Profit has its place in Chinese industry

Press, 10 May 1979, Page 3

Profit has its place in Chinese industry

NZPA Shanghai New Zealand businessmen found yesterday that profit is not a dirty word in China, and that “attitude towards labour” is one of the criteria used in establishing bonus payments. Their insight into Chinese factory activities came during a tour of a paper board mill in Shanghai, which employs almost 1200 workers. In a lively question-and-answer session after a tour of the mill, such “mandarins” of New Zealand in dustry as Mr R. R. Trotter, the chairman of the Challenge Corporation, Mr D. O. Walker, the managing director of N.Z. Forest Products, Ltd, and Mr H. A. Fletcher, the deputy managing director of Fletcher Holdings, Ltd, learnt about management in China. Factory officials told them that production targets, material costs, wage levels, and

plant improvement work costing more than about SNZ7OOO required approval from either the State or the board which controlled 35 pulp and paper mills in the region. Minimum wage levels at present were set at 108 Yuan (SNZ7S) at the top and 41 Yuan (SNZ3O) a month at the bottom of the scale, but workers could get bonuses according to their productivity, effort, skill, length of service, and “attitude to labour.” Asked whether the bonus payments included a sum for “political thought,” the officials said that they preferred to call this “attitude to labour.” They said that part of the factory’s profit was paid out on social welfare projects for staff, and the remainder went to the State. Wage levels were reviewed every two to three years. The factory management committee

was elected by workers and staff. The mill was first established in the 1930 s and has expanded since then. However, most of the paper-mak-ing equipment is more than 30 years old. Annual output, using wood pulp and waste paper, is about 34,000 tonnes. By comparison, the Whakatane mill of Forest Products, which makes similar paper board, produces 130,000 tonnes a year with more modern equipment.

The officials said that eight management criteria were set by the State and volunteered seven of these. Asked about the eighth they said that it was “profit,” and joined in the laughter of the New Zealand group. After the visit the New Zealanders joined the Deputy Prime Minister (Mr Taiboys) on his flight to Peking, where he held talks with the Chinese Minister of Foreign Trade (Mr Li Qiang).