The persistent labor crunch in China that is pushing up wages is taking its toll on Taiwanese businesspeople there, Luo Huai-jia (羅懷家), deputy executive director of the Taiwan Electrical and Electronic Manufacturers’ Association (電電公會), said yesterday.
“China’s labor shortage has had a serious impact on Taiwanese businesses over there,” Luo told the Taipei Times by telephone yesterday, adding that it was a long-standing problem.
Luo made the comment after the Council for Economic Planning and Development (CEPD) published a report on Wednesday saying that the jump in China’s export orders amid the global economic recovery was causing a labor shortage.
HIGHER WAGES
To reflect its booming economy, the government of Jiangsu Province increased its minimum wage by 13 percent starting on Feb. 1, while the city government of Guangzhou is expected to raise its base salary from 860 yuan (US$126) per month to 1,000 yuan, the CEPD said in the report.
But many companies are saying that even after raising their pay to more than 1,500 yuan per month, they are struggling to find workers, the report showed.
VOCATIONAL SCHOOLS
Under pressure from the labor crunch and increased production costs, Luo said China-bound Taiwanese businesses were cooperating with local vocational schools in hopes of mitigating the impact.
“They [Taiwanese businesses] are also prepared for the possibility of having to move factories to lower-cost countries, he said.
CAUGHT OFF GUARD
Many Taiwanese computer hardware manufacturers did not try to persuade employees to stay late last year — when many migrant Chinese workers return home to avoid the travel rush ahead of the Lunar New Year — as they expected weak seasonal demand in the first quarter, Citigroup Global Markets analyst Kevin Chang (張凱偉) said last week.
“The unseasonably strong first-quarter [orders] caught many companies by surprise, leading to a shortage of labor,” Chang wrote in a client note on Feb. 6.
But Chang said he believed the labor shortage had eased since companies began offering additional financial incentives for workers.
“While the booming inland economy and rising living expenses in coastal areas make it more difficult for hardware companies to hire, we view it as a problem that money can solve,” he wrote.
POPULATION CHANGES
In its report, the CEPD attributed China’s labor shortage chiefly to the country’s one-child policy and various measures implemented by Beijing to encourage migrant workers to return to their hometowns to participate in local development.
Citing a report by the Institute of Population and Labor Economics under the Chinese Academy of Social Sciences, the CEPD said that the labor supply in China would likely stop growing this year and begin to contract 10 years from now.
“The labor crunch has become a special sign that the Chinese economy is bouncing back from the global economic downturn,” it said.
ADDITIONAL REPORTING BY KEVIN CHEN
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