Wrong perception of tuition market

Updated: 2013-08-07 09:58

(China Daily)

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Comment on "Course in cannibalism: a steep learning curve" (China Daily, July 30)

The article quotes Margaret Yang, a former partner of a training institute in Nanjing, Jiangsu province, as having said: "Unlike the manufacturing industry, where production can be expanded simply by using more facilities and equipment and employing workers who can improve their skills quickly, the expansion of a training institute requires good talent and careful management".

The manufacturing industry, like all commercial activities, exists in a highly competitive, complex and evolving economic environment. Competition for resources, including capital, intellect, training and education is no less fierce in manufacturing than anywhere else.

Should Yang care to visit the Boeing factory in Seattle, US, the Volkswagen plant in Berlin, Germany, the Hewlett Packard manufacturing site in Dublin, Ireland, or any other modern manufacturing plant around the world, she would see firsthand that her perception of manufacturing industry does not tally with reality. In these manufacturing plants, Yang will see that only companies with significant managerial and professional skill and talent, combined with a dedicated workforce, will be able to continue in business by providing goods and services at costs lower than competitors' prices.

Only careful consideration of demand, resource requirements and availability, cost of capital, risk, potential return, environmental and social impact, and retaliatory action of competitors, to name but a few elements, will lead to the release of investment funds for industry. Errors in analysis of any of the above elements will lead to corrective action in an attempt to recover the situation, or bankruptcy. There is no one to rescue the losers.

The competitive environment in which the private tuition market finds itself today is no different from any other market, and should not come as a surprise to anyone. A study of the history of the manufacturing industry may prove instructive.

Arthur Henry, via e-mail

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