The advantage of low costs for Chinese products is eroding as employers on the Chinese mainland suffer a shortage of labor, which, in turn, is compeling businesses to resort to technical upgrading for survival and development.

Human resources officials say a job fair last week in Shangqiu, a major supplier of migrant workers, in central China's Henan Province, attracted 158 enterprises from outside the province, needing to recruit 32,000 people. In comparison, 32 enterprises from outside offered 11,000 positions at the fair at the same period of last year.

Migrant workers have contributed significantly to China's economic boom over the past three decades and number around 200 million nationwide.

Mo Rong, deputy head of the research institute for labor science under the Ministry of Human Resources and Social Security, said a survey conducted by the ministry found 62 percent of migrant workers questioned said they would return to work after the Lunar New Year holiday (Feb. 13-19), during which most migrant workers usually returned home. Thirty percent of the surveyed hesitated on whether leave home or not.

Data provided by the human resources market in eastern China's Zhejiang Province, showed that in the first week after the Lunar New Year holiday, 408,600 jobs were offered, up 19.1 percent on the same period last year. But registered job-seekers numbered 106,800, down 27.9 percent.

The Zhejiang survey team under the National Bureau of Statistics found 52 percent of enterprises in the province, with orders in hand, found it hard to recruit workers after the Lunar New Year holiday.

Zhu Qingniu, general manager of Zhejiang Jiangnan Print and Dye Company in Keqiao, Shaoxing, said his company offered an average monthly salary of 2,300-2,600 yuan and free accomodation.

"These conditions are relatively liberal in Shaoxing, but we still found it difficult for recruit enough workers,"he said.

Fu Furong, head of municipal trade union of Quanzhou, eastern China's Fujian province, said the city would see a labor shortage of 153,000 people this year, mainly in the clothing, headwear and footwear, ceramics, resin and food processing sectors.

In Guangzhou, capital of south China's Guangdong Province, the center of the nation's export base, the shortage is estimated at 150,000 this year, mainly for processing and manufacturing as well as modern and traditional services sectors. The annual shortage for Dongguan, also a leading exporter on the Pearl River Delta, is forecast at 200,000.

Meanwhile, Henan province, a leading supplier of migrant workers, saw its annual labor increase at 1.1 million in 2009, down from 2 million in 2007 and 1.8 million in 2008.

LABOR SHORTAGES

Mo Rong, a senior researcher with the Ministry of Human Resources and Social Security, attributed the labor shortages to greater demand driven by the economic recovery and growth in orders received by exporters.

Pay remained relatively low in labor-intensive enterprises in the economically-developed coastal regions, where living costs were higher than other places. This accounted for labor outflow from the coastal areas.

Values and attitudes had changed among laborers born in the 1980s and 1990s, which was another factor behind the outflow of labor from regions along the coast, mainly Yangtze River Delta (Shanghai, Zhejiang and Jiangsu) and the Pearl River Delta.

The new generation, estimated at 100 million, was more aware of their legal rights with employers, and had higher requirements of income and chances for personal development. They also had needs in cultural and spiritual terms, said Mo. A slight increase in pay would not move them.

Zhao Chengbao, a job-seeker in Quanzhou, Fujian Province, weighed the costs of staying at home and leaving. He said if he earned 1,500 yuan a month in Quanzhou, only 500 yuan would be left after deducting 500 yuan for food, 200 yuan for rent and other daily costs, including transport.

Huang Shaojun, 45, a carpenter from Chenzhou, central China's Hunan Province, who had worked in the southern city of Guangzhou for many years, decided to look for a job in the provincial capital of Changsha this year.

"There are more jobs offered in Changsha. I want to find a job with light work load," he said.

Though he could earn 1,800-2,000 yuan a month in Guangzhou, he would rather choose Changsha for a 1,500-yuan monthly wage.

Li Xiaoli, head of rural labor, in Meizhou, Sichuan, also a traditional labor force supplier in southwest China, said the city needed more workers for the fast-growing local economy. In the city's Dongpo district alone, 20,000 workers would be needed this year.

RECRUITMENT DRIVES

In addition to an average pay increase of 9 percent, according to the survey by the Ministry of Human Resources and Social Security, many coastal enterprises are set to offer more faborable conditions.

Wu Zhangwei, an official with the municipal trade union of Quanzhou, said the city allowed migrant workers to buy homes there after they had rented a house in the city for three years.

If a migrant worker in the city paid 3 yuan every month for health insurance, they would get medical and phamaceutical costs valued at 30,000-yuan covered from the city's medical welfare system every year. The migrant worker could also enjoy 500,000-yuan insurance cover for accidental injury.

Suzhou Ju Teng International Holdings Ltd. in Suzhou, east China's Jiangsu Province, has established a library and recreational zone for staff and earmarked more than 1 million yuan for lottery tickets for them every Spring Festival. The luckiest would get a reward of 10,000 yuan.

The company, which needs 5,000 workers this eyar, has recruited 2,000 so far.

Compal Electronics Technology (Kunshan) Co., Ltd., a subsidiary funded by leading laptop computer manufacturer Compal in Kunshan of Jiangsu province, has raised the salary for each of its productive employees by 15 percent. It established cooperative relationship with occupational training schools in Siyang of Jiangsu and Guangyuan of Sichuan. Up to 400 trainees from one of the schools, which specialize in electronics, mechanics and computer science, will enter the Compal Electronics Technology.

The Ju Teng International Holdings Ltd. has signed an agreement with a technical worker training school in Yuzhou of Henan. It will annually inject 300,000 to 500,000 yuan into the school, and hopes the school can provide 3,000-5,000 workers every year.

RESORT TO TECHNICAL UPGRADING

Trina Solar Limited, a U.S.-funded solar PV (photovoltaic) modules producer in Changzhou of Jiangsu province, will face a labor shortage of 6,000 people if it puts two new production lines into operation this year.

The order books had been full for the year and it was time for the company to improve its R&D if workers were not sufficient, said Sean Tzou, CEO of the company.

Tzou said Trina Solar had its annual production capacity expanded by seven folds since 2008, but its workforce only grew by 70 percent. Technical upgrading managed to offset demand for low-end laborers.

The priority in upgrading was human resources, said Xu Xingming, vice general manager of the Compal Electronics Technology (Kunshan) Co., Ltd. The company had joined with Xi'an Jiaotong University in Xi'an, capital city of northwestern China's Shaanxi province.

The company has arranged 100 employees to learn the university's classes through remote education. A third of them, who majored in computer science and management, would be promoted after finishing the training courses, said Xu.