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
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure