Understanding China's workforce competitiveness: a macro analysis

Abstract

Purpose

The purpose of this paper is to examine the relationship between training and education and associated workforce productivity and competitiveness also, to identify new effective strategies for China to maintain and enhance workforce productivity given the depleting abundant workforce supply.

Design/methodology/approach

Based on data from China's manufacturing firms that included all state‐owned and non‐state‐owned enterprises with annual revenue greater than ¥5 million in 2004, the authors calculate marginal labor productivity through production function and derived the relationship between workers' education and associated productivity.

Findings

At the time China arrives at a Lewisian Turing Point, workforce quality can substitute the quantity to maintain its competitive advantage. Higher workforce productivity generated from improved human capital can offset increases in labor cost, thus creating new impetus for sustained economic growth.

Research limitations/implications

Formal education and workplace learning are complementary in maintaining and enhancing a productivity workforce. To build a new competitive edge for China's economic growth in the short run, enterprise‐based training should be a requirement in all industries.

Practical implications

The authors offer implications for HR managers and organizations on talent management strategies. Implications for governments to develop policies that promote and foster workplace learning and skill building activities are also presented.

Originality/value

This study is one of the first adopting large‐scale enterprise productivity data to show China's workforce competitiveness by examining the relationship between workforce productivity and training and education.

Citation

Qu, Y. and Cai, F. (2011), "Understanding China's workforce competitiveness: a macro analysis", Journal of Chinese Human Resource Management, Vol. 2 No. 1, pp. 8-22. https://doi.org/10.1108/20408001111148702