Delta 'labour shortages' called wishful thinking
Reports across the mainland of labour shortages in export-production hubs such as the Pearl and Yangtze river deltas appear to signal the return of overseas orders and a warming up of the economy. But industry insiders say the reports are nothing more than a political tool and merely wishful thinking.
In Shenzhen, labour authorities said businesses were short of more than 120,000 workers, six times the shortage in April, the 21st Century Business Herald reported yesterday,
Central China Television on Monday reported on labour shortages in several coastal areas, home to export-oriented factories. Zhejiang, for example, was short by 250,000 workers, the report said.
The situation was similar in Dongguan and Foshan in Guangdong and in Wenzhou, Zhejiang, media reports said.
However, insiders and observers are not so optimistic about the reason for the labour shortage. 'Yes, many factories here are hiring workers. But actually it is kind of an after-effect of the mass lay-offs of late last year and early this year,' said Chai Kwong-wah, president of the Hong Kong Small and Medium Enterprises General Association.
'Months ago in the darkest days of the economic crisis, all members of my association had to fire workers to save costs. I fired around 500 workers in April, almost 60 per cent of the labour force of my Shenzhen toy factory. I paid 2 million yuan (HK$2.3 million) in compensation for the lay-offs, amounting to two years of profits. But I preferred to do that, as I had few orders at that time and saw no future. I could not afford to keep so many workers.
'And it's not just me. The factory next to my toy plant also cut its labour force from 3,000 to just hundreds.'
Chai said many factories in Guangdong had been in semi-hibernation until recent orders for the Christmas season.
'That's why you see factories now beginning to hire workers again,' he said. 'But the orders are just seasonal and short-term for Christmas. So is the current labour demand.'
Dr Liu Zhenjie, of the Henan Academy of Social Sciences, said labour shortages were also the result of wariness among migrant workers and rising costs of living in the deltas.
'Most migrant workers from central and western provinces have been slow to return to the coastal region after the factories sacked many of them at the end of last year,' he said.
'Many of them can get jobs nearer their hometowns in central and western China, which is booming with government-run infrastructure projects, and the local cost of living is much lower than in the deltas.'
Chai said the outlook for next year was still unclear. 'I have dropped a few orders instead of hiring workers again,' he said. 'What should I do later if overseas orders don't keep coming in? Fire labourers again?'
Help needed
Mainland production hubs claim they are short of labour, but industry insiders say it's an after-effect of mass lay-offs
The shortage of workers in Zhejiang is reported to have reached: 250,000
