In China decoupling, companies still rely on Chinese know-how, Nikkei Asia, Mar. 17, 2023.
RYOSUKE MATSUI, Nikkei staff writer
Experienced talent tough to replace at Tesla plant and other production hubs
As more companies seek to move production away from China amid geopolitical tensions, many still find themselves depending on the expertise of Chinese workers, an invaluable resource developed in a country that has long been the "world's factory."
In late December, a Tesla plant in Fremont, California, had more than 200 engineers from the automaker's Shanghai facilities assisting in expanding production of the Model S and other electric vehicles.
Installing the new assembly lines would be impossible without their automation and machine control know-how, a source at the factory said.
Experienced Chinese workers often have crucial tacit knowledge -- expertise that can be leveraged to fix problems or improve processes but cannot easily be conveyed in a manual.
A procurement manager for a Japanese electronic parts manufacturer saw this firsthand on a visit to a contract manufacturer's factory that had been moved from China to Hanoi. The manager was surprised to find that key parts of the production process, including quality assurance, were all being watched over by Chinese engineers, providing such guidance as what to check if a particular problem arose.
"It'll take 10 years for the Vietnam [plant] to stand on its own," the manager said.
Konica Minolta's multifunction printer factory in the Malaysian state of Melaka brought in a Chinese plant manager from Guangdong province to provide instruction on assembly line improvements.
In a Nikkei survey of 100 major manufacturers, 46% cited a dearth of talent with the necessary specialized skills as a challenge in relocating operations to outside China.
Last October, Chinese President Xi Jinping stressed "talent as our primary resource" at the Communist Party congress and said China would lead the world in skilled science and technology workers.
This could become a trump card for Beijing if tensions with the U.S. escalate further. Like other vital Chinese links in knowledge "supply chains," like patents and software, losing Chinese talent would deal a heavy blow.
The U.S. approved about 50,000 H-1B visa applications, issued to highly skilled workers, for Chinese nationals in fiscal 2021 -- up around 60% from five years earlier. China was the No. 2 country of origin for workers in the program, making up 12.4% of the fiscal 2021 total -- second only to India, which got the lion's share.
Chinese universities are expected to produce some 77,000 Ph.D. graduates in STEM fields -- science, technology, engineering and math -- by 2025, roughly twice the U.S. total.
In Japan, Chinese nationals accounted for 65.5% of highly skilled foreign professionals as of the end of 2021, according to government data, up 9.3 percentage points from 2012. The tally soared roughly 60-fold over that time to just over 10,000.
Countries increasingly see this reliance as a risk. The U.S. has been cracking down on leaks of technology and sensitive information by Chinese researchers and students, even filing criminal charges in a number of cases, and tightened visa issuance over espionage fears.
Many observers argue that cultivating a more sustainable supply of talent is essential. "If we don't use measures such as scholarships to attract gifted young people, we'll fall behind," said Hiroshi Komiyama, chairman of Japan's Mitsubishi Research Institute.