WEDNESDAY, FEBRUARY 18, 2004
Japanese capital and jobs flowing to China
SHANGHAI: The qualms are gone. Now even Japan 's pride and joy, its top-end electronics manufacturers, are coming to China . They are building immense new plants and research centers here to take advantage of abundant Chinese labour, doing nearly every kind of job their Japanese work force does. Cost pressures are driving them to forget old fears of having their best technology stolen or of harsh publicity at home from moving high-paying jobs out of the country.
"We hesitated in the past, but we cannot say that any more," said Hiroyuki Mineta, chairman of the Pioneer Corporation's Shanghai subsidiary, as he stood on the factory floor where hundreds of Chinese workers were building 11 types of DVD recorders. "We have to overcome our fear or we won't be able to survive in the market."
Unlike the first generation of Japanese factories in China, which cranked out routine products like washing machines, air-conditioners and stereos for sale mainly in China and neighbouring countries, the Pioneer plant in the Comprehensive Industrial Development Zone, an hour's drive south of central Shanghai, assembles the company's most advanced consumer products and ships them to Europe, North America and even to Japan.
In an office tower across the river from the city centre in the Pudong new area, Hiroshi Matsuo of Sharp says that his company, too, is getting over its squeamishness.
Like NEC, Toshiba and others, Sharp is actively recruiting Chinese engineers for its newly opened research and development laboratories here.
For the moment, they will work only on goods intended for sale locally. Matsuo said that the company's Japanese engineers are still better at designing the main components that distinguish electronic products. But Sharp's Chinese engineers, who are paid only one-quarter of what Japanese make, are closing the talent gap.
"Our top management is afraid of exporting brain jobs to China ," Matsuo said. "But comparing Chinese and Japanese engineers on a cost-performance basis, Chinese are superior. They are hungrier. Most Japanese are no longer hungry."
Japan poured some $4.2 billion directly into factories and other operations in China in 2002, according to the Japan External Trade Organisation, and the electronics industry accounted for more than 40 per cent of manufacturers' capital. Japanese firms now do about one-sixth of their manufacturing abroad and China will remain the focus of such work, the experts say.
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