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SCOTT JAGOW: U.S. companies in China have a staffing problem: They can't find the right people to work for them. Ruth Kirchner reports from Beijing.

RUTH KIRCHNER: For the first time in five years, the skills shortage has emerged as the No. 1 headache for companies doing business in China.

The American Chamber of Commerce says recruiting and retaining capable Chinese managers has become a real problem. Even finding suitable entry-level staff is difficult.

Most experts put the blame squarely on the Chinese education system which does not teach independent thinking or real-world skills.

Andrew Grant of McKinsey says China's university system needs a radical overhaul .

ANDREW GRANT:"A lot of learning is very individual in the Chinese system. There's not a lot of learning in teams, which again is much more akin to real life and what we particularly see in business where you're solving problems in teams".

Grant says the universities churn out millions of graduates every year, but only a tiny fraction has the skills to work for international companies.

In Beijing, I'm Ruth Kirchner for Marketplace.