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Labor Shortage Emerges in Guangdong

For the past month, Zhang Zhichun, an employee with a labor service agency of Dongguan, a city of south China's Guangdong Province, has been waiting at the labor force market center of Guangzhou, capital of the province, from morning till night, trying to "snatch" some migrant workers.

"Nearly 90 percent of the factories in Dongguan are in dire need of workers, so I came to Guangzhou, once the shrine for millions of migrant workers from China's vast countryside," said Zhang.

A city known for its numerous Taiwan, Hong Kong and Macao businesses, Dongguan boasts a floating population of more than six million. The population of its local people is only three million.

"In the past, a recruitment poster on wall could bring dozens of people competing for one post, but now the situation has taken a turn," said Zhang.

This situation in Dongguan is not unique in south China's Pearl River Delta, one of the economic powerhouses of China since the country adopts an opening policy to the outside world some 20 years ago.

In Shenzhen, another city once digesting millions of migrant workers to Guangdong Province, "nearly every Taiwan business is craving for workers as the general worker shortage gap has reached 30 to 40 percent. As a result of labor force shortage, some businesses have stopped accepting order sheets," said Liu Qiusheng, executive vice director of the Taiwan Merchant Association of Shenzhen, who is also an investor of stationery factories in the city.

"Supply had been surpassing demand in the labor market of Guangzhou until last spring when the demand for workers exceeded the supply for the first time, and this year the gap of worker shortage has become much larger," said Zhang Baoying, deputy director of Guangzhou labor market service center.

According to enrollment records, the ratio of job seekers to jobs offered is one to 1.2 or 1.3.

"Some 20 to 30 percent of posts are still vacant," said Zhang.

Some labor force agencies in Guangzhou even went to other regions to recruit workers. But the result was not good.

According to Zhang, an agency coming to central China's Hubei province to recruit workers was only able to meet 20 percent of the demand.  

As for the reasons for the reverse between demand and supply, Zhang said that the balancing economic development trend of China's different regions contributes a lot.

"As a result of active local economy around the country, many workers who would have left hometown to seek jobs in big cities now would rather work at factories mushrooming in their hometown," said Zhang.

"With a higher cost of living and a salary only some 300 yuan (US$36.1) more than what a worker could earn in his hometown each month, the charm of Guangzhou has been greatly reduced," said Zhang.

This year's labor force market of the Pearl River Delta presents the characteristics of what experts describe as an olive shape: the demand for workers with advanced techniques and rich experiences and that for manual workers able to do heavy physical labor are great while the demand for general workers is basically saturated.

"Now traditional labor-intensive industries including those making clothes, shoes, toys, furniture, machinery are being discarded by migrant workers as businesses with better working conditions and higher income, such as electronic factories, have become their first preference when seeking a job," said Liu Qiusheng.

"It calls for a readjustment of the industrial structure of Guangdong," said Liu.

A recent survey made by Guangdong provincial Labor and Social Security Department (LSSD) in eight major industrial cities of the Pearl River Delta shows that labor intensive enterprises, once the most thriving industry of the region, are being troubled by worker shortage.

"Compared with other regions of the country, the attraction for migrant workers of Guangdong which still strongly depends on traditional labor intensive industries, are weakening," said Huang Linyan, head of the salary office of the LSSD of Guangdong.

Moreover, as Guangdong has recently  increased its minimum salary by some 100 yuan (US$12), which involves the social security fund, labor intensive enterprises feel more pressure from the rise of labor force cost.

"I will try raising salary to employ enough workers. But the meager profits of the industry make the salary margin rather small," said a businessman from Hong Kong who owns a shoe factory in Guangdong.

Responding to the possible weakening of Guangdong's attraction for migrant workers and talents in various fields, the provincial government has started to adjust its policies in attracting foreign capital, including promoting foreign-invested high- and new-technological enterprises, research and development centers, modern service sections and introducing foreign investment in labor intensive enterprises to eastern and western parts and the mountainous area of the province that are relatively laggard in economic development.

(Xinhua News Agency August 8, 2004)

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