South is short of workers – Trade orders boost demand for pre-holiday migrant labor

By Huang Daohen

Tackling the employment problem is no longer a worry for the politicians alone. Since early this year, factory owners in southern China have shared that headache.

But as orders pile up with the approach of the Christmas shopping season in overseas markets, factories in the Pearl River Delta and Yangtze River Delta have found themselves awash in orders.

The problem is everyone who came to staff these boom factories earlier in the year has left. In some of the most desperate areas, foremen camp outside bankrupt factories hoping to redirect former employees to where there the work.

Legendary recruiter

Zhang Quanshou, 40, “captain of the migrant workers,” is busy again.

He is the manager of Shenzhen-based Quanshun Human Resource Dispatch Company, an agency that sources migrant workers to fill the factories.

Earlier this month, he rushed back to his hometown, Zhumadian city in northern Henan Province, to recruit more workers. He needed a host of people to staff new and reopened Shenzhen factories with an emergency shortage of labor.

“It is harvest season, and farmers are unwilling to travel to the far south,” Zhang said. He managed to round up several hundred people on his trip: His goal was several thousand.

The shortage was seriously unexpected.

For a year, the global financial crisis has mercilessly slashed the demand for factory labor, which left Zhang’s firm with a backlog of workers. “At that time, my firm was  trouble,” he said.Things have changed.

Since July, the labor demands of Pearl River Delta enterprises have rocketed. The Shenzhen Labor and Social Security Bureau said the job shortage had become a labor shortage, and there were 60,000 unfilled positions in June.

Export-oriented enterprises have seen signs of recovery, Zhang said. Even as he spoke with Beijing Today, calls flooded in from factories in need of migrant workers.

Supply and demand

Zhang, a former migrant worker himself, founded his dispatch company in 2001. At that time, the shortage of migrant workers in the region had become critical.

Sensing the business opportunity, Zhang positioned his firm as a pooling center for migrant workers before deployment. Every year, he found work for hundreds, then thousands and then tens of thousands of migrants.

In better years, migrant workers from Henan, Anhui and Shandong provinces flocked to his company. They were usually put up for two or three days in Zhang’s firm before being dispatched to local factories.

While waiting for a job, the workers’ accommodations and meals were covred by Zhang’s company.

The financial turmoil changed all that. As demand shrank in the international market, trade orders for factories in Guangdong fell by 30 percent, and then 40 percent last year. Many factories had to lay off staff; some shut down.

With the jobs gone, the migrant workers returned home. In the first quarter of this year, employment in Guangdong fell 20 percent year-on-year, according to the Guangdong Bureau of Statistics.

Though the situation is now more optimistic, Zhang worries about the hardship of placing migrant workers in jobs. Over the last year, more and more of the workers he placed were returned to his camp.

“It was horible when the factories told me that there would be no more jobs for workers,” he said.

Now, Zhang said he is adding training programs to meet the market demand. But he said the training can only cover basic discipline, like behavioral guidelines: “No spitting. No smoking or drinking on the job. No fighting. No weird clothes.

Analyst

The shortage of migrant workers may be a sign of economic recovery, but we should not be “blindly optimistic” about the economy, said Zhao Xiao, a professor of economics at the University of Science and Tecology Beijing, citing Premier Wen Jiabao.

Positive factors including infrastructure projects, expanding domestic demand and restructuring have led to the recovery of Guangdong’s economy, Zhao said.

Besides, the labor demand along the coast is partly driven by the Christmas shopping season in overseas markets. “Western companies need products made in China. We get new orders. Our migrant workers get new jobs,” Zhao said.

The employment situation in Guangdong is closely linked to foreign trade, he said.
Recently, foreign trade in Guangdong rebounded, and the decline in exports has slaowed to 21.2 percent in May, 18 percent in June, and 15.1 percent in July.

Zhao said the labor shortage will ease in September.
As for economic recovery, Zhao said the July data pointed to continued recovery in the second half of this year, which is led by strong government-backed investments.

The surge in bank credit in the first half provided funds for investment growth, but it has also generated concerns about rising inflation, non-performing loans and asset bubbles, he said.

Market watch: Labor shortage spreads

The labor shortage is not limited to Shenzhen: The Yangtze River Delta now shares the burden.

Wenzhou, Zhejiang Province, has about 100,000 job vacancies, according to the city’s statistics bureau. New orders in the city’s textile sector increased 20 percent in July, while the city’s fore trade volume grew to 1.34 billion yuan, up 10.1 percent over the previous month.

In the first half of this year, sales of domestic-oriented brands grew 30 percent, according to the Wenzhou Fashion Association.

“Last time we saw such a severe shortage in the manufacturing industry was in 2005,” an official told th21 Century Business Herald.

Another city in the region, Dongguan, Guangdong Province – hit hard by the global financial crisis  now faces a labor shortage. As the macro economy recovers, companies and governmental agencies are asking inland and western regions for more workers.

A human resources manager was quoted by Xinhua as saying the company is using all possible channels to find workers, including job hunters, job fairs, ad postings and camping outside bankrupt factories.