From Nation, page 12, issue 337, Oct 15, 2007
Translated by Zuo Maohong
Original article: [Chinese]

The Pearl River Delta is struggling with a labor shortage that is only becoming more and more severe.

Driving past the myriad of industrial parks that populate the Longgang strip of the Shenzhen-Shantou Highway, one can't help but notice banners with phrases like "many workers wanted" flashing by.

"Newspapers exposed a labor shortage [in Shenzhen] of 100,000 workers in the spring of 2004, but the government refuted it," says Liu Hongqiang, a Hong Kong businessman. "Then in 2005, reports put the shortage at 300,000, and again the government dismissed it as a structural problem. Meanwhile, my company is short of all types of labor, from entry-level up to management"

Since starting his business in Shenzhen a decade ago, Liu now owns two electronic components factories in Longgang. Three years ago, crowds used to gather at the factories' gates every day, hoping to get a job with a humble wage. But today the factories can't recruit enough workers even though wages have doubled. Thus, many positions go unfilled.

The Government Responds

According to a report published by the Shenzhen government, labor demands for the second quarter of 2007 increased more than 13 percent, with 470,000 positions unfilled.

To counter this, one official from a labor department in Shenzhen tells us that that the government is working out a platform whereby governments of major sources of outbound rural workers can sign a long-term labor supply agreement with Shenzhen.

Recently, the labor departments of 14 major sources of outbound rural workers—including Hunan, Jiangxi, Guizhou, Guangxi, and Chongqing, have been invited to the "Golden Road Project" Regional Labor Service Cooperation Expo and Technical Talent Job Fair in Shenzhen, where altogether 2,300 technical professionals and 80,000 unskilled workers were recruited.

"In the past, regional labor partnerships were only established between like administrative entities, such as between cities. Shenzhen is taking the lead in communicating directly with both provinces and cities." says Song Xianhua, director of the employment office of Shenzhen Municipal Bureau of Labor and Social Security.

The "Golden Road" Project

Shenzhen has for years been a dream employment destination for rural youth in southern China. Statistics put over 7 million laborers in Shenzhen today, the overwhelming majority of whom were former farmers. However, as more and more inland regions open to the outside, many laborers are sidestepping Shenzhen and moving elsewhere.

The so-called "Golden Road" project presents what they hope will be a lasting solution to the labor shortage problem. According to Song, Shenzhen will adopt a "talent reserve" policy in the near future, that is, to entrust labor supply and training to corresponding labor sources when workers with particular skills are needed. Experiments on the policy are presently being carried out in areas such as Heyuan in Guangdong province.

Huang Zaoji, deputy director of Shenzhen Municipal Bureau of Labor and Social Security, thinks that the project is a breakthrough in widening partnerships outside the Pearl River Delta.

More Moves to Go

Some analysts believe that, to a large extent, the said "recruitment agreement" between local governments shows the governments' determination to openly interfere with the labor market. According to Guan Lingen, director of Shenzhen Municipal Burea of Labor and Social Security, a lot more must be done concerning labor service cooperation to thoroughly solve the outstanding labor shortage problem.

Guan first pointed out that labor service cooperation and rural laborer employment should be pursued in regional economic and social development programming.

Secondly, local governments need to establish a lasting system for labor supply and demand information. Such labor service cooperation expos, such as the one held recently in Shenzhen, should be conducted on a regular basic.

Thirdly, the import and export of labor force should be more systematized by adhering to the terms of the labor partnership agreement.

Lastly, a follow-up management and service system should be established after the import of labor. Major provinces and cities with greater amounts of labor export to Shenzhen should be encouraged to set up certain labor administrations in the city so that local concerned departments can better perform follow-up service.

In fact, it is the growing demand for labor that compels the local government's devotion to protect rural workers' rights and conduct relative technical training.

According to Guan, Shenzhen's public employment media has provided services including policy counseling, recruitment information supply, employment guidance to rural workers for free since 2006. Meanwhile, over 15.6 million rural workers attending technical training have enjoyed training subsidies.