Critics are calling on the Chinese government to overhaul the hukou household registration system. They say it deprives millions of rural migrant workers of vital public services in cities, creating what has been described as China's apartheid. There has been much discussion at the National People's Congress this month about changing China's household registration system, called the hukou.

China’s Supreme Court announced Thursday that the number of labour disputes handled by the country’s courts increased by a further 10.8 percent last year, after nearly doubling in 2008. In total, there were 317,000 labour dispute cases in 2009, Supreme People’s Court President, Wang Shengjun, stated in his work report to the National People’s Congress, compared with just 126,000 such cases in 2006.

Huada Electrical Appliances has piles of orders from abroad -- a welcome sign that China's exports are bouncing back after the global economic crisis. But the television and computer components company has just one-fifth of the 300 people it needs to work the assembly line to fill those orders by the end of June. "Our hair is turning grey because of the anxiety," a company executive, who would only give her surname Wu, told AFP, explaining that the firm was recruiting everywhere -- on pavements, near food markets and with job agencies.

In the old days Guangdong migrant workers like Liu Xiaorong would have been treated as factory fodder, given the bare minimum in wages and easily replaced if they complained. The tables have turned with an acute labour shortage in the so-called "factory of the world" meaning workers like Liu now call the shots. Even the lure of three times the normal pay and perks such as air conditioning, basketball courts and television is not enough to get workers to sign up.

Buoyed by a wave of new orders, Chinese companies are scrambling to recruit manual laborers, as pressure mounts on the country's lawmakers to boost the rights of China's millions of migrant workers.

If you ask a factory worker or a waitress in Dongguan if they have had a pay raise recently, they will either stare at you blankly or just burst out laughing. For all the hype in the Chinese and international media about 30 percent wage inflation and a “famine” of more than one million labourers in the Pearl River Delta, the reality for migrant workers remains the same; low pay, long hours and no job security.

Momentum towards reform of China’s household registration (hukou) system seems to be growing in the build-up to this year’s National People’s Congress (NPC), the country’s annual parliament, which opens at the end of this week. Zhou Yongkang, China’s most senior official in charge of public and state security, wrote in the Communist Party’s theoretical journal Seeking Truth (求是) that there was now an “urgent” need to reform the country’s anachronistic policy of dividing citizens into urban and rural residents, and explore new ways of managing internal migration.

Just a year after laying off millions of factory workers, China is facing an increasingly acute labor shortage. As American workers struggle with near double-digit unemployment, unskilled factory workers here in China’s industrial heartland are being offered signing bonuses. Factory wages have risen as much as 20 percent in recent months.

Life for China's 130 million migrant workers has never been easy. In recent years, however, family life for the ‘liudong renkou' (floating population) was showing signs of improving until the financial crisis.

Following the lead of Jiangsu, which announced a 12 percent increase in the minimum wage this month, several other municipalities have indicated they too will raise the minimum wage this year. The cities of Beijing, Shanghai, Chongqing, Guangzhou and Dongguan have all separately indicated that the time is now right for an increase in the minimum wage, frozen by central government order on 17 November 2008.