Less than 10% of China grads suitable for MNCs: McKinsey

New Delhi, Nov 21 | Updated: Nov 22 2005, 05:30am hrs
Despite Chinas enormous pool of university graduates (3.1 million in 2005 alone), a McKinsey research projects that fewer than 10% of Chinese job candidates would be suitable for work in a foreign company by 2008. China will produce 157.3 lakh graduates from 2003 till 2008. Of which, most (145.3) graduates will not be suitable to work in MNCs. To avoid this talent crunch and to sustain the economic ascent, China must produce not just more graduates but more suitable ones, McKinsey says.

In India, by contrast, 10% of university graduates and 25% of engineering grads are suitable for MNCs.

Chinas pool of suitable engineers stands at 10% or 1.6 lakh, no larger than UKs. The problem is the Chinese education systems bias towards theory, rather than practical knowledge.

China has 1,683 colleges and universities. Beijing, with its 76 colleges, produces 4.9% of the total graduate pool, followed by Shanghai, which contributes 3.7%. The problem is that only one-third of the total students produced per year study in any of the top ten universities. Another roadblock is that only one-third of Chinese move to other provinces for work. Due to these two factors, according to McKinsey, MNCs face great difficulty in finding quality labour.

In India, almost 50% of students are willing to move to metros for work.

Managers will also be in short supply in China. Over the next 10-15 years, China will need 75,000 managers. With high FDI investment, there is high poaching of managers by MNCs. Also, managers working in sectors such as consumer electronics only, are employable by MNCs, as per the survey.

Brain drain may also affect China. More than 1.5 lakh Chinese students are studying abroad, with 50% in US alone. Most of them stay back to work in foreign countries. India, on the other hand is facing a reverse brain drain due to hike in salaries, with the IT and BPO boom.

The Chinese ministry of education has required all students to learn English compulsorily from grade three. Lack of English language skills is also proving to be a roadblock, though. It has affected Chinese IT skills, as well.

Ironically, Indian IT companies are training the Chinese in IT skills. NIIT has set up more than 100 training centres, while another Indian firm, Aptech, is the leader in IT training in China.