Hong Kong firm with Fujian plants will raise wages as a draw A Hong Kong manufacturer is facing a labour crunch in Fujian, illustrating the changing labour dynamics in the southeastern coastal province. Tak Shun Technology Group, a Hong Kong-listed manufacturer of calculators, watches and liquid crystal displays, employs about 6,000 workers in its factories in Putian, Fujian, and plans to hire another 2,000 by the end of the year. But Tak Shun faces a labour shortage in Putian, which has a population of three million and thousands of factories competing for available labour, according to its chairman Lam Ping-kei. To attract local workers, Tak Shun plans to raise the average monthly salary from 600 yuan (HK$557) to 800 yuan and offer perks such as recreational facilities. Mr Lam estimated about one-third of the 2,000 new workers Tak Shun hoped to employ would have to be recruited from inland provinces. Previously, the company has been able to fulfil its worker requirement almost exclusively from the local labour pool. Workers from remote provinces are willing to work for lower wages than Putian natives, but incur additional expenses such as lodging and trips home. All things being equal, Mr Lam prefers not to hire workers from inland provinces but now has no choice. While recruiting migrant workers from China's interior provinces has been standard practice for years in the more established manufacturing heartlands in Guangdong, it is a relatively new phenomenon in Fujian. According to Hong Kong Trade Development Council chief economist Dickson Ho, most of the 10 million workers employed by Hong Kong factories in Guangdong hail from other provinces. Manley Toys chairman Samson Chan said in the first half of this year, the Sars outbreak compelled some workers in Guangdong to return to their home provinces and sparked a mild labour shortage in the province. Manley Toys is a Hong Kong manufacturer with operations in Dongguan. As the economy grows in China's inland regions, more workers are deciding to work closer to home. For instance, International Rectifier (IR), a United States manufacturer of power management systems, will increase its manufacturing staff in the inland city of Xian from 230 to 400 by 2005. Winnie Wong, IR's Asia-Pacific marketing communications director, said the company chose Xian over coastal areas in part because labour costs there were lower.