Younger Chinese are spurning factory jobs that power the economy

SHENZHEN, Nov 21 (Reuters) – Growing up in a Chinese village, Julian Zhu saw his father only a few times a year when he returned from his exhausting job at a textile factory in the southern province of Guangdong on vacation.

For his father’s generation, factory work was a way to escape rural poverty. For Zhu and millions of other young Chinese, the low pay, long hours and risk of injury are no longer a sacrifice worth making.

“After a while, it numbs your mind,” said the 32-year-old, who quit production lines a few years ago and now makes a living selling formula and delivering scooters for a supermarket in Shenzhen, a technology hub in southern China. . – I could not stand it again.

The rejection of mill work by Zhu and other Chinese in their 20s and 30s is contributing to a deepening labor shortage that is vexing manufacturers in China, which produces a third of the goods consumed worldwide.

Factory executives say they will produce more and faster, and younger blood will replace their aging workforce. But offering the higher wages and better working conditions that young Chinese want will threaten their competitive advantage.

And smaller manufacturers say big investments in automation technology are either unaffordable or unwarranted when rising inflation and borrowing costs dampen demand in China’s key export markets.

A survey by CIIC Consulting found that more than 80% of Chinese manufacturers faced a labor shortage of hundreds to thousands of workers this year, equivalent to 10% to 30% of their workforce. China’s Ministry of Education predicts a shortage of 30 million manufacturing workers by 2025, more than the population of Australia.

On paper, there is a labor shortage: about 18% of Chinese between the ages of 16 and 24 are unemployed. This year alone, a cohort of 10.8 million graduates entered the job market, which, apart from manufacturing, is very slow. China’s economy, which has been hit by COVID-19 restrictions, a slumping property market and regulatory pressures on technology and other private sectors, is facing its slowest pace in decades.

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Klaus Zenkel, who heads the European Chamber of Commerce in South China, moved to the region nearly two decades ago, when university graduates were less than a tenth of today’s and the economy as a whole was about 15 times smaller in today’s dollars. conditions. He runs a factory in Shenzhen with about 50 workers that builds magnetically shielded rooms used in hospitals for MRI scans and other imaging.

Zenkel said China’s economic growth in recent years has raised the aspirations of younger generations, who now find his line of work more attractive than ever.

“If you’re young, it’s easier to do it, climb ladders, do some mechanical work, handle tools, etc., but most of our installers are in their 50s and 60s,” he said. “Sooner or later we have to hire more young people, but it’s very difficult. Applicants quickly look and say, no, thank you, it’s not for me.”

The National Development and Reform Commission, China’s macroeconomic management agency, and the ministries of education and human resources did not respond to requests for comment.

PRESENT TIME

Manufacturers say they have three main ways to deal with labor market imbalances: sacrificing profit margins to increase wages; invest more in automation; or ride the wave of disengagement sparked by growing competition between China and the West and move to cheaper pastures like Vietnam or India.

But implementing all these options is difficult.

Liu, who runs a factory in the electric battery supply chain, has invested in advanced production equipment with better digital measurements. He said his older workers struggle to hold fast gear or read information on a screen.

Liu, who like other business leaders declined to give his full name to speak freely about China’s economic slowdown, said he tried to lure younger workers with 5 percent higher wages but was given the cold shoulder.

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“It’s like Charlie Chaplin,” Liu said, describing his workers’ activism, referring to a scene from the 1936 film “Modern Times” about the concerns of U.S. industrial workers during the Great Depression. The main character, Little Tramp, played by Chaplin, can’t stand to tighten the bolts on the conveyor belt.

Chinese policymakers have emphasized automation and industrial upgrading as solutions to an aging workforce.

The International Federation of Robotics said the country of 1.4 billion people, which is on the brink of demographic decline, will account for half of its robot installations in 2021, up 44% from a year earlier.

But automation has its limitations.

Dotty, general manager of a stainless steel processing plant in Foshan, has automated product packaging and work surface cleaning, but says a similar fix for other tasks would be too expensive. But young workers are important for the development of production.

“Our products are really heavy and we need people to move them from one processing process to another. It’s labor intensive in hot temperatures and we have a hard time hiring for these processes,” he said.

Brett, manager of a video game controller and keyboard factory in Dongguan, said orders have halved in recent months and many of his peers have moved to Vietnam and Thailand.

He is “just thinking about how to survive from this point on,” adding that he expects to lay off 15 percent of his 200 workers, although he still wanted younger muscle on his assembly lines.

DREAMS OF ADULTERY

The competitiveness of China’s export-oriented manufacturing sector has been shaped over several decades by government-subsidized investment in productive capacity and low labor costs.

Maintaining this status quo now clashes with the aspirations of a generation of educated Chinese for a more comfortable life than the daily sleep-work-sleep-for-tomorrow-food drudgery endured by their parents.

Instead of settling for lower-level jobs, 4.6 million Chinese applied for graduate school this year. This month, state media reported that there were 6,000 applications for every civil service job.

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Many young Chinese are also increasingly adopting a minimalist lifestyle known as “sleeping flat,” working just enough to get by, rejecting China Inc’s rat race.

Economists say market forces could force both young Chinese and manufacturers to limit their ambitions.

“Youth unemployment may have to get much worse before the imbalance is corrected,” said Jiwu Chen, a finance professor at the University of Hong Kong.

By 2025, he said, there may not be much of a labor shortage because demand will certainly decrease.

‘YOU FEEL FREE’

Zhu’s first job was putting fake diamonds into wristwatches. After that, he worked in another factory making tin boxes for fish cakes, a traditional Chinese bakery product.

His co-workers told horror stories of workplace injuries from sharp metal sheets.

Realizing that he could avoid reliving his father’s life, he left.

He now works in sales and delivery, earning at least 10,000 yuan ($1,421.04) a month, depending on how many hours he works. This is almost double what he earns in a factory, although some of the difference goes to accommodation, as many factories have their own dormitories.

“It’s hard work. It’s dangerous on busy roads, in wind and rain, but for young people it’s much better than factories,” Zhu said. “You feel free.”

Xiaojing, 27, is now earning 5 to 6,000 yuan a month as a masseuse in an upscale area of ​​Shenzhen, after three years of working at a printing factory earning 4,000 yuan a month.

“All my friends who are my age have left the factory,” he said, adding that it would be a tall order to get him back.

“If they paid 8,000 before overtime, sure.”

($1 = 7.0371 Chinese Yuan)

Edited by Marius Zacharias and David Crawshaw

Our Standards: The Thomson Reuters Trust Principles.

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