SHANGHAI–Textile manufacturers in two of China’s main export hubs are once again facing severe labor shortages.
Manufacturing and service industries in the Pearl River Delta, in the southern province of Guangdong, and the Yangtze River Delta, which is near Shanghai, are suffering the most acute shortages, according to a report published this week in the China Daily, the country’s government-controlled English-language newspaper.
The dearth of workers in the Pearl River Delta could be more than 900,000, China Daily reported, citing a survey by the human resources department of Guangdong. Guangzhou, Shenzhen and Dongguan, cities located in Guangdong, have a shortfall of 550,000 workers, the survey said.
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Attrition has been an ongoing problem in the country’s coastal regions. Stagnant wages combined with rising living costs are causing many, especially young, migrant workers to leave and not come back. Beijing is also promoting the development of inland manufacturing centers, which means that while workers may earn less money, they can stay closer to their families.
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The upcoming Chinese New Year celebrations in February could make the situation even worse. Millions of workers travel home over the holiday, and each year large numbers choose to stay home instead of returning to the coast.
“We are looking inland for a good position to open a new factory,” Liu Min Star, a sales manager with Ningbo Homeeasy Daily Use Manufacture Co., Ltd, said. “We want to have another sub-branch factory away from the coast so people will not have to go so far to work.”
Even with a 20 percent wage increase, Liu said the handbag manufacturer has lost 100 of its 300 workers this year.
“It is difficult to do business right now,” she said. “There is a lot of competition and more and more customers are asking for lower prices.”
Liu said the manufacturer’s profit margins have decreased by 10 percent due to wage increases and the rising prices of raw materials, especially cotton.
Raw cotton prices have hit historic highs for most of the year as demand has exceeded supply worldwide. The escalating cost of cotton is attributed to a number of factors, including weather, the growing popularity of biofuels and high prices for other crops, spurring farmers to plant other crops, like corn, soybean and wheat.
In July, The China National Textile & Apparel Council warned that half of the country’s textile companies could face bankruptcy due to rising labor and raw material costs coupled with an appreciating yuan.
“It’s getting worse every year,” said the owner of a garment factory near Shanghai who declined to be identified. “We have had to turn down orders because we don’t have enough people to manufacture the products.”
The factory, which makes slippers for export to Japan, has increased wages between 50 and 70 percent to try to lure workers back after the upcoming holiday, the source said. It currently has 40 unfilled job positions.
“Younger generations, regardless of educational background, are not willing to do labor work,” Carmen Law, operations manger for the Hong Kong-based Nationwide Garments Ltd., said. “Therefore there are less and less skilled people going into the textile industries or any manufacturing industries in general.”