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SCMP Reporter

About 22 million residents have left the poor, inland province of Henan  to become migrant workers in the mainland's coastal factories, but that could all be about to change.
Zhengzhou, the provincial capital, recently took just a month to build a production line for Taiwanese IT giant Foxconn, which plans to move 300,000 jobs to the city. 
In June, top Henan officials led a team to Foxconn's main Shenzhen plant to negotiate the transfer deal. In July, Hon Hai, Foxconn's parent, finalised plans for a new factory in Zhengzhou, costing about 2 billion yuan (HK$2.3 billion).
On August 2,  Foxconn's first production line, employing 2,000 workers, started operation in Zhengzhou. 
Foxconn now wants to recruit 100,000 people in Henan by  year's end - and a total of 300,000 in the next few years.
Henan officials point to their success in luring Foxconn, the world's biggest electronics contractor, as a great example of  Beijing's plan to move labour-intensive factories away from polluted and crowded coastal areas to the vast interior, allowing more developed areas to move higher up the value chain with more capital-intensive industries.
'Exports have been always weak because we lacked export-oriented manufacturers,' says Henan party secretary Lu Zhangong. 'Now, Foxconn alone will double Henan's export value next year. Let others follow. Foxconn will also help create half a million new jobs here. That means many Henan natives can work close to their homes and never need to migrate.' 
The authorities say Foxconn's Zhengzhou plant will make Apple iPhones and be capable of producing 200,000 units a day next year. It's exports will be worth US$13 billion annually - more than the province's total last year. 
Lu expects thousands of other companies, including suppliers and logistics service providers, will follow Foxconn to Henan as labour shortages, soaring wages and land prices make the Pearl River Delta less attractive. 'Henan is now in a new epoch of attracting investment,' he said. 'I'm confident that the value of annual exports will double next year and triple within the next three years.'
Industry observers and the media say Henan offered Foxconn free land, export rebates and subsidies. 
But Lu said: 'Our sincerity inspires Foxconn. Nowhere else could prepare anything for Foxconn in only one month. But Henan did.' 
Foxconn says about 130,000 workers will have to be sent to Shenzhen for training to be ready to work in its new plant in Zhengzhou by the end of next year. That's triggered a spate of job-hopping in Henan and led local enterprises to see Foxconn as a serious threat. 
A senior human resources manager at Foxconn said every subdistrict in Zhengzhou and several neighbouring cities had been ordered to recruit workers.
'In August, we had already recruited 20,000 people and sent them to Shenzhen for training,' the  manager said. 'In September, we will send another 35,000 people. The Henan people are very enthusiastic, with more than 3,000 people competing for 10 supervisor positions.'
He said the massive response to the recruitment drive suggested that people in Henan were not worried about the spate of suicides at Foxconn's Shenzhen plants this year, blamed by some on stress induced by the company's management style. 
Despite earlier reports that basic salaries in Zhengzhou would match the 1,200 a month paid to workers at Foxconn's Shenzhen factories,  Foxconn plans to pay its Zhengzhou workers a basic salary of 850 yuan a month. Their monthly income will range from 1,600 yuan to 1,800 yuan, about 600 yuan less than their counterparts in coastal provinces but higher than at Zhengzhou factories.
'Everyone is talking about quitting and joining Foxconn,' said Zhang Ping , a  worker at a textile plant. 'Foxconn's offer is not that  attractive in Zhengzhou. But  Henan is a labour market with 100 million people. A farmer usually earns a few hundred yuan a month.'
Many other inland cities are also looking to Foxconn to boost exports and their economies. The company is reportedly planning to invest billions in a new base in Chengdu, Sichuan , where another 100,000 people will be hired. 
Foxconn chairman Terry Gou says he has plans for several  projects near inland cities and is looking for the best deals in terms of policies and services. 
Not everyone is singing Foxconn's praises. Sociologist Liu Kaiming, at Shenzhen's Institute of Contemporary Observation, said local governments focused only on the economic benefits of hosting the IT giant's activities while ignoring its sweat-shop-style management.
'No matter where Foxconn plans to relocate, it's only profit-hungry,' Liu said. 'Foxconn's clients, like Nokia and Apple, spread across the world. To keep its profit, the labour-intensive manufacturer has to cut labour costs and bargain  for preferential duties and free land.
'I see little change in Foxconn's strict management style and inhumane work environment despite the worker suicides. In Shenzhen, about 6 per cent of its 400,000 workers quit each month,  dissatisfied with conditions. I think we can expect the same at its Zhengzhou plant. 
'Also, Foxconn is the largest exporter in China but its tax contribution to the country lags far behind. It's totally unfair and depressing to see local governments blindly offering Foxconn benefits when it depends on overloaded workers' low pay.'
According to Guangdong tax authorities, Hongfujin (Shenzhen), Foxconn 's wholly owned subsidiary in Shenzhen, paid 599 million yuan in state and local taxes last year but exported more than US$13 billion worth of goods. In contrast, mainland telecommunications equipment maker Huawei, whose exports were worth about US$12 billion, paid more than 2 billion yuan in tax.
Lin Jiang,  an economist at Guangzhou's Sun Yat-sen University,  said Foxconn kept its headquarters in Taiwan but had set up subsidiaries to run its mainland plants, churning out components with low profit margins and occasionally even taking losses to gain business. Such subsidiaries paid limited income tax. 
'That's why its export value is so big each year and the tax payment is not proportionate,' Lin said. 'Foxconn was very smart to set up many subsidiaries. Such enterprises take advantage of  cheap labour and contribute little to government income and development.'
Employment exodus
One of Henan's major exports has been its workers. The number of people who have left the province as migrants is about, in millions: 22m



Foxconn option for Henan's migrating millions