- Title: CHINA: Christmas orders mean labour strain in export hubs
- Date: 13th October 2009
- Summary: HONG KONG, CHINA (RECENT) (REUTERS) ROYAL BANK OF SCOTLAND CHIEF CHINA ECONOMIST, BEN SIMPFENDORFER (SOUNDBITE) (English) ROYAL BANK OF SCOTLAND CHIEF CHINA ECONOMIST, BEN SIMPFENDORFER, SAYING "Certainly export orders in September have strengthened so there's a lot of factories that are scrabbling to find labour to try and produce those orders. But there is a caveat a
- Embargoed: 28th October 2009 12:00
- Keywords:
- Location: China
- Country: China
- Topics: Economic News,Employment
- Reuters ID: LVA406JNBPI6Q2GVW37UO6E3J93S
- Story Text: After a deep slump in China's job market, another sight is becoming more familiar in China's manufacturing heartland: job posters in dusty lanes and factory owners scrambling for workers at employment centres.
In Shenzhen, the capital of Guangdong province, the heart of south China's Pearl River Delta, a sign advertising 400 new jobs at an electronics factory is put up outside a human resources centre.
At the start of the year as the financial crisis deepened, factories closed in their thousands while millions of migrant workers were left without jobs.
But in recent visits to job centres in three Pearl River Delta factory towns, a fragmented, yet consistent picture of labour needs has emerged.
China's "world factory" is cranking up production to meet extra Christmas orders from the West and there are not enough people to do the work.
Yet despite the promise of new work, many migrants who left coastal export hubs in droves earlier in the year, are now unwilling to make a rash return and for fear of getting caught out again.
Huang Zhilian, the manager of Vmart electronics, which exports calculators, watches and DVD players to emerging markets like Romania and Pakistan, was sitting bored at a recruitment booth in a large job centre in Shenzhen.
He says more time is needed to fulfill the factory's labour needs, as they have only recruited six workers in the past three days.
"There's no way we can hire all the workers we need in one or two days. I'm afraid, we will need longer time to hire workers these days. We will do it slowly and it could take one to two months to find all workers we need," said Huang.
Another reason workers are reluctant to migrate to the coastal manufacturing hubs is that jobs in China's interior have become more plentiful and better paid as Beijing's $585 billion stimulus package kicks in and domestic demand revives.
"In the old days, wages and benefits in Shenzhen were many times higher than the inland. But nowadays, the wages and benefits of ordinary workers in Shenzhen is 1.5 times of the inland workers. So the difference is only 400-500 yuan ($59 - $73 USD) to 500-600 yuan."
While labour supply shortages aren't a new phenomenon, a demographic mindset shift among China's 150 million migrant worker population, suggests more and more are now content to stay home, rather than provide the muscle to power coastal export hubs.
Job centres can be teeming, but job seekers are becoming more picky, preferring work at bigger factories and holding off for better pay, leading to wage inflation in some parts.
"These days more and more job seekers will select jobs with better wages, better working condition and things related to daily life," said Li Qiang, a jobseeker from Henan Province.
The high cost of living in coastal regions and less enticing wages are also dissuading migrant workers from uprooting again.
"In Dongguan, it is actually very easy to find jobs with less benefits but jobs with good benefits are very difficult to find," said He Weipu, a jobseeker from Hunan Province.
Chinese exports for August fell a marked 23.4 percent year-on-year, but economists say one possible explanation is that while orders are up from pre-crisis days, overall production levels remain at a low base and Western consumer demand remains frail.
"Certainly export orders in September have strengthened so there's a lot of factories that are scrabbling to find labour to try and produce those orders. But there is a caveat and that is a lot of foreign retailers delayed placing orders until September because they are very uncertain about the outlook for the rest of the year," said RBS China chief economist, Ben Simpfendorfer.
"So, in short, what's happened is that orders that should have been spread over several months have in fact been concentrated in just a single month. So it gives the impression things are better than they are," Simpfendorfer added.
The uptick also doesn't appear to be across the board -- large firms seem to be gleaning the lion's share of business and mopping up most surplus labour.
Many of the Delta's masses of small factories still live from one order to the next giving them little to cheer about this Christmas.
"When you read these stories from these exporter manufacturers, they say things are good today, but we really don't know what conditions will be like tomorrow," said Simpfendorfer. "And for that reason, they're really still quite concerned."
These strains underscore an urgent need for the Delta region to upgrade -- to reduce its reliance on low-end labour-intensive industries. - Copyright Holder: REUTERS
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