Go West for Cheap Sneakers

The Hong Kong model for Guangdong has run its course. Since 2004, companies in the region of hong kong have had a difficult time filling vacant positions on their factory floors. For twenty years Chinese from the poorer, rural south Chinese provinces had been flocking to Guangdong to work sixteen hours a day for little more than a dollar per diem. Hong Kong and Taiwanese investors reaped great profits from the lower costs of labor, preferential tax treatments for foreign investors, and no- or low-regulation of pollutants. Now, the people from the countryside and small towns in China are able to make more in their hometowns without the stressful environment the foreign investors provided. Despite the provincial government raising the minimum wage to nearly USD100 per month, factories are still struggling to hire enough workers to meet the production quotas they promised international buyers. Rampant pollution, crime and an ever-increasing cost of living are proving a deterrent to potential unskilled labor and to managers.Other cities along China’s east coast are meeting similar challenges, albeit with variation: The Yangtze River Delta also sees a great deal of stress on a dearth of human resources. In the case of Shanghai, Suzhou, Nanjing and Hangzhou, though, the problem is one of high turnover rates because of a lack of skilled labor to meet the high level of foreign direct investment in high-value industries such as fine chemicals, automotive, electronics, R&D, and IT. Rising lease prices for land and factory space, and inflated salaries and costs of living are also forcing domestic and foreign companies from the Delta inland.