The Hindu Business Line : Uncommitted workforce, a mirror image of mobile capital

Is the easy international mobility of capital-owners creating employees who simply will not commit? Studying the aspirations, fears, and beliefs of employees in China's transitional economy, Fast Boat to China says that almost everyone loses in the long run because `job pressure offshore' is no less severe than `the anxiety experienced by those onshore'.

To Thomas Friedman, as you know, The World is Flat. He warns that the exciting new world of `Globalisation 3.0' can leave you trampled if you don't keep up with it. Flattening such unfettered advocacy of free trade and cutthroat competition of Friedman, here is Andrew Ross's Fast Boat to China (www.oxfordbookstore.com). The price of accepting Friedman's thinly-veiled social Darwinism is far too high, says Ross. Almost everyone loses in the long run, he argues, because `job pressure offshore' is no less severe than `the anxiety experienced by those onshore'.

There are global alternatives to the game of free trade, insists Ross. The alternatives "come in the form of fair trade, sustainable development, and internationally recognised labour rights." However, for the alternatives to succeed, "trust, cooperation, and solidarity will have to replace zero-sum competition as the guiding spirit of our engagement with China."

Ross aims to put `a human face on the job traffic', and therefore studies `the aspirations, fears, and beliefs of employees in China's transitional economy'. He finds an appalling level of unawareness about the `challenges faced by overseas employees who are the presumed recipients of offshore job transfers'. Media attention is usually on job losses in the US; but millions of jobs have been lost in China due to `the closure, restructuring, or sale of state-owned enterprises,' and WTO (World Trade Organisation) pressures. "The creation of a vast, floating pool of unemployed — as many as 150 million, mostly farmers — poses the same kind of threat to Chinese trying to hold on to their jobs as the threat of corporate offshoring does to the US employees," says Ross.

`Scare-mongering' newspaper stories about outsourcing routinely mention the 4,00,000 engineering graduates being turned out of China's universities annually, but behind the colossal numbers is the scarce loyalty, the author discovers. Job-hopping is how the Chinese return the disrespect shown by companies to job security; a backlash, perhaps, to the ceaseless pursuit by companies of `the cheapest and most dispensable employees'. Soaring attrition rates, of up to 40 per cent, in the private sector, are `the most obvious indication of this attitude,' Ross feels. "Corporate managers are confronted with employee unreliability rather than the `flexibility' they would have preferred to see."

The author wonders if the easy international mobility of capital-owners is creating a workforce in its own mirror image: `Employees who simply will not commit'. A denouement of sorts, after the investors had been welcomed with "parade of tax holidays and exemptions, acres of virtually free land, state-of-the-art infrastructure and telecommunications, discounts on utilities and other operating costs, and soft guarantees that labour laws and environmental regulations will never be seriously implemented."

Graduate engineers look for `short work contracts, quick promotions, steep salary upgrades and managerial responsibilities well before their time,' rather than a stable career track. China is going through its version of the `Me Generation,' reflects Billy Yep, operations manager at Bearing Point, whom Ross interviews in Shanghai. Pampered by the boomtown culture of the city, its youths have lost their chance of learning `the kind of work ethic — distinguished by patience and loyalty — that is favoured by most employers'.

Paradoxically, though, the `self-seeking individuals' can be lacking in personal initiative. "The Chinese think collectively. They have no concept of personal space," frets Mark Cavicchia, managing director of everse, an LA-based software developer with offshore sites in Shanghai and Bangalore. The Chinese are not up to thinking outside the box, laments Ramesh Govindan, `a technology manager at a US multinational,' whose job is to effect knowledge transfer to local employees. "You tell them to do something and they will do a good job, but they are not likely to deviate from those instructions. In high tech, you are supposed to exploit the technology, to stretch the limit. You need to say, `It's taking me ten steps to do this, can I do it in five steps?' You probably don't see that happening in Chinese technicians... "

Suggested read before you take the fast boat!

THE SPIDER'S WEB

China, again, is the focus of Will Hutton's The Writing on the Wall. Behind the giddy growth of the economy, the author sees something complex in the Dragon Land. "The party-state is at the centre of a spider's web of control. Political direction is matched by direct control of those parts of the economy that the party considers strategic - telecommunications, energy, transport, iron, steel and metal production, automobiles, etc," writes Hutton.

He sees evidence of `the spider's web' all around. "This control is locking China into a low-productivity, low-innovation economy with a disproportionate number of small-scale enterprises." China's performance on the `Business Competitiveness Index' is worse than that of Brazil and India, the author highlights.

"Bureaucrats and party officials make the decisions not only for the medium-and large-scale SOEs (state owned enterprises) they control directly, but also for large private companies." Distressingly, almost no private company, however well run, wants to leave `the opaque, informal world of guanxi personal relationships in which the main aim is to hide revenue, cash and profits from outsiders' eyes,' as an interviewee tells the author. "Only 1 per cent of private Chinese companies subject themselves to independent audit... only then because they want a listing. The vast majority focus on staying below the radar, under-reporting their sales and over-invoicing abroad to keep money overseas or simply... running even large companies from the `cash box in the back of the Mercedes'."

There are three sets of accounts, one learns: `One for the banks, one for the tax authorities, and one for the management.' Outsiders can never believe what they are told, so banks lend only on the basis of hard collateral, narrates Hutton. "Most private firms do not last long; the average duration is about three years. The law of the jungle prevails; you do what you can get away with... "

Pack this for the summer getaway.

People on the move

Sadly, some getaways end in tragedy, as in the case of 58 Chinese people discovered dead by the UK Customs officers in the back of a container lorry in June 2000. "On one of Europe's hottest summer days, the truck's cooling system was turned off, leaving its human cargo to be slowly asphyxiated. According to the two survivors, the victims shouted and clawed at the sides of the containers as they suffocated on their macabre ferry journey from the Belgian port of Zeebrugge." Thus narrates Philippe Legrain in Immigrants: Your Country Needs Them.

"The ill-fated Chinese had travelled for four months from Fujian province, via Moscow and the Czech mountains. They were heading for restaurants in London's Chinatown, where there is a shortage of workers because the British-born children of Chinese immigrants prefer to go to university. But although those 58 died, many more keep coming."

Legrain observes that migrants from poor countries are flocking to `a handful of rich countries with low birth rates'. In rich countries, one in twelve people is now an immigrant. Immigrants constitute more than a tenth of the population of Australia, Canada, France, Germany, the Netherlands, Saudi Arabia and the US. A hot study list to greet May with.

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