Global Firms Take China to Next Level
Matsushita Electric Industrial Co. has used China as a low-cost production hub since it set up its first manufacturing plant here in 1983. Like other manufacturers around the world, the Japanese electronics giant aimed to take advantage of China's low-cost labor and resources to make products such as washing machines and cathode-ray tubes for sale in China and for export.
But as China, with its billion-plus consumers, develops into a more important market, Matsushita is taking its Chinese operations upstream. In recent years, the maker of Panasonic-brand electronics has built or invested in five high-technology product development and research centers across China, hiring hundreds of local engineers to work in areas ranging from car electronics to mobile technology, mostly for cellphones.
The change reflects China's move from a manufacturing base to a market of increasingly sophisticated consumers. In 1996, the average annual expenditure for people living in urban areas was 3,919 yuan ($474). It has steadily increased to 6,511 yuan in 2003, the latest year for which figures are available.
Hoping to profit from this development, foreign companies from South Korea's Samsung Electronics Co. to U.S. computer maker Dell Inc. are beefing up their product development and design facilities to tailor merchandise for Chinese consumers.
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"The biggest error in the past that the multinational firms have [made] in the Chinese market is they haven't had a sufficient enough appreciation of the domestic market," says Sean Debow, who tracks technology companies and trends in Asia for international investment bank UBS. Now, he says, "people are focusing on adapting products designed abroad to meet the specific needs of China."
The stakes are high for Matsushita. The company is counting on the booming China market to offset sluggish demand in Japan. Matsushita President Kunio Nakamura has called China the company's future "engine of growth." He is aiming for sales there of ￥1 trillion, or nearly $9.5 billion, for the year ending March 2007, compared with ￥470 billion for the year ended March.
"Until now, China was a place to make things," says Takashi Nakamura, Matsushita's general manager in charge of human resources in China. "Our big policy now is to localize design" and research and development.
Matsushita's efforts to go upstream also are partly an attempt to win support from the Chinese government, which is eager for foreign companies to transfer more high-end operations and technology into China. "It's kind of a PR effort," says Shingo Konomoto of the Tokyo-based Nomura Research Institute. To be able to operate smoothly in China, foreign companies "have to show they're doing some kind of R&D there."
Heightened Risk
The transition upstream can be tricky. One problem with relegating product development and design to China is the heightened risk that sensitive intelligence and know-how will leak out to local competitors. For companies like Matsushita, which rely on cutting-edge technology to compete globally, protecting intellectual property is critical -- especially as competition with local Chinese electronics makers heats up. (See related article.)
Another obstacle is that Matsushita, like many Japanese companies, finds it difficult to hire talented engineers and managers because Japanese companies generally have a reputation for imposing long working hours while being reluctant to promote local employees.
Matsushita was one of the first foreign companies to start operating in China following World War II after founder Konosuke Matsushita met personally with Chinese leader Deng Xioaping in Beijing in 1978. Subsequently, the company has built an extensive China business, with 45 manufacturing facilities and another -- a huge complex for making home appliances -- in the works. About 50% of the goods it makes in China are for export, while the rest -- which range from air conditioners to cellphones -- are sold in the local market.
Initially, Matsushita sold Chinese consumers a basic version of products it made in Japan. But as Chinese consumers grew increasingly affluent and aware of global trends, they became more demanding. At the same time, competition started heating up. Local Chinese companies such as Haier Group flooded retail stores with cheaper microwave ovens and television sets. Matsushita, once a dominant electronics maker, increasingly found itself struggling. For example, in 1997, Matsushita had 90% of the Chinese market for DVD players. That share has since fallen to a few percentage points.
"We've entered an era where people really care about the functions, the look, and the durability," of a product, says Tetsu Kimoto, president of Matsushita's China arm. "They don't just want the same thing everyone else has."
So Matsushita has changed its strategy. Rather than designing all products from start to finish in Japan, it has begun hiring local engineers to alter them, coming up with new models for the Chinese market.
The Chinese design centers are proving to be crucial in areas such as cellphone handsets, where manufacturers produce a huge variety of styles -- there are several hundred on the market -- and the phones are viewed as fashion accessories. To compete, foreign concerns must churn out their own wide and diverse lineup. The development centers also allow the company to study cultural preferences. Employees realized, for instance, that Chinese consumers like brighter, vermilion phones compared with the darker red preferred by the Japanese.
Preventing Leaks
To prevent potential technology leaks, Matsushita is separating its core and noncore technology, leaving basic research, as well as the development and production of technologically sensitive parts and products in Japan. For instance, Matsushita will make the guts of a cellphone in Japan, then bring it to China to be tweaked by local developers.
The company also makes increasing use of what it calls "black box" technology, which are products protected by patents and designed in such a way that they can't be disassembled and analyzed. And where Matsushita does produce high-end products in China -- at its plasma-display-panel factory in Shanghai, for instance -- employees are familiar only with one part of a multistep production process. This means that one person alone can't replicate the procedure or a complete product elsewhere.
But Matsushita managers say a certain amount of technology leakage can't be helped. This is especially true as the company plans to increase the ranks of local Chinese engineers to staff the new R&D centers and serve as technicians in the company's factories. Matsushita also wants to raise the number of Chinese general managers in its China operation -- most are Japanese now -- to 70% by 2006 from 40%.
It isn't easy. "Right now, the real competition in China is for human resources," Matsushita HR manager Mr. Nakamura says. As foreign companies engage in more sophisticated activities such as software development and product design, and local concerns try to raise their levels of expertise, companies are fighting over graduates of the top universities. Defections to rival companies and aggressive headhunting are on the increase.
The nature of the jobs offered by Matsushita -- mainly reconfiguring products made elsewhere -- makes it especially tough to hold on to people for long periods because engineers typically want to design products from scratch. "After two or three years, they start to wonder if their skills are being fully utilized," Mr. Nakamura says.
And then there is the uniquely Japanese hurdle of a reputation for low salaries, long hours and slim career prospects. A survey conducted by ChinaHR, a major online recruiter, ranked Matsushita No. 46 among the most popular companies to work for in China. U.S.-based International Business Machines Corp. and Microsoft Corp. ranked No. 2 and No. 5, respectively, while the highest-ranking Japanese concern was Sony Corp. at 26.
Matsushita is tackling its image problem by putting more effort into China recruitment including setting up a Web site for job applicants with testimonials from current employees. It also is introducing in China a merit-based pay structure -- as opposed to the seniority-based Japanese system -- to make itself more attractive to young graduates. And in another break with Japanese tradition, Matsushita will, in certain cases, offer higher pay for more valued workers such as engineers, instead of paying all new employees the same. Mr. Nakamura, the HR manager, says he is sharing his strategies with other managers of Japanese companies in China in hopes they can work together to improve their overall reputation.
Numerous Challenges
Yanfeng Song, a 28-year-old from Inner Mongolia with a masters degree in software design, was hired a year ago to work in Matsushita's R&D center for automotive electronics systems in the city of Tianjin. His friends, he says, wonder why he took a job with a Japanese company: "They think it must be so tiring." But Mr. Song says he likes it so far. His proudest achievement is a display screen he designed for use in cars made by Toyota Motor Corp.
Managers of the center where Mr. Song works say they plan to spend the next few years training him and the more than 80 other technicians working there, mainly teaching them how to modify Japanese audio, navigation and other electronics systems for the China market. Eventually, the company hopes that they will design their own products from scratch.
For now, Matsushita officials say they will focus on the numerous challenges the company faces in China, a market that Mr. Kimoto calls "very severe." One big concern: Even if Matsushita succeeds in creating locally designed products that are popular with Chinese consumers, they will likely be matched by the local rivals within six months to a year, and probably at a lower cost.
"We always have to be one step ahead," Mr. Kimoto says. "If we can survive here, we'll be able to survive globally."
中国从“工厂”转向“市场”
松下电器产业公司(Matsushita Electric Industrial Co.)自1983年在中国建立起第一家生产厂后，一直把中国当作自己的低成本生产基地。与全球其他生产商一样，这家日本大型电器生产商也瞄准了中国的廉价劳动力和资源，在这里生产洗衣机和阴极射线管等，供中国国内销售和出口。
但随著拥有十几亿消费者的中国在全球市场中发挥著日益重要的作用。松下电器产业也正在提升其中国业务。这几年，该公司先后在中国投资成立了5个高科技产品开发中心，雇佣了数百名中国工程师，开发从汽车电器到手机部件等多种新产品。
这种转变充分表明中国正在从制造基地向日益成熟的消费者市场过度。1996年，中国城市居民人均年支出只有人民币3,919元（合474美元），但最新数据显示，2003年城市居民人均年支出已稳步增至人民币6,511元。
为了从这个发展趋势中获利，中国的外国公司，从韩国的三星电子(Samsung Electronics Co.)到美国的戴尔电脑(Dell Inc.)，纷纷加大了产品开发力度，组建设计团队，专门针对中国消费者的喜好设计产品。
“跨国公司在中国市场曾犯下的错误就是没有充分重视国内市场，”跨国投资银行瑞银(UBS)负责跟踪科技企业以及亚洲发展趋势的分析师德博(Sean Debow)说。现在，人们终于开始关注国内市场的特定需求，用国外设计的产品来迎合这些需求。
松下电器在中国投下重注。公司希望借助蓬勃发展的中国市场来抵消日本国内需求的低迷。该公司总裁中村邦夫(Kunio Nakamura)曾将中国称为公司未来的“增长发动机”。他准备将松下电器截至2007年3月底全年的中国市场销售额增加到1万亿日圆（接近95亿美元），远远高于本财年的目标4,700亿日圆。
松下电器中国业务的人力资源部经理Takashi Nakamura说，直到现在，中国仍然是生产地。公司的一项重大计划就是实现设计和研发的本地化。发展上游业务也是该公司为博取中国政府支持的重要举措之一。中国政府非常希望外国公司能把更多高端业务和高薪技术带入中国。东京Nomura Research Institute的Shingo Konomoto说，这是一种公关策略。为了中国业务的顺利运营，外国公司必须表明它们在国内有部分研发工作。
但是，这种业务调整也需要高超的技巧。外国厂商不愿把产品研发和设计带入中国的障碍之一就是知识产权和专业技术有可能被国内竞争对手获取，这个问题一向非常敏感。对松下电器这样依靠先进技术展开全球竞争的公司来说，保护知识产权至关重要，尤其是与国内电器生产商的竞争日益加剧之际。
另一个障碍是，松下电器等日本公司很难招到技艺高超的工程师和经理人，因为日本公司普遍都有一个超时工作、不愿提升本地员工的坏名声。
松下电器的创始人松下幸之助(Konosuke Matsushita)于1978年在北京会晤了当时的中国领导人邓小平，该公司随后成为二战后率先进入中国的外资企业之一。此后，松下电器逐步在中国铺开了广泛的业务网络，目前已拥有45家生产厂，和一个在建的生产家用电器的大型生产基地。松下电器中国工厂的产品有50%左右供出口，其余内销。
最初，松下电器在中国销售其日本在售产品的低端型号。但随著中国消费者日渐富余，对国际流行趋势也日益了解，他们的需求更加苛刻了。此外，竞争也变得日益激烈。海尔集团(Haier Group)等国内公司推出大量低价微波炉和电视机，占据了大大小小的零售店铺。一度占有市场主导地位的松下电器处境日益艰难，1997年该公司在中国DVD市场的占有率还高达90%，但现在已经不到10%了。
松下电器中国业务总裁木元哲(Tetsu Kimoto)说，现在已经进入了一个产品功能、外观和耐用性占据主导的时代，别具一格的产品才能大行其道。
因此，松下电器调整了策略。不再像以往那样在日本完成所有产品的全套设计，而是开始在中国雇佣当地工程师，针对中国市场设计新款式。
中国的设计中心将在手机等诸多领域扮演重要角色，手机已然成为一种流行时尚，生产商的设计五花八门，市场上可以见到的就有几百种。
为了取得竞争优势，外国公司必须将各种阵容发动起来。而且，在中国设立研发中心也有利于公司研究当地文化倾向。例如员工们发现，中国的消费者更喜欢亮丽的朱红色手机，而不像日本消费者那样喜欢暗红色。
为了防止潜在的技术泄露，松下电器将核心与非核心技术区分开来，将基础研发以及技术敏感型部件和产品的研发生产留在日本。举例来说，松下电器在日本生产手机核心部件，然后由中国开发商进行组装。
松下电器还大量使用“黑箱”技术，让产品受到专利保护，并且设计成难以拆卸、分析的形式。在松下电器生产高端产品的地方，例如在上海的等离子显示器工厂，员工们只能熟悉生产过程中诸多步骤中的某个部分。这意味著任何一个普通员工都无法在其他地方复制整个生产过程或整件产品。
但松下管理人士称，某些技术的泄露是难以避免的，特别是公司正计划聘用更高层次的本土工程师来加入新的研发中心，担任工厂中的技术人员。松下电器还打算提高中国业务中中国管理人士所占比例，到2006年将从目前的40%提高至70%。
当然，这并非易事。“眼下在中国，真正的竞争是人力资源的竞争，”松下电器中国业务的人力资源部总经理Takashi Nakamura说。在本地企业纷纷提升技术水平的情况下，身处软件开发和产品设计等高尖端领域的外国公司正在竞相抢夺名牌大学的毕业生。而且，员工投靠竞争对手的现象时有发生，猎头机构的挖人攻势也一直有增无减。
松下电器提供的工作性质（主要是改装其他地区生产的产品）使得公司更加难以长期笼络员工，因为工程师们一般都希望亲自从事产品设计工作。“两三年后，他们开始思考，他们的技能是否得到了充分发挥，”Nakamura说。
而且日本公司还要面临一种特别的压力，因为日本公司一直有低工资、超时工作以及事业发展空间狭小的坏名声。根据中国知名招聘网站中华英才网(ChinaHR)的调查，松下电器在中国大陆受欢迎的外企雇主中名列第46。美国国际商业机器公司(IBM)和微软公司(Microsoft Corp.)分别位列第二和第五，排名最高的日本公司是索尼公司(Sony Corp., J.SNY, 又名:新力公司)，排在第26位。
松下电器正在极力扭转这种形象，举措之一就是为求职者设立专门的网页，并在上面刊登现有员工的自述。公司还一改在日本基于资历定薪的做法，在中国引入了基于员工价值的工资结构，这样就可以吸引更多的年轻毕业生。另一项有悖日本传统的做法是，松下电器在某些情况下将向工程师等更有价值的员工提供较高薪水，而不是对所有新员工一律对待。人力资源部经理Nakamura表示，他正在向其他日本公司的管理人士推荐这种做法，以共同改善他们的整体形象。
28岁的宋彦峰（音）来自内蒙古，拥有软件设计专业硕士学位，去年，他加入了松下电器在天津的汽车自动化系统研发中心。他说，他的朋友很奇怪为什么他应聘了一家日本公司。“他们觉得这份工作一定很累。”但宋彦峰说，目前为止他还比较喜欢这份工作。令他最骄傲的是，他设计了一款用于丰田汽车的显示屏。
该中心的管理人士称，他们打算在未来几年内为宋彦峰以及其他80多位员工提供大量培训，主要是教他们如何改装日本的音频系统、导航系统以及其他电子系统，以适用于中国市场。最终，公司希望他们能够自行设计产品。
松下电器管理人士称，眼下公司在中国市场仍然面临诸多挑战，总裁木元哲甚至将这个市场称之为“非常严峻”的市场。一个很大的问题是：即便松下电器能够成功推出本地化产品，并且深受中国消费者欢迎，他们也很可能在6个月至半年的时间内遭到仿效，甚至可能比该公司生产成本更低。
“我们总是必须领先一步，”木元哲说，“如果我们能在这里生存，我们就能在全世界生存。”
