China sees fierce regional competition for skilled workers

China's coastal cities are facing the pressure of a severe labor shortage as the country's western interior catches up as a magnet for skilled workers.

The situation came to the fore following publication of a survey on Monday showing a shortfall of 123,300 workers in Guangzhou, capital of south China's Guangdong Province. Eighty percent of the surveyed companies expressed concern about production recovery after the Spring Festival holiday.

Chinese migrant workers traditionally return to their hometowns to mark the lunar New Year and look for new jobs following the holiday. This year, the shortage has been particularly pronounced, according to the Guangzhou Human Resource Market Service Center, the government-led employment agency that conducted the survey.

A similar warning was issued on Tuesday by the Fujian provincial government. Wang Jianmin, deputy chief of the province's human resources and social security bureau, told Xinhua that the coastal province faces a shortfall of 80,000 labors.

To quench the thirst for labor, company owners along the east coast are rushing to the western interior to hire new recruits, fueling a tug-of-war amid intensified competition for skilled workers.

Tuo Yan, manager of the human resources department of the Ningbo-based Xinda Electronics Co., Ltd. in the eastern province of Zhejiang, said that she went to southwestern China's Chongqing Municipality to recruit new workers, but managed to hire fewer than 80 people and filled just 40 percent of the company's target.

Li Runcai, managing director of Qiyun Plastics, a Guangdong company specializing in making plastic products, went to several job fairs in Chongqing as well, where he hoped to fill the job vacancies in his company.

"A good number of workers previously working in the Pearl River Delta have gone back to Chongqing, a big labor pool in China, and it's getting harder to hire them back," Li said.

Industry insiders attribute the lack of workers in China's coastal east to a spate of factors, including high living expenses, rising labor costs, and a shrinking income gap.

DELAYED RETURN MARS COASTAL PRODUCTION

The end of the Spring Festival holiday usually marks the beginning of a new workload in coastal cities, but the postponed return of migrant workers is marring the plans of company owners desperate to resume production.

In Hangzhou, capital of Zhejiang Province, recruitment ads can be found on the front doors of restaurants near the busiest roads, a common tactic to ease the typical post-holiday labor shortage.

Zhang Jinxin, owner of a chain restaurant on the crowded Wulin Road, said that his catering staff are now thin on the ground as more than half of the chefs and waiters he hired haven't returned after the week-long holiday, which ran from Jan. 31 to Feb. 6.

Similar situations can be found in Guangdong, where manufacturers are moving heaven and earth to hire new workers to get their factories rolling.

But the hiring process has yielded unsatisfactory results because skilled workers are "not that easy to find," said He Mu'an, head of the Dongneng Mechanical and Electrical Engineering Co., Ltd., located in Dongguan City of Guangdong.

"This is an annual travail for us," He said.

Zhang Weiguo, director of the Institute of Economics with the Shandong Academy of Social Sciences, sees the shortage of labor along the coast as a sign of conflict between spiraling company benefits and workers' demands for higher income.

"Small and medium-sized companies have generally increased payment, but that is dwarfed by soaring commodity prices," Zhang said.

Migrant worker Zhu Shiyu, who works for an electronic meter manufacturing factory in Zhejiang, agrees.

"My gains are basically eaten by living costs," Zhu said, adding that he has to think very carefully before smoking a cigarette or making a phone call.

Moreover, it's difficult for people like Zhu to settle in coastal cities due to hurdles such as lack of medical care insurance, pensions, and other social benefits, which constantly make their lives unstable.

RISING WEST A NEW CHOICE

As high living costs in the east have smashed the dreams of many workers, rising labor demands in less-developed and less-expensive western regions seem to be a better choice.

The huge inflow of foreign capital and the emergence of industries such as electronic devices have fueled an insatiable demand for migrant workers in the west.

In Chongqing, major districts such as Yongchuan, Hechuan and Fuling need at least 15,000 laborers each year, driven by a campaign by local government to boost the local economy, according to official statistics.

In Hechuan District, the local industrial park required more than 20,000 laborers in 2013, prompted by sectors such as car assembly, electronics and machinery.

According to the municipality's labor department, laborers in Chongqing who chose to work in the city's vicinity outnumbered those working outside the municipality for the first time in 2011, and in early 2013, the difference exceeded one million.

In the central province of Henan, an area with a large number of outbound laborers, a staggering 3.86 million more people chose to work in the province rather than making ends meet in other places in 2013, official data showed.

According to the National Bureau of Statistics, the number of migrant workers in central and western regions grew more quickly than that in the east in 2012, and the proportion of migrant laborers in the Yangtze River Delta and Pearl River Delta that year fell by 0.5 and 0.3 percentage points respectively.

The shrinking income gap between the east and west is an advantage that has wooed migrant workers westward, according to investigations by labor departments and employment agencies in various localities.

The income gap in electronics companies, for instance, has shrunk to 400 yuan (66 U.S. dollars) at present from 1,400 yuan in 2008.

Many migrant workers move home to take care of family members, or because they want to start a career on their own with the money they have earned in big cities, according to Fu Liqun, a research fellow with Hangzhou's Academy of Social Sciences.

As urgency for change mounts, companies in the east are mulling measures to reverse the outflowing trend.

Xiao Xuebing, vice-board chairman of Wingtech, a Zhejiang-based mobile phone design and production company, said that the company will increase workers' salaries by as much as 20 percent in order to survive in the face of cutthroat competition.

"We will also improve the welfare of our workers," Xiao said.

In addition to the efforts of the companies themselves, Fu Liqun said that the government must take a trailblazing role in guiding companies toward restructuring to survive labor shortages.

"The government could provide preferential policies for companies that have market potential," Fu said.

He added that the country's western and eastern regions should improve connections and communication during industrial transfer, which could help make the best of resource distribution.