FocusChina coastal industries hit by post-holiday labour shortage

16 February 2011 05:48  [Source: ICIS news]

By Judith Wang

Chinese workers in a factorySHANGHAI (ICIS)--China’s labour-intensive manufacturing sector in the eastern and southern coastal regions is grappling with shortage of migrant workers following the Lunar New Year holidays, which will inevitably translate to lower production in February, industry sources said on Wednesday.

Among those affected were textile and toy factories that consume huge volumes of petrochemicals, they said.

Migrant workers usually head back to their hometowns during the week-long Lunar New Year holiday, which fell on 2-8 February this year.

The bulk of these workers opted to stay back and find jobs closer to home because the incentive to work in coastal regions was fast dissipating.

Chinese workers migrate to the eastern region to find employment because of the lure of much higher wages. But data from the National Bureau of Statistics showed that the salary gap between eastern and western regions had shrunk to 5% this year from 15% five years ago.

“The labour shortage is very severe in Shaoxing. Many textile companies could not recruit workers,” said a source from Shaoxing Chengzhongle Textile, which is based in Zhejiang province in eastern China.

She added: “If they could find a good job and get enough salary at home, why do they [have to] travel thousands of miles and take dozens of hours by train to work here?”

The tight labour supply conditions would force the manufacturing companies to hike wages in the hope of drawing in more workers, which would mean higher overhead production costs, industry sources said.

At a toy factory at Shanghai in eastern China, only two bus-full of its migrant workers came back to work, when in the previous years, it had to send out 20 buses for its returning labourers, China Central Television quoted the factory owner as saying.

In Guangdong province, official data showed there was a shortage of 1m labourers after the Chinese Lunar New Year.

“We employed 40 people last year and now only 10 [are] here. Job-hopping is very normal for them,” said a manager of a plastics company in Guangdong.

Some migrant workers, however, could be waiting out until the Lantern Festival on 17 February was over before going back into the job market to find work, industry sources said.

“Usually, migrant workers will come out to seek jobs after the Lantern Festival. I hope the situation will turn better soon,” said Fang Jun, an analyst from Shanghai-based Essence Securities.

Chinese companies keen on cutting down production costs have been moving their factories either to the western regions or further inland, thus providing stiff competition to the eastern regions in attracting workers.

In Chongqing in western China, companies had set up booths at railway and bus stations to coax workers that employment was available where they are, according to media reports.

Additional reporting by Dolly Wu

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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By: Judith Wang
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