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By Kazunori Takada
DONGGUAN, China, April 17 Their technical skills
helped Japan's corporate giants sweep all before them in the
1980s, and now thousands of ageing Japanese engineers are
finding a new lease of life in booming China.
"My profession is going out of business in Japan," said
59-year-old Masayuki Aida, who made moulds for a Tokyo-based
firm for 30 years but has spent most of his 50s in Dongguan, a
gritty manufacturing hub in southern China's Pearl River Delta.
With the incessant noise of car horns and a pervasive smell
of chemicals, the dusty streets of industrial Dongguan are a far
cry from Tokyo or Osaka. Construction sites dot the city while
beggars clutching tin cans approach cars at every intersection.
For Aida and many like him nearing the national retirement
age of 60 the choice was simple - face a few years without an
income as Japan raises the age at which employees get their
pension or work for mainland Chinese and Hong Kong companies.
"People aren't making products in Japan anymore," said Aida,
who makes moulds for goods ranging from toys and earphones to
coffee machines. "I wanted to pass on to younger generations all
the knowledge and technology about moulds I had obtained."
For Japan, marred by two decades of economic stagnation, the
little reported exodus of engineers means rival Chinese firms
are getting an injection of the technology and skills behind
"Made in Japan" products.
Japanese government data shows 2,800 Japanese expats living
in Dongguan alone, a city of more than 8 million people.
"From Japan's perspective, emerging countries are getting a
free ride of the benefits we nurtured. So yes, it is a problem,"
said Yasushi Ishizuka, director of the intellectual property
policy office at the Ministry of Economy, Trade and Industry.
Japan suffered its first tech brain drain about 20 years ago
when South Korean firms such as Samsung Electronics
and LG Electronics Inc poached scores of front-line
semiconductor and white goods engineers from big Japanese
Since then South Korean electronics manufacturers have
bounded into the global top ranks, helped along by this human
Japan's tech giants, meanwhile, have floundered. Sony Corp
, Panasonic Corp and Sharp Corp,
Japan's three main TV makers, are expected to have lost $21
billion between them in the fiscal year that ended March 31,
partly because of Korean competition.
GO WEST, OLD MAN
Many of the Japanese engineers finding a second life in
China do not have the cutting-edge technology that would deal
another crushing blow to Japan Inc yet, analysts say, but the
long-term impact could be severe because they will give Chinese
manufacturers the skills to make high-quality goods efficiently.
China has pushed its own companies to innovate, but many
experts cite an educational system that prizes rote learning as
an obstacle. For many firms, buying talent is the quickest fix.
"Skills related to production, like making moulds, are
something that companies obtained after years of trial and
error," said Morinosuke Kawaguchi, associate director at
management consultancy Arthur D Little in Tokyo.
For example, the slightest tweak to a mould could lead to
mass production of faulty items, said Kawaguchi, himself a
former Hitachi Ltd engineer who used to make household
"This exodus of Japanese engineers will raise the quality of
products made by Chinese companies and allow them to produce
efficiently," he added.
Aida said the skills of Chinese engineers have improved over
the past 10 years.
"When I first came to China, a product was considered good
as long as it didn't fall apart," said Aida, one of seven
Japanese engineers in Dongguan interviewed by Reuters. "They've
caught up rapidly since then."
That shows in recent trade numbers. China's exports of
higher valued machinery and electronic products rose 9.1 percent
in the first quarter from a year ago, when they gained 7.6
percent, to $253 billion, according to trade data.
Stemming the outflow of engineers to Chinese manufacturers
appears to be impossible.
Sany Heavy Co Ltd, Geely Automobile Holdings Ltd
and BYD Co Ltd all told Reuters
they had employed Japanese engineers to boost their
technological know-how. They declined to comment further.
In addition to the large companies, there are thousands of
smaller manufacturers across China. While not all have the deep
pockets to hire expat engineers, some might find the cost of
importing technology may not be as high as it used to be.
For one, there is no shortage of supply. Millions of Japan's
"baby boom" generation which makes up nearly a 10th of the
country's population are starting to retire, with many engineers
It is not just financial considerations, but a desire to
keep working beyond the rigid retirement age in Japan that
prompts many to take up the offer of a move to China.
"I'm working longer hours but actually making less now than
I was making back in Japan," said Aida, puffing on a cigarette
in a simple conference room at his Chinese company's office.
Tomio Oka, an engineer who specialises in making moulds for
components used on items such as mobile phones that require
precision to one one-thousandth of a millimetre, quit his job at
a unit of what is now Panasonic Corp in 1998, to work
for a Taiwanese company in Dongguan.
"Everyone in my family opposed this. I was working at a
reputable company, making a stable income. My wife even
threatened to divorce me at one stage," Oka said, grimacing as
he recalled what happened.
"But I wanted to open the doors to my future myself. I
didn't want to lead a life on some rail track set by others."
GOLF, BEER, HOSTESSES
Taking up a second career in Guangdong province, China's
export hub, is not without its challenges.
The comforts and convenience found in most Japanese cities
are hard to come by in the industrial district on the outskirts
of Dongguan where Oka and Aida live, 100 km (60 miles) north of
Buses are the only public transport. Most taxis operate
without licences, making foreigners easy prey for overcharging.
Pick-pocketing and burglary are common.
"I grew up in post-war Japan when things were just as
chaotic. So the surrounding environment was never an issue for
me," Aida said.
Many Japanese expats in Dongguan have left their families
back home. They live in what would be seen in Japan as rundown
apartments and spend their spare time playing golf or drinking
with fellow countrymen in the few Japanese restaurants located
around the city.
Some have hired waitresses from these eateries to work
part-time as domestic helpers or maids.
There are also dozens of so-called KTV lounges, or karaoke
night clubs with young hostesses, that cater especially to
"What else is there to do here after 7 p.m. besides drinking
with friends or going to karaoke?" said one expat, sipping a
popular Japanese alcohol sochu in a dimly-lit KTV lounge, fitted
with sofas, karaoke machines and a billiard table.
"It can get really lonely watching DVDs all alone in my
apartment," he said, as a fellow engineer, his arm around a
young hostess in a tight skirt, sang a popular Japanese tune.
Critics called the wave of Japanese engineers who went to
South Korea as "traitors" for passing on technology to rivals.
While the China-bound engineers have not been so vilified, some
on the blogosphere question their motives.
Oka says most just want to support their families.
"We face retirement at 60 but what are we supposed to do
until 63 or 65 when we can start receiving our pension?" he
Japan is burdened with debt of $10 trillion, or twice the
size of the economy. That has forced the government to gradually
raise the age people can get their pension from 60 years of age,
leaving many salarymen temporarily income-less after retirement.
"There isn't so much a feeling of guilt on our part. What's
wrong with working for someone who's offered you a job?" Oka
Japanese employers, like the government, say there is little
they can do to stem the outflow of skills and technology.
"Technology gets passed down," said Satoshi Tsuzukibashi,
director of the industrial technology bureau at Keidanren,
Japan's biggest business lobby. "One can argue that's how Japan
obtained its technology from the United States."
Aida says the Japanese culture of wanting perfection from
its products has left many engineers exhausted.
"Japanese demand for quality is excessive," he said. "It
makes one not want to work there."
(Additional reporting by Samuel Shen in Shanghai; Editing by
Jason Subler and Alex Richardson)