Now, the latest in our special series "Made in China", which looks at China's manufacturing sector and its transformation as the economy changes. Today -- one of the key challenges in that transformation -- a lack of skilled workers. Why the shortage? And how can China nurture both the size and the quality of its skilled labor force? First let's bring in my colleague Zhong Shi.

Q1. We have the world's largest population and as of now, we still have a relatively cheap and big labor force. But our manufacturers say they simply can't find enough people with the right high-end skills. What's going on?

Zou Yue, the answer is partly about training and education but also crucially, a lack of decent career progression. When we think of the clichéd image of highly skilled technical workers, we probably think of Germany or Japan, but not China. Why? Urban employment is going up as more people come to the cities on average 13 million more jobs each year and the urban labor force is predicted to grow by another 15 million this year. So there's 2 million surplus people ready to work straight away. You would think manufacturers would be flooded with the people they need. But they're not. Chinese manufacturers are trying hard to upgrade and transform their working methods, but they say they can't get the right workers for the job. And by right, they mean experienced and skilled. Many experts have attributed the problem to a lack of quality training and education. In some sectors, older workers often have no younger colleagues to pass on their skills. But also, a big factor is that the younger workers in some sectors say there's no easy way to progress from basic and repetitive jobs -- a lack of career nurture and progression that keeps them tied to the production line.

Wang Wenhong is 50 years old and the last blacksmith left in this small county in Hebei province.

He comes from a family of blacksmiths with a history stretching back more than a hundred years. Today, he's making a ladle for the restaurant next door.

The shop is owned by Wang and his brothers. But he's the only one still working, trying to keep it afloat.

"I can't find an apprentice. Nobody wants to do this. The craft is almost extinct," Wang said.

Blacksmiths are one of China's oldest professions. Wang says his skills can't be completely replaced by machines.

He says his kitchen knives are sharper than mass-produced ones. But he also admits that most people today don't appreciate the difference.

Wang may be struggling to find a young apprentice. But many young people ARE looking to expand their skills.

Huang Zhanghui is a metal plate worker for electronic appliance maker Meidi. For a long time, his job involved one process: moving things.

"It required no technique at all. I lifted it up, moved it, then put it down," Huang said.

Huang saw no future in the job and threatened to quit. So the company offered to train him in operating robotics.

And he stayed.

Huang's manager says skilled workers are a company's most valuable asset. Cultivating young, promising workers like Huang will go a long way towards raising the competitiveness of Chinese manufacturing.

So as we can see, China still retains the advantage of a large labor force. The problem is that as Chinese manufacturers go through a makeover, they need staff who can do more than just sit at assembly lines.

Q2. You mentioned Germany. What can China learn from other nations?

Germany's strength in vocational training means that not only are more people inclined to enter vocational school, but experienced and skilled workers also make a very decent income. At 15 years old, 65 percent of German students choose vocational school over college. At the same age, only 10 percent of Chinese students choose vocational school over high school. That difference comes about because of perception. Many Chinese people see vocational school as a lower guarantee of money or status. But in Germany, a fresh college graduate taking an office job can make about 30 thousand euros a year, a blue-collar worker of the same age can make about 35 thousand. Germany also has a multiple grade-based system that ensures that the career path ahead is clearly mapped out. Many Chinese workers work in low-end processing and manufacturing jobs, meaning that an upgrade in skills or a raise in salary is not easy to come by.