before consumption becomes the dominant factor to fuel China's growth."

More in The Guardian

Victor Shih is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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The repositioning of China's labor market - Zhang Juwei

Zhang Juwei

Cheap factory labor is phasing out in China, but the country has new assets to offer in terms of labor, says Zhang Juwei, deputy director at the Chinese Academy of Social Science (CASS) in the China Daily. Now, high-qualify labor for a lower price might offer just that opportunity.

The China Daily:

According to Zhang Juwei, deputy director of the Institute of Population and Labor Economicsunder the Chinese Academy of Social Sciences, China's work force is now attracting overseasenterprises because of its performance-cost ratio rather than just its low cost. "It is the relativelylower cost of higher-quality labor rather than purely the low cost of labor that attracts foreigncompanies now," he said. 

This is because China's labor market does not offer enough positions for graduates; so withsupply exceeding demand their starting salaries are not much higher than those without college diplomas, he said.... 

"China needs to seize the opportunity to redefine its position in the global industrial chain, andattract more professional jobs rather than low-paid manufacturing jobs for its laborers," said Zhang.

More in The China Daily.

Zhang Juwei is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.  

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Time to improve the lot of workers - Zhang Lijia

Zhang Lijia

Many signs show that the lives of workers in China are improving, financially and otherwise. About time, writes former rocket-factory worker Zhang Lijia in The Guardian. Time for the former "Masters of the Nation" to gain some benefits.

Zhang Lijia:

When I became a worker at a rocket factory back in 1980, aged 16, workers enjoyed cradle-to-grave social welfare and a much higher status. We were hailed as "the masters of the nation". 

During the free-market era, the state-owned factories laid off excess workers. Those who kept their jobs complained about low salaries, rising labour intensity and the lack of job security. But they are generally better off than workers in the private sector, which now employs 70% of the workforce. The employees at Foxconn worked up to 16 hours a day, in silence (talking was forbidden), with only a few minutes for toilet breaks. Socialism's "masters of the nation" have been reduced to cheap commodities in this cold-hearted capitalism. 

Many of the harshest factories – often foreign owned – are staffed by migrant workers. According to some estimates, they make up more than half of the 300-million-strong factory workforce. Although they fuel China's economic miracle, they do not benefit from it... 

In 2010, 500 workers from a Japanese company's plant staged a strike in the city of Foshan in southern China, demanding not only a pay rise but also their own union. The strikers invited Chang Kai, an expert in labour relations from Renmin University, to participate in the negotiations, which resulted in a 35% pay raise. 

"The new generation of workers is more aware of the power of collective bargaining," says Professor Chang Kai in an interview with me in Beijing. He predicts that the Honda strike signals the end of China's era of cheap manufacturing. 

The young workers also have much higher aspirations when they come to the city. They are not content just to feed their stomachs; they want to build a future. And they are more willing to put up a fight.

More in The Guardian

Zhang Lijia is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers' request form.

More on Zhang Lijia and China's moral crisis at Storify.

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Labor shortage hits white collar jobs - Shaun Rein

Shaun Rein

China's factories are running out of labor already for years, but now also companies looking for white-collar workers have a hard time to fill in the fast-growing number of vacancies, tells business analyst Shaun Rein in BusinessWeek. And wages go up fast.

Business Week:

The labor shortage isn’t limited to factory workers. Workers for desk jobs are also in short supply. “There just aren’t enough people,” says Shaun Rein, managing director of Shanghai-based market research firm CMR China and author of the new book The End of Cheap China. Rein points to announced plans by Citigroup,Microsoft, Google, and others to boost their number of workers in China. “That’s creating a huge fight for white-collar workers,” he says. “Salaries are soaring.”

 More in Business Week.


Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Social unrest in China: mostly an Asian affair? - Bill Dodson

Bill Dodson

Bill Dodson has been writing extensively about social unrest in China and what it means for foreign companies. In his weblog he focuses on the fact that most strikes have been at factories owned by Japanese, Taiwanese and some Hongkongnese. Some observations.

One of the interesting points I turned up in my research for the report was the overwhelming number of companies at which workers are staging proletariat-style revolts are Asian: Taiwanese and Japanese, mainly, with some Hong Kong investors I suspect are predominantly Chinese Mainlanders “round-tripping”; that is, setting up HK investment vehicles to re-invest in the Mainland as foreign companies: helps in reducing local tax burdens and makes it easier to get their income out of China.

I’ve always been of the mind Asian investors tend to treat their employees as liabilities, disposable; while Western companies invested for the long-term in China tend to treat their staff as assets to take care of and encourage. People don’t like being treated as liabilities. Of course, their are exceptions in both camps; however, I’ve found few exceptions over the years.

More at Bill Dodson's weblog

Bill Dodson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch.

Living as a migrant worker "Are we too dirty?" - Tricia Wang

Tricia Wang

Sociologist Tricia Wang is trying to blend in as a migrant working in Wuhan and reports on her weblog about her experiences. "Are we too dirty for your eyes?"

When we sat down on the empty seat, I accidentally lightly brushed my backpack against the man sitting to my left. I immediately apologized.  But he didn't respond, he just looked alarmed that I had touched him and gave me a glaring look that told me immediately that I shouldn't even be sitting near him. He wiped off the part of his arm that my bag had brushed as if I had dumped dirt on his suit.

His action alone made me super conscious of my physical condition -  the dirt on my toes, my oily face, and my blackened clothing from working with food vendors. I hadn't showered in two days and that's all I kept thinking after he looked at me.  I glanced around around and saw people staring at us. I immediately made a boundary in my head and called them "city people." As Yang Jie kept talking, I kept noticing the "city people" in their daily showered bodies, freshly washed clothing, and dirt-free toes.

I then received a text message so I pulled my phone out. I immediately noticed the man next to me look at me curiously - he saw that I not only had a smartphone, but probably what looked like a real iphone (it is a real iphone). I texted back to my friend in English, and this is when he became super aware that something was off - it's hard to explain the look on his face, but he just kept looking over my shoulder as if his eyeballs were going to pop out. He then looked at  Yang Jie up and down and then at me up and down.

The more he looked, the more I just glared at him and the more upset I became. I wanted to say out loud, "what are you looking at? Do you have a problem? Aren't we too dirty for your eyes?"  But I was with Yang Jie and I didn't want to make a scene. I'm sure she receives this kind of treatment every day and she has learned to ignore it. It angered me that I could feel his judgement seeping onto me, and I could feel that the minute he saw me texting in English his level of disdain at me decrease. Texting in English in combination with owning an iphone are signifiers of an education and he picked up on it immediately.

More, including a fast growing number of comments, at Tricia Wang's weblog.

Tricia Wang is a speaker at the China Speakers Bureau. When you need her at your meeting or conference, do get in touch.

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Roubini's phantom facts on China - Shaun Rein

Nouriel Roubini via Wikipedia

Famous economist Nouriel Roubini took a fast train from Shanghai to Hangzhou and saw it was almost empty. Shaun Rein explains him in Forbes why one train ride is not enough to predict a bubble in China that will pop in 2013.

Shaun Rein:

He has been quoted by Reuters as saying, "'I was recently in Shanghai and I took their high-speed train to Hangzhou,' referring to the new Maglev line that has cut traveling time between the two cities from four hours to less than one. 'The brand new high-speed train is half-empty and the brand new station is three-quarters empty. Parallel to that train line, there is also a new highway that looked three-quarters empty. Next to the train station is also the new local airport of Shanghai and you can fly to Hangzhou,' he said. 'There is no rationale for a country at that level of economic development to have not just duplication but triplication of those infrastructure projects.'"...

However, most of Roubini's conclusions are based on phantom facts, as is his evidence for why China will have economic problems. There is no direct flight between Shanghai and Hangzhou, nor is there a maglev train system connecting the two cities. Shanghai has two, not three, airports, and the last new one opened a dozen years ago, in 1999. Both the Hongqiao and Pudong airports have been adding runways and terminals because the airports are too crowded, contrary to Roubini's suggestions of emptiness. Pudong's passenger and cargo traffic grew 27% in 2010, to 40.6 million passengers. It is now the third busiest airport in the world in terms of freight traffic, with 3,227,914 metric tons handled every year...

China is not immune to economic cycles. It will definitely go through rough patches in the coming years, and housing prices may in fact fall. Despite a relatively efficient bureaucracy, no government can stave off market forces forever, and problems are starting to arise. However, the headwinds are coming from raging inflation, a shrinking labor pool and a weak education system, not from over-construction in infrastructure spending, as Roubini argues. It is important that analysts use real, not phantom, data points to draw conclusions about China.

More in Forbes.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? D

Shaun Rein

o get in touch.

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China's unruly workforce - Shaun Rein

Shaun Rein by Fantake via Flickr

Common complaints?  “Overly confident”, “spoilt”, “mercenary”, “and disloyal” employees. Shaun Rein looks in CNBC at one of the largest problems for foreign companies in China: the lack of a loyal labor force.

"Mama Mia," the GM of an Italian company lamented to me over lunch in Shanghai, "The corruption I can deal with, but human resource issues are driving me insane. Workers are too short-term focused – 50 percent leave within two months no matter how much money and training we give."

Every year the shortage of workers increases and getting enough labor is the nightmare of many employers. Shaun Rein:

An entire generation of younger employees constantly leaves jobs when the going gets tough or when they are dangled a minor salary increase. It is not uncommon for younger workers to have 5 jobs in 5 years. The result for the country is far too many over-confident, under-trained and spoilt 20-somethings.

What happens if these young workers never fulfill their increasingly unrealistic ambitions? What happens to China if it never gets properly trained managers in place? These are serious issues China’s society as a whole needs to address...

If the situation is not fixed, perhaps that Italian GM will join a growing list of companies shifting investment out of China to sunnier investment climates.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch.

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The fading line between graduates and migrant workers - Zhang Juwei

Zhang Juwei

More graduates take up jobs that do not require education, while more migrant workers have a college education, tells professor Zhang Juwei of the Academy of Social Sciences in Beijing in PhBeta. "Demand and supply of the labor market are imbalanced.

“The largest group of graduates who’ve taken up jobs that do not require a college diploma has grow to be blue-collar workers,” says Zhang, who has been studying the labor difficulties in the country for a lengthy time. “Many other graduates have entered simple service sectors like security and housekeeping.”
Disproportionate availability of jobs across industries is the prime trigger of the trend, he says. The number of students graduating from colleges multiplied from 3.3 million in 2005 to 5.59 million in 2008. The graduates typically are employed in service sectors and function at office.

Zhang says the country’s relatively backward economic structure and inferior position in the world industrial chain is the trigger of this imbalance. China’s economic growth has relied heavily on the second industry(manufacturing and construction), which accounts for about half of the total economic output, while the tertiary industry accounts for only about 40 percent, significantly lower than in most developed countries.

Besides, China is still downstream in the global industrial chain, which deprives it of creating numerous jobs. “Many job opportunities including designing, analysis and development, and marketplaceing appeal to and will need individuals with higher qualifications but they’re not properly or adequately distributed in China, for several goods produced here are designed abroad.”

Take iPhone for instance. While foreign designers and researchers function out the best way to add value to the product and attract far more customers, Chinese workers only assemble and package them. That is why college graduates might have fewer opportunities in China than abroad. Having compared Chinese and foreign college graduates, Zhang discovered that much less than 3 percent of the country’s graduates are likely to begin their own business compared with 20 percent in developed countries. That dries up a lot of job opportunities, due to the fact if one individual starts a business, he/she could provide employment to numerous other people.

More in PhBeta.

Zhang Juwei is a speaker at the China Speakers Bureau. When you need him at your meeting or conference, do get in touch.

Graduate unemployment a temporary problem - Zhang Juwei

Zhang Juwei by Fantake via Flickr

China export industry might be suffering from labor shortage, but its large number of university graduates find it hard to get a job. A temporary problem, says deputy director Zhang Juwei of the Chinese Academy of Social Sciences (CASS) in Business Week, although he is not underestimating the current problem.
In Business Week:

Already, the government is claiming a small victory of sorts, with the Education Ministry announcing recently that the rate of employment for recent graduates rose from 68 percent in 2009 to 72.2 percent this year. "As the economic structure changes, more suitable jobs for graduates will be created," says Zhang Juwei, deputy director at the Institute of Population and Labor Economics at the Chinese Academy of Social Sciences. Although Zhang may be right, that scenario is little comfort to the more than 25 percent of recent grads still hunting for work.

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Zhang Juwei is a speaker at the China Speakers Bureau. Do you want to share his insights at your conference or meeting? Do get in touch.

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'Black children' a rural myth - Zhang Juwei

Zhang Juwei  by Fantake via Flickr

For a long time the existence of 'black children' at China's country side- offspring outside the country's one-child policy and not accounted for in its statistics - were seen as an illegal but useful counter measure for the aging problem and the shortage of cheap labor. But the rural fertility rate is not as high as many hope for, tells CASS-director Zhang Juwei in The Economist. 
The Economist:

The recent CASS report said the rate that would be expected if women had exactly as many children as allowed would be 1.47. The government uses the higher figure believing that many “black children” were missed by censuses. But the report disagreed, saying such serious underreporting was unlikely. It said data showed that the 150m-strong migrant population has a fertility rate of only 1.14 (similar to that of registered urban residents). This belies the common image of migrants as big producers of unauthorised offspring. Zhang Juwei of CASS believes the overall fertility rate is no higher than 1.6.

China cannot avoid its looming ageing problem, but these lower fertility estimates suggest its impact could be greater than officials have bargained for. The CASS study calls for a “prompt” change of policy to get the fertility rate up to around the “replacement level” of 2.1. The problem could be in persuading Chinese to have more children. In cities and wealthier rural areas, surveys found that the number of babies women said they actually wanted would produce a fertility rate well below 1.47.

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Zhang Juwei is a speaker at the China Speakers Bureau. Do you want to share his insights at your meeting or conference? Do get in touch.

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China's trade union has been very quiet

the ACFTU family hotel

Since last year I have been following the developments of China's only allowed trade union, the All-China Federation of Trade Unions (ACFTU) quite closely. Under orders from the central government this collection of tea-drinking government officials were forced out of their offices as a part of the effort to make the society more harmonious.
Well, the migrant workers got some attention and especially the efforts to organize trade union branches at foreign companies in China got a lot of interest. Also internationally foreign trade unions watched breathless as their Chinese brethren organized Wal-Mart. Also were people from the ACFTU very active in organizing the discussion around the new labor contract law.
The question was then and still is whether this is a real change that might push the ACFTU into the direction of a real trade union, or whether it is some window dressing that will disappear when a new show has to take the stage. At least a part of the ACFTU-officials is rather enthusiastic about the new direction their organization has taken.
But since a few months, they seem to have fallen off my online radar screen. Media do not mention the ACFTU anymore and there is certainly a move back to the previous tea-drinking activities.
The question now is whether this is a temporary move ahead of the upcoming party conference in October, or whether the issue of labor issues has definitively fallen off the agenda of the central government.
The overload of priorities has already led to painful choices and for example the environment has drastically dropped on the list of priorities. Labor issues might as well be the next victim in the permanent push-and-pull between the central government and other governmental power brokers.

A not-so harmonious society - a book plan

When I finished some years ago my book on "The wild East. 15 misunderstandings on China and the Chinese" (only in Dutch and German, you see here the German cover) I vowed I would never write a book again. Not only did I find writing a book a gruesome lonely boring process that did not fit my character, it seemingly offered little advantages. Unless you have a Harry Potter it is certainly not a way to make a living and getting that little bit of money actually paid by European publishers is tougher than getting money out of a Chinese company.

The number of people that actually buy your book is, compared to the impact of activities like this weblog, very low.

What is nice is that in a book you can actually build up an argument, make a point, often better than in short internet entries. And there is of course the vanity factor: publishers know that people love to have a book on their name, even if it does not pay the bills. Some publishing houses actually let authors paid to make maximum use of this vanity factor.

Of course, vanity is no issue for me :-). But this week I had two conversations with publishers who gently pushed me to give the idea of a book a thought. And then without wanting it, the thought-process was triggered off.

Now, by accident I have also been writing a proposal to write a client report for an HR-company on labor issues and these two lines came together this week. The famous labor contract law and the trade union activities at Wal-Mart are both part of Hu Jintao's "Harmonious Society" and so I thought, tying up other elements of Hu's drive for this harmonious society might actually be a good concept for a book. When this client-report works out, I might already have a nice basis.

What is helping too is my current work at Chinabiz Speakers. Maybe few authors can make a living by writing books, but when you can be linked up with a professional speaking circuit, that does make a difference. Selling speakers who have some books on their name proves also to be easier.

Let's ponder a bit.

Strike hits German firm in Shenzhen

Chinese media report that over 5,000 employees, mostly female migrant workers, started a strike at a German producer of mobile phone components, Feihuang Electronic Factory at Shenzhen. The strike started at the evening of August 22 as a protest against proloning work hours and lowering wages, writes the China Tech News.

According to the workers, from last month on, the factory asked each of them to make 90 more chargers every hour and if they could not finish the task they needed to work extra hours, or they would not get the basic salary. From the evening of August 22 on, about 5000 workers began their strike and some of them reportedly broke into the facilities of the factory.

The factory has about 10,000 workers in total.

What did Mattel do to stop the toys? - the WTO column

Do not get me wrong. All the upheaval about the millions recalled toys and other quality-related issues regarding products from China is long overdue. Even a hundred TV-shows cannot hide that something is seriously wrong in the way quality control is done in this country. And yes, there is now a fair amount of China-bashing going on, but that is very well deserved China-bashing.

But the question what Mattel, and other companies, have been doing to stop this scandalous export of faulty products is a question that is all too easy ignored. Of course it is awful that millions of American children might be in danger when they bite on their toys, but has anybody already looked after the thousands of Chinese workers who have been painting those toys? They must have been exposed to much higher dangerous levels of lead than any of the children involved.

Quality and quality control ask for a comprehensive approach. When there is no guarantee that the working conditions at the suppliers are not adequate, the end products are also at risk, as we see now. Unfortunately, and it has been argued here and here over and over again, the strategy of policing your Chinese suppliers has been declared bankrupt. It is failing, has been failing for a long time, and might never have worked really well.

In the light of that discussion it is shocking to see that Mattel get almost the role of a victim, in stead of that of at least a fellow conspirator.

I do not want to follow this line and put also a part of the blame with the consumer, who has been more than happy to get nice products for an every cheaper price. It is the task of the producers, Chinese and others, to make sure their workers and their consumers do not get hurt in the process. The Mattel-recall should be an opportunity to get safer products, both for the consumers and the Chinese workers.

That is most likely against a higher price, but that price the consumers should be willing to pay.

Fons Tuinstra

The qualified staff crisis

China's dazzling economic growth might get off track because of the dramatic shortage of qualified staff, the Economist quantifies. The shortfall: 2,200 new pilots a year. China has fewer lawyers than California. China is short of 160,000 GP's. About 75,000 new business leaders are needed in China in the coming ten years.
And the good people are still running away:

China is even suffering from something of a brain drain. In recent years the Chinese have been able to travel abroad more freely to study and acquire skills. But many do not return. A recent report by the Chinese Academy of Social Sciences found that between 1978 and 2006, just over 1m Chinese went to study overseas and some 70% of them did not go back. The brightest are often tempted to stay abroad by local employers, because the competition for jobs has become global.

The article says that pay-rates for senior staff in many parts of Asia are higher than for similar jobs in Europe. I have seen no evidence of that (and the Economist just states this as a fact) and until recently at least in China MBA-graduates with some experience earned much less than in Europe and the US.
Much more at the Economist.