Younger Chinese are spurning factory jobs that power the economy

SHENZHEN, Nov 21 (Reuters) – Growing up in a Chinese village, Julian Zhu only saw his father a few times a year when he returned for holidays from his grueling job in a textile mill in southern Guangdong province .

For his father’s generation, factory work was a lifeline from rural poverty. For Zhu, and millions of other younger Chinese, the low pay, long hours of drudgery and the risk of injury are no longer worthwhile sacrifices.

“After a while that job numbs your mind,” says the 32-year-old, who left the production lines a few years ago and now makes a living selling milk formula and making scooter deliveries for a supermarket in Shenzhen, China’s southern technology center to do. . “I couldn’t bear the repetition.”

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

Factory bosses say they will produce more, and faster, with younger blood replacing their aging workforce. But offering the higher wages and better working conditions that younger Chinese want would risk eroding their competitive advantage.

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

More than 80% of Chinese manufacturers have experienced labor shortages this year ranging from hundreds to thousands of workers, equivalent to 10% to 30% of their workforce, a survey by CIIC Consulting showed. China’s Ministry of Education predicts a shortage of nearly 30 million manufacturing workers by 2025, larger than Australia’s population.

On paper, there is no shortage of labor: around 18% of Chinese between the ages of 16-24 are unemployed. This year alone, a cohort of 10.8 million graduates entered a job market that, in addition to manufacturing, has been very subdued. China’s economy, battered by COVID-19 restrictions, a downturn in the real estate market and a regulatory crackdown on technology and other private industries, is facing its slowest growth in decades.

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Klaus Zenkel, who chairs the European Chamber of Commerce in South China, moved to the region about two decades ago, when university graduates were less than one-tenth this year’s numbers and the economy as a whole was about 15 times smaller in present-day U.S. dollar. terms. He runs a factory in Shenzhen with about 50 workers that makes magnetically shielded rooms used by hospitals for MRI screenings and other procedures.

Zenkel said China’s alarming economic growth in recent years has lifted the aspirations of younger generations, who now find his work increasingly unattractive.

“When you’re young, it’s much easier to do this job, climb the ladder, do machinery work, handle tools and so on, but most of our installers are between 50 and 60 years old,” he said. said. “Sooner or later we have to get more young people, but it’s very difficult. Applicants will quickly look and say ‘no thanks, 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.

MODERN TIMES

Manufacturers say they have three main options to tackle the labor market mismatch: sacrifice profit margins to raise wages; invest more in automation; or jump on the decoupling wave caused by the increased rivalry between China and the West and move to cheaper pastures like Vietnam or India.

But all those choices are hard to implement.

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 the faster gear, or read the data on the screens.

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

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“It’s like Charlie Chaplin,” Liu said, describing his workers’ performance, referring to a scene in the 1936 movie “Modern Times,” about the anguish of American industrial workers during the Great Depression. The main character, Little Tramp, played by Chaplin, fails to keep up with the tightening of bolts on a conveyor belt.

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

The country of 1.4 billion people, on the brink of a demographic downturn, accounted for half of robot installations in 2021, an increase of 44% year-on-year, the International Federation of Robotics said.

But automation has its limits.

Dotty, a general manager at a stainless steel treatment factory in the city of Foshan, has automated product packaging and work surface cleaning, but says a similar solution for other functions would be too expensive. Yet young workers are essential to keep production going.

“Our products are really heavy and we need people to transfer them from one processing procedure to the next. It’s labor intensive in hot temperatures and we struggle to hire for these procedures,” she said.

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

He is “just thinking about how to survive this moment,” he said, adding that he expects to lay off 15% of his 200 workers, even as he wants more younger muscle on his assembly lines.

CONFLICTING ASPIRATIONS

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

Preserving that status quo now clashes with the aspirations of a generation of better-educated Chinese for a more comfortable life than the sleep-work-sleep daily grind for tomorrow’s dinner that their parents endured.

Rather than settle for jobs below their education level, a record 4.6 million Chinese applied for postgraduate study this year. There are 6,000 applications for each civil service position, state media reported this month.

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Many young Chinese are also increasingly adopting a minimal lifestyle known as “lay flat”, doing just enough to get by and rejecting the rat race of China Inc.

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

“The unemployment situation for young people may have to be much worse before the mismatch can be corrected,” says Zhiwu Chen, professor of finance at the University of Hong Kong.

By 2025, he said, there may not be much of a worker shortage “as demand will certainly decline.”

‘YOU FEEL FREE’

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

His colleagues shared horror stories about workplace injuries with sharp metal plates.

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

Now doing sales and deliveries, he earns at least 10,000 yuan ($1,421.04) a month, depending on how many hours he puts in. This is almost double what he would earn in a factory, although part of the difference goes on accommodation, as many factories have their own dormitories.

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

Xiaojing, 27, now earns 5,000 to 6,000 yuan a month as a masseuse in an upscale area of ​​Shenzhen after a three-year stint at a printing factory where she made 4,000 yuan a month.

“All my friends who are my age have left the factory,” she said, adding that it would be a tall order to make her return.

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

($1 = 7.0371 Chinese yuan renminbi)

Editing by Marius Zaharia and David Crawshaw

Our Standards: The Thomson Reuters Trust Principles.

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