The Process ofChinese Manufacturing Upgrading: Transitioning fromUnilateraltoRecursive Mutual LearningRelations

Abstract

This article argues that upgrading in China has been a historical success, that upgrading must be seen as a learning process, and that current Chinese upgrading involves a transformation in industrial learning dynamics. During China's initial export‐oriented industrialization strategy, indigenous producers successfully upgraded by apprenticing themselves to their foreign customers, and they learned through integration in transnational communities of practice. The success of those initial unilateral learning relations enhanced the sophistication of the Chinese market, both as a community of producers and as a market for manufactured goods. This has generated a new phase of learning‐driven upgrading in which Chinese producers and MNC manufacturers both seek to make their Chinese operations more sophisticated. In this new context, apprenticeship disappears and Chinese and foreign players learn from one another. A core claim about the new mutual learning is that it is facilitated by the globalization of formal learning systems, such as corporate production systems (CPSs).

Throwing out the ballast: growth models and the liberalization of German industrial relations

“…The reasons are seen to reside in the new conditions of international competition in export markets. The product quality of German competitors has progressively improved thanks to technological progress and organizational learning (Herrigel et al, 2013). Thus the high-end markets of DPQ memory have become more contestable and this has forced German companies to engage in a constant process of restructuring, which innovates and upgrades while simultaneously cutting costs (Herrigel, 2015).…”

An Exploratory Study on Workforce Development Strategies by Taiwan-Invested OEMs in China

“…For instance, the prevailing manufacturing wages in Pearl River Delta are expected to rise 9.2 percent in 2013, faster than the estimated GDP growth rate of 7.6 percent in this region. Evidence shows that the impact of volatility in labor costs on OEMs' profit margins is likely to influence global MNC's manufacturing strategies (Herrigel et al, 2013;Chin, 2013aChin, , 2013bJiang, Baker, & Frazier, 2009). Hence, as noted previously, wage increases in China have intensified the problems of high employee turnover rate and relevant workforce issues, particularly in labor-intensive OEM industries.…”

“…Hence, all four types of upgrading require OEMs to enhance the overall skills content of production as well as relevant activities, and perform different levels of pragmatism-based organizational leaning from their mature market clients (Herrigel et al, 2013). Also, it highlights the vital needs to upgrading the labor force to possess new knowledge and skills that fit, or are even co-specialized to the unique criteria for upgrading within the specific industrial value chains.…”

“…These successful examples have highlighted the significance of workforce development strategies and accompanying human capital investment to facilitate upgrading, given competent engineers and skilled workers were critically needed to uphold the best practices (Herrigel et al, 2013;Chen & Miller, 2011; www.ccsenet.org/ass Asian Social Science Vol. 10, No.…”

“…The current average manufacturing wage, as a matter of fact, has risen to about 2.25 Euro/hour, which is comparable of that of certain Eastern European countries. (Note 1) Considering direct labor cost accounts for the majority of the cost components across an OEM's supply chain operations, a growing number of foreign-invested manufacturers in China, of course including those Taiwan-invested OEMs (Herrigel, Wittke, & Voskamp, 2013;Chin, 2013a) have decided to conduct upgrading strategies to upgrade their positions within the global value chain (GVC) for obtaining higher economic returns.…”