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Economy

China no longer has time for Japanese craftsmanship

Number of new positions for Japanese expats falls by 30% in March

Workers toil under a banner urging safety at a Japanese factory in Dalian, China.

TOKYO -- The number of new positions for Japanese staff at Japanese companies in China dropped 30% on the year in March, falling victim to a new visa policy prioritizing young, tech-savvy workers over old, dependable foremen.

The decrease, shown by data compiled by Tokyo-based job placement company Recruit Holdings, follows the introduction of a new, points-based work permit system on April 1 that takes into account factors such as age, academic qualifications, annual compensation and language fluency.

Even if they are needed in China, many Japanese applicants find it difficult to meet the requirements. Typically needed workers are people who can run factories, keep production going and deal with glitches on the shop floor.

Many Japanese companies still put a great deal of emphasis on good old-fashioned expertise, know how, and the craftsmanship aspect of production. Chinese policymakers, however, seem to have little time for the old ways.

"We will make a big push to develop advanced manufacturing, thus moving toward mid- and high-end manufacturing," declared Chinese Premier Li Keqiang before the National People's Congress in March. "We will intensify efforts to implement the 'Made in China 2025' initiative, promote accelerated application of big data, cloud computing, and the internet of things."

Japanese companies at least say they are getting Beijing's message.

Mighty Corp., an electric wire maker based in western Japan, says it is training local staff so that their plant in Dongguan, southern China, can operate solely with local supervision. "If Japanese staff are needed, then we will have someone get a work permit in Hong Kong and have them travel to Dongguan as necessary," said Masaki Watanabe, a company official.

The number of Japanese working in China has been on the wane since reaching a peak of 83,000 in 2012. As of October 2015, the number stood at 72,680, and could go down even further with the new permit system now in place.

The drop is partly due to localization of operations at Japanese companies. 

"The business model for China is changing," says Hiroki Tachibana, president of RGF HR Agent China, a Recruit Holdings unit. Japanese companies used to produce in China for export. Nowadays, they manufacture for the Chinese market, requiring more local staff. 

Still, development economists say that the new policy may be a double-edged sword.

A more onerous system could "push more Japanese companies to move into Southeast Asia and away from China," says Kenichi Ohno, professor at the National Graduate Institute for Policy Studies in Tokyo. He notes that companies in places like Vietnam are much keener to learn from older Japanese engineers.

China may have become the world's second largest economy, but it "still has a lot to learn about manufacturing," Ohno said.

A strong manufacturing base is also crucial for the country's economic stability. "The IT sector alone cannot keep China's one billion people at work," he said. "It needs to create more jobs in the services and manufacturing sectors for hundreds of millions of people who are still farming."

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