For Shen Feng, choices are even less. His LED belt factory is struggling to maintain operations, though he has felt the growing pain of rising costs. "Why should I stay in Dongguan when I have to pay 3000 yuan for a trainee here while I can hire one at 1000 yuan in my hometown," Shen complained. He said many inland cities are offering policies far better than Dongguan, and that the labor cost there is relatively cheap.
In fact, the contradiction in factory cost cutting and rising worker demands has caused a labor shortage in Dongguan since 2009. Mayor Yuan Baocheng admitted that the former magnet for workers is losing its competitive edge to other world factories due to outdated facilitating policies.
The New Normal
Under such pressure, local authorities have launched two schemes since last year to replace workers with automation in factories and upgrade its manufacturing industry with innovative businesses.
Accordingly, Zhang Jie, a former plasterboard dealer, started a new business to develop laser lenses with the help of six doctorate holders. "Profit in the first year was even more than total earnings from selling plasterboards," Zhang said.
"Please stop adding labels to Dongguan," said a unanimous local official. "Both 'world factory' and 'sex city' is creating a false image of the city," it was added in reference to a previous scandal involving Dongguan's indecent underground entertainment industry.
The official also asked for a rational attitude towards the recent wave of factory closures, describing it as a must for Dongguan's transformation. "Figures will speak for themselves," the official said, adding that the city has maintained economic growth, though slow.
Yuan said 243 enterprises worth $330 million have been moved out of Dongguan so far this year, while 698 new projects with a value of $3.85 billion will be rolled out in the same period, logging a 17.7 percent year-on-year increase.
The mayor added that the shutdown of cell phone part makers is a result of market competition, and that it is insufficient in describing the local manufacturing business.
Yuan said Dongguan has also entered a new normal, which will feature a quality- and efficiency-driven as well as sustainable economic model.
