Foreign investment in south China is expected to fall 4.9 percent this year, with firms facing the challenge of labour shortages and rising wages, according to a survey by the region's American business chamber.

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.

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.

A decision by the province that is China’s second-biggest exporter to raise minimum wage rates has heightened expectations that other provinces and cities will soon follow, just as the central government’s attention is shifting from economic stimulus to rising inflation. Eastern Jiangsu province, which exports more than Brazil and South Africa combined, raised its monthly minimum wage rate 13 per cent to Rmb960 ($140) last week. It was the first time the rate had been adjusted in two years.

The Guangzhou federation of trade unions is investigating why a trade union official at a Japanese owned company in the city recommended that a victim of sexual harassment be sacked. The 28 year-old office worker (Ms A) was dismissed in January this year after complaining about the blatant sexual harassment of her Japanese boss, which was caught on camera.

In July 2009, Zhang Haichao voluntarily underwent an operation to open up his chest in order to prove he was suffering from the fatal lung disease pneumoconiosis. Photograph of Zhang by Yanzhou Metropolis Daily

The Supreme People’s Court (SPC) announced on 13 July 2009 that labour disputes in China as a whole climbed by 30 percent in the first half of 2009. Certain areas saw sharper increases, with labour disputes in the first quarter of 2009 shooting up by 41.6 percent in Guangdong, 50.3 percent in Jiangsu, and a staggering 159.6 percent in Zhejiang.

China Labour Bulletin appears in the following article. Copyright remains with the original publisher.

10 July 2009
China’s worst riot in recent history that killed 156 this week in northwest Xinjiang, was sparked by a brawl between disgruntled workers in a toy factory many miles away in the southern export zone.