Booming Chinese province faces
labor shortage By Olivia Chung
HONG KONG - In recent years, booming
Guangdong province in southern China has been
experiencing a strange thing. While tens of
thousands of job seekers flock to job fairs,
manufacturers are complaining that it is becoming
more and more difficult to find enough workers to
sustain their business operations, particularly
after the Lunar New Year holiday.
Yet
while the economic powerhouse of southern China
has suffered from labor shortages, it has managed
to maintain its fast
pace
of economic development, with gross domestic
product (GDP) growing 14% last year.
With
the end of the Spring Festival holiday, tens of
millions of people once again left their home
towns and returned to the major cities. The
Ministry of Communication said the migrants,
mainly from Anhui, Hunan, Hubei and Sichuan
provinces, began their trips back to the cities of
Guangdong, Zhejiang and Shanghai on February 23,
the sixth day of the lunar new year.
As a
major destination for returned migrant workers,
Guangzhou, capital city of Guangdong province, saw
about 150,000 passenger arrivals at its railway
station on that day.
One of the regions to
benefit first from China's economic reform in late
1978, Guangdong has enjoyed about three decades of
strong economic growth, helped by investment from
Hong Kong and Taiwan and large numbers of migrant
workers.
Over the past 28 years,
Guangdong's GDP has grown from less than 60
billion yuan in 1978, or less than 700 yuan
(US$90) per capita, to last year's 2.597 trillion
yuan. That is equivalent to 28,240 yuan per capita
on the basis of its permanent population or 91.9
million in 2006, or 22,400 yuan per capita if
including the estimated 24 million migrant workers
who are not legally considered residents by the
government.
Although it's just one of
mainland China's 31 provincial-level entities,
Guangdong's GDP last year accounted for one-eighth
of the nation's total. Last year, Guangdong saw
$14.5 billion in foreign direct investment, almost
a quarter of China's total. The province accounted
for 31.2% of China's exports of goods and
services, worth more than $301.9 billion.
Guangdong is now the richest province in
mainland China, with its GDP expected to outpace
Taiwan in 2008. Taiwan is the
fourth-fastest-growing economy in Asia, with its
GDP reaching $323.4 billion in 2005.
Guangdong growing wealth has sharply
pushed up the cost of living. However, rural
migrant workers who have contributed to the
economic growth seem unable to enjoy the fruits of
success as their wages do not grow with the
economy.
As other Chinese regions close
the economic gap with Guangdong, more and more
rural migrant workers have turned away from the
province to work elsewhere, especially the Yangtze
River Delta. As many of the factories in Guangdong
were built 20 years ago, the heavily
industrialized province is finding it hard to
compete with the better wages and working
conditions in the delta, said Stanley Lau, deputy
chairman of the Federation of Hong Kong
Industries.
As rural migrant workers were
not satisfied with low pay and sweatshop
conditions in Guangdong, many of them refused to
come back to work for the same bosses after the
Lunar New Year holiday.
The labor-shortage
issue began to surface in Guangdong in 2004, when
a government think-tank estimated that the Pearl
River Delta, the province's manufacturing base,
alone needed an additional 2 million workers.
Since then, Guangdong has launched a
series of measures to lure back rural migrant
workers, including removing its decade-old ban on
hiring new migrant laborers in the month after the
Lunar New Year holiday and raising the minimum
wage. But it appears such measures are not
working.
A survey conducted by Guangdong
labor authorities showed that there were 7.3
million job vacancies in the province last year,
but only 4.82 million of them were filled, leaving
a shortage of 2.5 million, according to Xinhua
News Agency.
The survey said the
manufacturing, wholesale and retail, and catering
services faced the biggest shortfall of labor. Of
the 303 enterprises in Guangdong surveyed, 60%
suffered from a serious shortage of labor.
Labor experts blamed the exodus of workers
from Guangdong on the comparatively bad working
conditions, high living costs, and the
government's failure to help migrant workers.
Because of the rigid hukou (house
registration) system in China, rural migrant
workers and their families do not have access to
any of the welfare services available to city
dwellers. For example, their children, even if
they are born in the cities, have to pay higher
education fees than urban-registered kids.
Lau said the main reason for more migrant
workers not returning to their original employment
in Guangdong is the growing number of
opportunities in their home towns and the nearby
cities.
"As Beijing launched measures such
as tax cuts to boost farmers' income and the
enterprises in the Yangtze River Delta, close to
the rural areas in central and western China,
offering competitive wages and conditions, the
migrant workers preferred to stay in their home
towns or closer to their families," he said.
Chen Guanghan, director of the Center for
Studies of Hong Kong, Macau, and the Pearl River
Delta at Guangzhou-based Sun Yat-sen University,
said the shortage of labor has forced Guangdong to
undertake an economic restructuring to maintain
its growth.
"Despite the problem of the
labor shortage, Guangdong has experienced
continuous economic growth. This has indicated
[that] the capital-intensive and technology
industries and service industries are taking off
and offset the negative impact of the issues
facing the labor-intensive manufacturing
industries," he said.
Zhang Naijin,
director of the regional development center at the
Management Science Research Institute, echoed
Chen's views, saying that the shortage of labor in
the Pearl River Delta is strictly an issue facing
low-end and labor-intensive enterprises, which is
not a bad thing.
"The restructuring in the
Pearl River Delta can help further adjust the
labor demand and supply, and weed out the backward
and labor-intensive industries and enterprises
there,'' he said.
Last year, the primary,
secondary and tertiary industries in Guangdong
grew by 3.8%, 16.9% and 12.2% respectively.
However, such restructuring, painful as it
may be, is inevitable as Guangdong's labor
shortage is expected to worsen this year as its
demand for technically skilled workers rises by
20% and the number of ordinary workers needed
rises by 10%, according to the survey.
Olivia Chung is a senior Asia
Times Online reported based in Hong Kong.
(Copyright 2007 Asia Times Online Ltd. All
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