Insufficient labor supply troubles manufacturers

Manufacturers in China’s Pearl River Delta are having problems finding workers for their factories. Many are turning to automation to deal with the insufficient labor supply, a survey among 1,200 Chinese manufacturers shows.

According to the South China Morning Post, one in four workers in the Pearl River Delta changed jobs over two years. Factory owners are finding it hard to retain their current employees and find new workers. As a result, labor costs tend to rise. The survey was conducted by Wuhan University at factories in Guangdong and Hubei provinces.

The newspaper quotes the survey: “Average monthly wages of Chinese workers reached 4,126 yuan (HK$4,721) in 2015, or US$635, still far behind the US, but almost matching Brazil and significantly higher than other emerging economies such as India and Vietnam.” The survey shows that about 40 per cent of manufacturers in Guangdong and Hubei use automated machines for production. The researchers found that government support, often in the form of tax exemptions and refunds, have become very important for many Chinese factories and exporters grappling with rising costs and sluggish demands.

Further reading on South China Morning Post

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