A conversation on the airplanes

Last week, on an airplane from San Francisco to Pittsburgh, I sat next to Yunhan Gao, a Chinese economist who travel on his company business. After a brief conversation, I asked him about the job market in China.

He said: “Between 2000 and 2010, China gained over 6 million new jobs because foreign manufacturers opened factories there to reduce costs and increase profitability. Today, everything is changing because wages for Chinese factory workers are rising higher than other countries such as Ethiopia, Bangladesh, and Vietnam. Many manufacturers are closing their factories in China and moving to lower cost countries. With advanced technologies in automation and robotics, many manufactures companies are returning to their countries as they can build products faster, cheaper and better quality. Even Foxconn, the maker of Apple iPhones with a hundred thousand workers is moving to India and creating many jobs there.”


I asked: “Is it because India labor workers are cheaper?”

He said: “India labor workers make less than Chinese workers but not much. I think Apple needs to compete with other competitors such as Huawei, Samsung or Xiami in this market .To build the product here will give Apple some key advantages.”

He added: “Today, Chinese workers are no longer cheap like ten or twenty years ago. More young people are going to college to study Information Technology and they want better jobs. Currently, our technology industry is exploding and there are more jobs for them. Long hours and low wages workdays in a factory are the thing of the past as we are looking toward a better future. However, this transition is difficult because there are many labor workers who used to work in the factories but now without a job. There are many “lesser educated” young people in rural areas who want to work in the factory also could not find works. Each year, we graduate over eight million college students but only a small percent study Information Technology or Engineering who could find work. The rest of college graduates are having difficulty in finding a job too. If you add all of these unemployed people together, the number is very big and the problem is boiling now.”

I asked: “Then how do they solve this problem? Is there any solution?

He explained: “There are solutions but they can only solve a few problems temporarily. Many factories send workers to work in other countries but it does not solve the big problem. There are vocational training programs for young people in rural areas, but some are not effective. We are looking at several million unemployed people each year and the number keeps rising. We know that technology is one of the best solutions and currently our government invests a lot of money in top universities to encourage innovations to create jobs but it would take several years to see if it work or not. In the meantime, we are experiencing some difficulties with high unemployment.”

He asked: “We also send a lot of students to study in the U.S. How are they doing?

I told him: “There are a lot of Chinese students studying in the U.S. I believe the number is about over half million. Some do well but others are struggling to cope with the education system here.”

He seemed surprised: “Many parents sent their children to study overseas to escape the archaic education system in China. Most families spent a lot of money to prepare their children to past the American Standard Entrance Examinations, taking English lessons after school, and even pay for consultations on how to write good applications….”

I explained: “What they did was only to get their children to get accepted to a good school but they did not prepare their children on how to study in a different system where memorization to past exams does not work. There are challenges to living away from the family such as language and cultural differences, but I think the academic pressure is the most serious problem. Many students are surprised by the rigor needed to succeed, especially in top schools where competition is fierce. The “study hard, memorize more, and degree-oriented focus” model which Chinese students often follow does not fit well in a system that emphasizes the analytical process and critical thinking . Many top students who did well at home but did not do well here and they become frustrated.”

He seemed curious: “I do not hear about it. I think many parents are not aware of such a thing.”

I told him: “Of course, children never tell their parents how much they suffered or feeling stressed. They just try to cope as much as possible. Some overcame the academic pressures and eventually doing well. Others turned to cheat to pass exams, many got caught and get dismissed. In my opinion, the main issue is a lack of academic preparation as many students are not ready to leave home yet. They are not mature enough and responsible to live independently. I know that parents spent a large amount of money to invest in their children’s education. They do whatever they can to get their children to top universities, even hiring consultants to write the application for their children. However, if their children are not prepared they may not be as successful as expected.“


  • Blogs of Prof. John Vu, Carnegie Mellon University

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