The Slowdown of ICT Service Business Expansion in Yanji City, China

Focus on Korean Enterprises

Abstract

We investigated the slowdown of ICT service business expansion in the city of Yanji, Yanbian Korean Autonomous Prefecture, China, focusing on the employment conditions of workers. The results of our study revealed that within Yanji, the ICT service industry is composed primarily of both domestic and Korean companies. The arrival of Korean companies into Yanji began noticeably around 2006. Initially, the major reasons for this arrival were the abundance of ethnic Korean residents who could understand the Korean language, and furthermore, the low wage levels. However, since 2008, due to financial crises such as the bankruptcy of Lehman Brothers, and, in addition, due to a significant rise in the wage levels, a deterioration in the business conditions of some companies that entered into Yanji could be seen. Meanwhile, while the wage levels were increasing, compared with past levels, our study revealed that they were still low compared with wages offered in other regions of China and abroad. We observe that the reason for this condition is that few jobs being offered by ICT service companies in Yanji require a high level of education and skills. Therefore there were scant job offers where a high wage can be expected because of the classification of the position itself and job demands.