A survey by the Japan – China Investment Promotion Organization shows that 85% of export – oriented Japanese manufacturers in China are profitable. The picture is different, ………11…….., for the smaller number of local – market – oriented manufacturers. More than 40% of them are in the red, a figure worse than that of their Western competitors. With China’s ……12……… into the World Trade Organization, the trend will turn toward a stronger local – market orientation. ………13……… these Japanese firms must tackle the issue of profitability. 
     Many see the problem as a result of Japanese firms’ high reliance on expatriates, who head 90% of all Japanese joint ventures in China. 
​     This actually presents a double bind. Japanese firms find qualified local workers hard to attract and keep because the latter believe they are allowed only limited participation in decision – making .………14……. also believe career opportunities are limited due to the focus on Japanese staff for top management posts. These firms are further hampered because a Japanese top layer is unable to ………15…….. communicate with lower – level local staff that are better tuned to local market conditions. Thus, the absence of sound middle – management restricts information flow and prevents timely market decisions.