Page last updated at 06:48 GMT, Monday, 22 February 2010

China's Pearl River manufacturing hub 'lacks workers'

By Chris Hogg
BBC News, Shanghai

A worker welds on the Yellow River railway bridge, central China
China's stimulus measures may be keeping workers from migrating

China is facing a shortage of workers in the Pearl River Delta manufacturing hub in southern China.

Some estimates suggest factories need two million more migrant workers from other parts of China.

The shortages have been highlighted in Chinese media as the country gets back to work after the week-long Spring Festival, or Lunar New Year holiday.

Expectations of higher wages and better working conditions from new workers are being blamed for the labour shortage.

Factories in southern China started reporting that it was hard to find enough workers last August, as orders picked up after the financial crisis.

More choosy

Now, the country's state media report, the shortages are becoming significant.

Low pay is a major factor. The companies that find it hardest to recruit, and then retain workers, are those involved in low value, labour intensive manufacturing.

Chinese workers in Shenzhen queue up to enter factory

Migrant workers used to travel from all over China for those jobs.

But last year many of them found work that paid similar salaries closer to home, working on the infrastructure projects funded by the country's economic stimulus package.

They are still building the roads, airports and railways the government has funded.

Beijing's own research suggests that each new generation of workers is better educated, and has higher expectations in terms of salary, labour conditions and rights than those that came before them.

They are more choosy about what kind of factory they want to work in.

Some experts point out though that if companies are faced with a shortage of workers, that could force them to invest in new technology.

In that way the shortages may actually help to speed up the transformation of the economy here into one that is less labour intensive, delivering higher value.

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