penny pinching - Japanese companies pay their workers low wages and their shareholders lower returns. Where is the money going !!!!!!!!!

Asian firms lag their western counterparts in respecting their employees' welfare and dignity. Asian firms tend to follow a very hierarchical structure, which by itself is not too bad, since many western firms have similar structures. But in Asian firms people tend to evaluate other people and themselves purely based on their ranks, which causes a lot of anxiety and frustration.

In a sense, this Confucian tendency causes many problems facing East Asians today. From the high suicide rates in Japan, Korea, and China, to the low fertility rates in these countries. From the over-emphasis on education and degrees and school brands to the long work hours, etc.

@Pieter Schaaij, shame on you! This forum is for rational discussions, not racist slurs.

The problem is that the labor market in China is ill suited for more skilled manufacturing work, because alot of the Chinese labor force move around alot. The manager's just don't have the time to train them. Thailand actually is not cheaper than China, it is actually more expensive. The difference is the Thai Labor force does not move around as much, usually remaining in on plant for 4-5 years. They might not be as hard working as the Chinese, but are usually more skilled, because they actually spent 4-5 years on the job as opposed to 1-2 years.

bismarck111 wrote: Jul 11th 2010 12:40 GMT The problem is that the labor market in China is ill suited for more skilled manufacturing work, because alot of the Chinese labor force move around alot. The manager's just don't have the time to train them. Thailand actually is not cheaper than China, it is actually more expensive. The difference is the Thai Labor force does not move around as much, usually remaining in on plant for 4-5 years. They might not be as hard working as the Chinese, but are usually more skilled, because they actually spent 4-5 years on the job as opposed to 1-2 years.
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To some extent yes, to some extent no,
let me expound...
The factories in China tend to bunch together. i.e. in Zhejiang province you may have one town haveing a dozen factory making doors for pretty much all of China's Security doors and another they make 1/2 world's supply of bed sheets. literally. I am not joking.

I think in those situations the skills and the know hows are certainly preserved, if not multiplied, even if the 1-2 year novice gets another job at another factory.

I have worked both in the Japanese Public School System, and for a Japanese manufacturer in the United States. I've toured both Japanese/Chinese Joint-owned manufacturers in China, and Chinese-owned manufacturers in China. While I don't pretend to know all of the circumstances and nuances and situations on a plant-to-plant or company-by-company basis, I can certainly offer the following:

1. Some of the blanket statements ("All Japanese companies treat their workers like ____________") are grossly broad and, it appears, come from uniformed viewpoints or are based on stereotypes rather than experience.

2. While the observation -- made in the article-proper -- that there can be frustration from employees & managers "on the ground" in China due to less managerial autonomy among Japanese companies, vis a vis, say, their North American or EU counterparts is not an incorrect one, this situation is not unique to China; managers, clients and affiliated companies in the U.S. and Canada, and in the EU, have been dealing and working with this general Japanese Way for decades. It's not without its frustrations for all sides, but it's rarely presented a style-of-doing-things difference that has brought an operation to its knees.

3. While I can't speak for other nationalities, American workers tend to enjoy working in Japanese plants in the U.S. The uniforms take some getting used to by some "independently-minded" Americans, but competitive wages and the consensus-building style and welcoming of input from production line workers (Demming/TCM comes back to America . . . via Japan) is like a breath of fresh air to many Americans used to, but fed up with, "just taking orders" from management. Especially in the South, where Unions have never enjoyed a strong foothold.

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Typo: I should have written "TQM" -- Total Quality Management -- in the preceding Comment, not "TCM." Mea culpa.

I am pretty impressed by the victimization of big foreign firms, by underpaid workers asking for pay increases.

Yeah, Economist, good job, is this another "only happens for China" thinggie?

Japanese firms are here in China to stay. They had their problems in USA and Europe and they solved these. They will find a way to work with Chinese workers.

The maket demand is clearly there. Japanese brands enjoy very high prestige in Chinese market. They can "afford" to adjust.

Japanese managers understand Chinese better than many Chinese themselves. I worked with Dentsu and Hakuhodo executives on some engagements and they are brilliant. The sweat shops and assembly plants might have some issues and might move to other more tolerant places. However, I see drastically more trade between China, Japan, Korea and Taiwan in the next 10 years, if not longer.