Twenty recruiters are seated at fold-up tables along a canal that separates two rows of shoe and handbag factories in Dongguan. Billboards tout monthly wages of Rmb1,800 to Rmb2,800 ($445) at a shoe factory and more at a technology company, but the alfresco jobs fair is missing one thing: workers.

While the weeks after Chinese New Year, which was celebrated towards the end of January, are traditionally the busiest period for jobs, recruiters in this part of the southern industrial city of 8.2m people outnumber potential employees by about four to one.

An hour away by train on the outskirts of Shenzhen, the special economic zone bordering Hong Kong, the scene could not be more different. About 1,000 workers queue for interviews at Foxconn, the Taiwanese maker of computers and mobile phones for a host of western brands, including Apple.

Monthly salaries at Foxconn are higher than clothing factories – from Rmb2,400 to Rmb3,500, including overtime – but, for many young Chinese, the cachet of working on computers is the real draw.

Zhu Fan, a 20-year-old from Hunan province, said he wanted a job at the huge factory so he could develop, as he strives to “make a step upward every two years”.

Younger workers, who are typically better educated, are attracted by the higher salaries at technology companies, where rapid productivity gains mean emp­loyers can pay more. But many also prefer them because they believe the jobs are more interesting.

China’s labour market, just like the country, is diverse. Electronics companies do not face big worker shortages. On the coast of Fujian province, for example, TPV Technology, a Chinese television manufacturer that last year bought Philips’ HDTV business, says hiring is on track.

But in Zhongshan, a southern Chinese factoryville like Dongguan where companies make everything from lighting fixtures to shoes, the local government said this week that many factories were delaying re­opening because the area was short of tens of thousands of workers.

For western consumers, that trend almost certainly means higher prices for everything, from jeans to handbags to shoes.

For China, it means a migration of some of these low-end jobs to countries such as Indonesia and Bangladesh where labour costs are lower. But it does not mean the end of China’s dominant position in manufacturing in the developing world, as the country’s clustering of supplier networks and first-world infrastructure means it is retaining a big share of these jobs and those in electronics despite the labour shortages.

To lure workers from competitors, many employers offer incentives such as dormitories with air-conditioners, a guaranteed hot water supply and better food in the canteen. In Dongguan, a sign-on bonus of Rmb400 to Rmb600 has also become widespread, yet employers still complain of being understaffed.

Leji Chengpin Leather in Dongguan raised salaries by about 20 per cent this year and recruited more than 60 workers. However, about 20 left within the first week, saying they were not suited to the work or were dissatisfied with working conditions.

“Today’s workers have many choices,” explains Zheng Bingjun, the company’s personnel manager. “If there is any dissatisfaction at work, they will change …Even as they enter the factory, they are thinking about leaving. My job gets more difficult every year.”

Mr Zheng requires team leaders to spend five minutes a day talking to recruits on issues at work, in an attempt to boost employee retention.

It is simplistic to assume that double-digit salary increases in China are translating into a hollowing-out of the manufacturing base, says Stephen Green, a Standard Chartered economist.

He notes that labour productivity rose 10 per cent annually from 2000 to 2010, about the same level as wages increased.

“China may be losing sock and T-shirt manufacturing to Bangladesh and Vietnam but, in mid-tech goods, its prowess is still unparalleled,” he says.

The age of staff in China, where most factory workers are in their twenties, is also set to rise, according to Capital Economics, a research company, as more people in their fifties continue to work.

On a dusty road in Dongguan, that is little consolation for Mr Liu, a shoe factory recruiter. He aimed to hire 200 to 300 workers but has only recruited a dozen over two days. His company set up a factory two years ago in the more northern province of Jiangxi, which is far less industrialised than Guangdong.

“It’s hard to find workers there as well. Labour costs [are] just Rmb100 to Rmb200 less,” he says.

Additional reporting by Zhou Ping

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