CHINA China’s coastal manufacturing bases face labor shortage amid upgrading


China’s coastal manufacturing bases face labor shortage amid upgrading

Global Times

03:39, February 25, 2019

Workers look for jobs at a job fair in Dongguan, South China's Guangdong Province on Sunday. (Photo: Global Times)

Dongguan, South China's Guangdong Province, used to be a hot spot for millions of Chinese migrant workers, but after the Spring Festival holidays, many companies in the world-famous manufacturing hub are having a hard time finding employees.

The trend has shed light on a shift in economic development in the country, where lower-end coastal manufacturing is losing steam even as it undergoes an upgrade. Meanwhile, faster economic growth in inland areas is providing abundant opportunities for workers.

"We increased salaries about 20 percent this year, but it's still hard to find a qualified worker," Wang Shi, general manager of the Dongguan-based Hongsheng Electronic Equipment Co, told the Global Times during a local job fair on Sunday.

"We have just got a bunch of orders, but not enough workers," Wang said.

Zhang Hongsheng, a 29-year-old electronics-sector worker from a county near Xi'an, Northwest China's Shaanxi Province, said "Many of my fellow workers stayed home, instead of coming back to Dongguan after the Spring Festival to find a job this year. You could see this because the train station was less crowded this year when I arrived in Dongguan on Friday."

Zhang said that as a production line worker, he has to work six days a week with two hours of overtime every day. But his monthly earnings of 6,000 yuan ($894) can only cover daily expenses for his family, who lives with him in Dongguan. 

"In recent years, many new factories have been established in my hometown, and they also need a large number of workers. They [the new factories] may offer a bit less than those in Dongguan, but rents and living costs are much cheaper," Zhang noted. "I came back because my wife and child are here," he added.

Wang said that another reason it's tough to hire workers is that "Young people want to do more 'respectable' jobs now, such as being property agents. Factory work is boring and tiring for them." 

A new recruit without any work experience can get about 3,500 yuan per month in his firm, but a year ago, the salary was just 2,000 yuan, he said.

Amid China's restructuring process, the trend that more factories and workers will move to inland areas is irreversible, Cong Yi, a professor at the Tianjin University of Finance and Economics, told the Global Times on Sunday. 

Industry revamp

It is time for coastal areas like Dongguan to adjust their industrial structure and upgrade, Cong said. He suggested that Dongguan can shift from labor-intensive industries to innovation-led sectors such as high-end manufacturing, automation, informatization, big data and artificial intelligence, based on the area's strength in having a complete industrial chain.

Some local factory owners have already been engaged in these efforts.

Sun Haobin, general manager at Zhongsheng Electronic Co, said that a shortage of workers and increasing labor costs have squeezed his firm's profits. But he has not felt much pain from the labor shortage, as his company has achieved a high level of mechanization.

"Two years ago, we invested a lot in upgrading the equipment in our factories. In the long term, machines are more stable and cost-efficient than people," Sun said.

Sun said that the company has also invested a lot in research and development to make its products - electric current fuses - more competitive in the global market. 

An employee surnamed Wang in a local high-tech company told the Global Times that the company has recruited more than 30 workers during the past three days. The company holds a special nanotechnology patent, which makes it quite competitive in the global market. 

"Many small electronics factories were shut down in recent years, but meanwhile, workers are eager to come to our company. Only through advanced technology can we survive in Dongguan. 

"Otherwise, we'll be driven out. It's lucky that we realized this earlier than others," Wang said.

"Dongguan's neighbor, Shenzhen, excels in research and development. The capital of Guangzhou serves as an aviation hub. So the city could take advantage of its two neighbors to speed up its transformation and become China's next Silicon Valley," Cong said.

"We also opened a factory in Chengdu, Southwest China's Sichuan Province, to shake off the rising labor costs in Dongguan," Sun noted, adding that the company is considering expanding its production lines to Southwest China's Guizhou Province, which has offered preferential policies to attract factories.

To accommodate capacity from coastal areas, industry insiders suggest inland regions should improve their infrastructure and telecom networks as well as announce measures to attract talent. 

"Policymakers in different central and western provinces should also identify their advantages and develop industries accordingly, rather than trying to attract as many industries as possible," Cong said.

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