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In China's Cities, a Turn From Factories

Labor Pool Shifts As Urban Workers Seek Better Lives

By Peter S. Goodman
Washington Post Staff Writer
Saturday, September 25, 2004; Page A01

DONGGUAN, China -- In a country with a supposedly bottomless supply of labor, the Daojiong Hequn Plastic Processing factory has somehow hit bottom. The plant in southern China can no longer find enough young women willing to spend their hours bending over machinery slicing artificial hair for toy dolls bound for the United States.

The $50 monthly pay is too little. The 14-hour days are too long. In China's burgeoning economy, there are better opportunities elsewhere.

Yang Weng, a villager from outside Chongqing, has returned home jobless after failing to find decent factory work in Guangdong, a southern province. (Peter S. Goodman -- The Washington Post)

Throughout the southern province of Guangdong, whose factories produce nearly one-third of China's exports, and in other industrial areas along China's coast, labor is suddenly wanting -- particularly the 18- to 24-year-old women who have become the staple workers of China's export trade.

According to a recent report from the Ministry of Labor and Social Security, China's factories lack 2.8 million workers, 2 million alone in the prime manufacturing zone along the Pearl River Delta.

It is not so much a labor shortage -- there are still tens of millions of peasants and former employees of the state-owned factories who need jobs -- as a mismatch between the cutthroat wage demands of the export trade and the rising expectations of Chinese workers. The government report blames the situation on poor working and living conditions, stagnant pay and chronic violations of China's labor regulations in the sprawling manufacturing towns that have based their growth on selling to the world market.

Where once a paycheck, even under harsh conditions, was enough to entice tens of millions of people to leave their villages in China's interior and flock to factories on the coast, workers are beginning to turn their backs on the prospect of laboring in 100-degree heat, living in rat-infested dormitories and being cheated out of their earnings.

They are instead staying in their home villages to take advantage of rising farm wages -- up 15 to 40 percent in the past year as the government streamlines taxes and as growing domestic spending power raises the price of vegetables and meat. Or they are finding jobs closer to home in the factories sprouting up in inland cities along China's expanding road and rail networks.

At bus and train stations here, migrant workers carry belongings in plastic sacks, headed back to villages in the interior. "The wages are too low and the work is too hard," said a 21-year-old man from Guangxi province as he waited to board an all-night bus home. "It's a waste of time."

As more and more of the world's manufacturing shifts to this country of 1.3 billion people, the notion has taken hold that China has so many peasants in such desperate straits that it will continue to press global wages lower for decades, particularly given that independent labor unions are banned and even the threat of organization meets with stiff prison sentences. Now, some economists foresee steady wage growth here, as factories are forced to improve working conditions to keep operations running.

"Manufacturing wages are going up, and they are going to keep going up," said Jonathan Anderson, a former International Monetary Fund official and now chief economist at UBS Investment Research in Hong Kong.

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