Young Chinese are giving up the factory jobs that power the economy


SHENZHEN, Nov 21 (Reuters) – Julian Zhu, who grew up in rural China, only saw his father a few times a year when he returned on vacation from his grueling job at a textile factory in southern Guangdong province.

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

“After a while, the job numbs your mind,” said the 32-year-old, who left the production lines a few years ago and now makes money selling milk formula to a supermarket and delivering scooters in Shenzhen, China’s southern tech hub. . “I couldn’t stand the repetitions.”

Zhu and other Chinese in their 20s and 30s are turning away from grinding factory jobs, deepening a labor shortage that has frustrated manufacturers in China, which produces a third of goods consumed globally.

Factory bosses say they will produce more and faster by replacing an aging workforce with younger blood. But offering the higher wages and better working conditions that young Chinese want risks eroding their competitive edge.

Smaller manufacturers say big investments in automation technology are either unaffordable or imprudent when rising inflation and borrowing costs curb demand in China’s key export markets.

A survey by CIIC Consulting found that more than 80% of Chinese manufacturers have experienced labor shortages ranging from hundreds to thousands of workers this year. China’s Ministry of Education predicts a shortage of about 30 million manufacturing workers by 2025, which is larger than the population of Australia.

On paper, there is no labor shortage: about 18% of Chinese aged 16-24 are unemployed. This year alone, a group of 10.8 million graduates entered a very weak job market, along with manufacturing. China’s economy is facing its slowest growth in decades, hit by COVID-19 restrictions, a slumping property market and regulatory pressure on technology and other private industries.

Klaus Zenkel, who chairs 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 numbers and the economy as a whole was about 15 times smaller in current US dollars. conditions. He runs a factory in Shenzhen with about 50 employees that makes magnetically shielded rooms used by hospitals for MRI scans and other procedures.

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

“If you’re young, it’s easier to do the job, climb a ladder, do some machinery, operate 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 will quickly look and say, ‘no thanks, this is 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.

MODERN TIME

Manufacturers say they have three main options to address labor market mismatches: sacrifice profit margins to raise wages; investing more in automation; or jump on the wave of fragmentation created by growing competition between China and the West and move to cheaper pastures like Vietnam or India.

But it is difficult to implement all these options.

Liu, who runs a factory in the electric battery supply chain, has invested in more advanced production equipment with better digital measurements. He said his older workers struggle to keep up with faster machinery or read information on screens.

Like other factory executives, Liu, who declined to give his full name so he could speak freely about China’s economic slowdown, said he tried to lure younger workers with 5% higher wages but was given the cold shoulder.

“It’s like Charlie Chaplin,” Liu said, describing the workers’ performance, referring to a scene in the 1936 film “Modern Times” about the unrest of U.S. industrial workers during the Great Depression. The main character, Chaplin’s Little Tramp, can’t keep pushing 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, on the brink of demographic decline, accounted for half of its robotic installations in 2021, up 44% year-on-year.

But automation has its limits.

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 functions would be too expensive. However, young workers are crucial to sustaining production.

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

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

He said he was “just thinking about how to survive the moment,” and said he expected to lay off 15% of his 200 employees because he wanted to still have young muscle on the assembly lines.

HAPPY DREAMS

The competitiveness of China’s export-oriented manufacturing sector has been built on decades of state-subsidized investment in production capacity and low labor costs.

The preservation of this status quo clashes with the desire of the parents of the now better-educated Chinese generation to live more comfortably than the daily grind of sleep-work-sleep for tomorrow’s food.

This year, 4.6 million Chinese applied to graduate school instead of settling for low-level jobs. According to state media this month, there are 6,000 applications for each civil service position.

Many young Chinese are also increasingly adopting a minimal lifestyle known as “laying low,” doing just enough work and rejecting China Inc’s rat race.

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

“Unemployment for young people may worsen before the mismatch is corrected,” said Zhiwu Chen, a finance professor at the University of Hong Kong.

According to him, by 2025 there may not be much of a labor shortage because “demand will definitely decrease.”

‘You feel FREE’

Zhu’s first job was to screw fake diamonds into wristwatches. After that, he worked in another factory pouring tin cans for mooncakes, a traditional Chinese bakery product.

His colleagues shared horror stories of workplace injuries involving sharp metal sheets.

He quit, realizing that he could avoid reliving his father’s life.

Now involved in sales and delivery, he earns at least 10,000 yuan (US$1,421.04) a month, depending on how many hours he puts in. That’s more than double what he’d earn at the factory, though like many factories, part of the difference comes down to placement. have their own dormitories.

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

Xiaojing, 27, earns 5,000 to 6,000 yuan a month as a masseuse in Shenzhen’s high-end district after three years working at a printer factory where she earned 4,000 yuan a month.

“All my friends my age have left the factory,” he said, adding that bringing it back would be a tall order.

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

($1 = 7.0371 Chinese Yuan Renminbi)

Edited by Marius Zaharia and David Crawshaw

Our standards: Thomson Reuters Trust Principles.



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