Fri, Jun 04, 2004 - Page 10 News List

Manufacturers bemoan limits on foreign labor

CHINA'S SIREN SONG Companies warn that they will be forced to move west in search of cheaper labor if the government doesn't change its restrictive policy


Taiwanese companies that have resisted the lure of China by keeping their manufacturing bases at home are being forced to reconsider due to tough restrictions on foreign workers.

Locally based manufacturers are becoming increasingly worried about the new rules which require them to cut back on foreign workers, a policy the government is using to make room for companies with new investments of more than NT$200 million (US$6 million).

Far Eastern Textile Co (遠東 紡織), a bellwether for the textile sector with its core business operations here, says it has begun to feel the pinch of the tighter controls.

"If we cannot find people to do the job and keep our costs down, we will have no choice but to further move our factories elsewhere," warned a company official.

Far Eastern already has a presence in China. It has kept its local operations going mainly because the country offered a more skilled workforce, said the official, who wished to remain unnamed.

The company's foreign worker quota has already been reduced by 20 percent from three years ago to 1,100, with that number having to be cut by a further 10 percent every two to three years under the government's present policy.

"Many companies have already moved to China and the rest may be forced to leave Taiwan if they cannot find sufficient and low-cost labor here," said Chen Chih-peng, the head of a foreign-labor brokering firm.

With the shift of manufacturing to China, nearly 7,000 factories were shut down in this country last year, more than double the 2002 figure.

Theoretically, the acute labor shortage should have been dramatically relieved in the wake of the exodus. But that did not happen.

After enjoying years of comfortable lives in the nation's booming economy, many Taiwan-ese workers would rather stay idle at home than take low-paying jobs that require hard work, market analysts said.

"Foreign workers are more willing to work under harsh conditions and longer hours whereas domestic workers are not," the Far Eastern official said.

Taiwanese manufacturers employed 55 percent of the 298,480 foreign workforce in the country at the end of April -- mostly from Thailand, the Philippines, Indonesia and Vietnam, while the rest served as caretakers, maids and sailors.

The figure was down from a peak of nearly 330,000 in mid-2001, before the Council of Labor Affairs reduced labor import levels for manufacturing and construction to ease soaring unemployment.

Foreign blue-collar workers were first allowed into the country in 1989 to ease an acute labor shortage for public and private construction projects, but such demand has quickly shifted to labor-intensive manufacturing industries.

On average, foreigners in the manufacturing sector are paid about 80 percent of what workers of local origin earn.

"We hope to keep the foreign labor population at under 300,000 to minimize any negative impact on local workers," said Liao Wei-ren (廖為仁), director of the council's Foreign Labor Affairs.

But some experts threw their weight behind the government and urged local industries not to rely on low-cost foreign labor to sustain their competitiveness.

"The government should introduce more white-collar workers from abroad instead to help upgrade local industries," said Pan Shih-wei (潘世偉), a professor of labor studies at Chinese Culture University.

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