Not Enough Workers

You'd think that with all the people in China, there'd an endless supply of labor. There's not.

From The New York Times:

GUANGZHOU, China — Just a year after laying off millions of factory workers, China is facing an increasingly acute labor shortage.

As American workers struggle with near double-digit unemployment, unskilled factory workers here in China’s industrial heartland are being offered signing bonuses.

Factory wages have risen as much as 20 percent in recent months.

Telemarketers are turning away potential customers because recruiters have fully booked them to cold-call people and offer them jobs.

Some manufacturers, already weeks behind schedule because they can’t find enough workers, are closing down production lines and considering raising prices. Such increases would most likely drive up the prices American consumers pay for all sorts of Chinese-made goods.

Rising wages could also lead to greater inflation in China. In the past, inflation has sown social unrest.

The immediate cause of the shortage is that millions of migrant workers who traveled home for the long lunar New Year earlier this month are not returning to the coast. Thanks to a half-trillion-dollar government stimulus program, jobs are being created in the interior.

But many economists say the recent global downturn also obscured a longer-term trend: China has drained its once vast reserves of unemployed workers in rural areas and is running out of fresh laborers for its factories.

Read On

It's astounding that there are labor shortage this year whereas last year after the Chinese New Year there were as many as twenty million migrants without work. China's economy is incredibly nimble and fluid.

China's response to the economic crisis has, if nothing else, kept its wheels spinning. Their response is probably creating housing bubbles, over-developing commercial real-estate, and causing a number of other unforeseen issues, but they're at least doing something. I hate to go all Thomas Friedman and espouse the virtues of one-party rule, but China is not experiencing the gridlock that the polarized US is. And during these turbulent economic times, that is worth a lot.

The work shortages highlighted in the article above relate back to the post I made a few days ago. China's economy is no longer so coastal-focused. The opportunities for migrants used to be largely centered in cities like Shenzhen, Guangzhou, Shanghai, and other boom towns along the coast. More and more though, there are increasing opportunities on the interior of the country.

With low-level employees having more power and money, this article states that inflation and higher prices of goods are possible. Whatever the macro-economic hiccups could be, I see migrants having more choice and opportunity in their work as a good thing. The migrants of China perform back-breaking, monotonous labor far, far away from their home towns for very little money. I'm all for them having the chance to make a little more money, have, possibly, better working conditions, and live better lives.

You Are Now Free to Move About the Country

China will begin instituting policy that should help the people on the fringes of society better integrate.

From The Washington Post:

Image taken in 2006 along the 长江 (Yangtze River)

BEIJING -- China will grant young migrant workers more social service benefits and help them rent or buy homes in smaller cities, a government adviser said Tuesday.

For decades, China has restrained migration by linking access to low-cost public services like health care and education to a person's registered place of residence. The system means rural migrants in Shanghai, Beijing and other big cities are deprived many essential benefits and services.

Han Jun, a senior research fellow at the Development Research Center, a think tank that advises China's Cabinet, said a policy paper released last month made it clear that the government is "striving for substantial reform of the household registration system" to allow migrants, especially younger ones, to register in cities.

However, the reform plan aims to get migrants registered in cities and townships close to their home villages - not expensive places like Beijing or Shanghai where migrants flock for construction and service sector jobs.

"A farmer would have to live several lifetimes before he could afford an apartment in Beijing," Han said. "This reform will be mainly focused on moving rural migrants into smaller cities and townships."

Read On

This policy shift should help the swelling of the country's largest urban centers - Shanghai, Beijing, and Guangzhou. These cities are already megalopolises. Cities that large really don't need to get much bigger. I suppose cities can theoretically grow forever, but at some point, 10+ million person cities just become too much to handle.

I see, and I think the China government sees, a great opportunity in the coming years and decades to develop its second-tier and third-tier cities.

Chinese cities are broken down into "tiers." I've heard these tiers referenced many times while in China. I just did a quick Google search to find lists of these tiers, but had a hard time coming up with much (not sure how to search for this in Chinese on Baidu).

I finally found a blogger who's done the research and who has compiled a list of China's tier system though. From the "Eric in Beijing" blog's "Which Tier is Your Chinese City?" post:

First tier
* Beijing
* Guangzhou
* Shanghai
* Xian (what are they smoking?!)

Second tier
* Changchun
* Chengdu
* Chongqing
* Dalian
* Guiyang
* Haikou
* Hangzhou
* Harbin
* Hefei
* Kunming
* Lanzhou
* Nanjing
* Ningbo
* Qingdao
* Sanya
* Shantou
* Shaoxing
* Shenyang
* Shenzhen
* Suzhou
* Taiyuan
* Tianjin
* Urumqi
* Wenzhou
* Wuhan
* Xiamen
* Xian
* Zhuhai

Third tier
None of the articles I looked at listed the third tier cities by name. By process of elimination, if you're in a Chinese city that's not listed as first tier or second tier, then you must be in a third tier city.

Fourth Tier
The sticks.

I agree with Eric that Xi'an is not a first-tier city. It isn't. It's a solid second-tier city.

Do you recognize many of the second-tier cities on that list? Unless you've lived in China or have a vested interest in China, you probably don't. You should get familiar with them though. The development of China's second-tier cities is going nuts and these cities are the ones that are going to really boom in the coming years.

Second-tier and third-tier cities will largely grow by people coming to them from the countryside. Like the rest of the world, very few people want to continue living in rural areas. The pull of cities is just too appealing. Rural Chinese are doing whatever it takes - working in factories, restaurants, and menial jobs - to get to cities.

Providing benefits to migrants leaving the countryside is a huge step in the right direction for China. I understand the reasons why every Chinese person in the countryside couldn't, and shouldn't, leave the countryside at once. The pressure on resources and space and jobs would just be too intense. Conceding that, China's 户口 (hukou) system is brutal and needs to be reformed.

The title of this post - You Are Now Free to Move About the Country - is the tagline for America's Southwest Airlines (what many consider to be the best airline in the States). The Chinese are not completely free to go wherever they want. But they appear to becoming freer. And the freedom to move is a freedom that every person in the world should have.

"Chrome is Huge in China"

Last year, 17 million cars were sold in China and 10 million were sold in the US. This radical shift was not a one-time blip. The epicenter of new car sales has moved to China.

Now, western car companies just have to figure out what Chinese people want to drive.

From Wired Magazine:

Western automakers have started designing cars specifically for the huge Chinese market, and we don’t mean just meeting tighter pollution and fuel-efficiency standards.

The new cars and concepts have exterior contours that comport to Chinese ideas of balance, with interior colors and fabrics designed to signify status and evoke respect. The controls for entertainment and climate systems might even be moving to the back seat, because truly wealthy people don’t drive, they have drivers.

Thirty years ago, the People’s Republic of China was an automotive backwater. Today it’s the biggest market in the world, having just eclipsed the United States. So, its consumers are demanding the best from automotive designers.

The explosive growth of the Chinese market, where consumers bought 17 million new cars last year compared to about 10 million in the United States, has been a bright light in an otherwise dark time for the auto industry. As the traditional markets of North America, Europe and Japan stagnate or decline, automakers have seen their sales in China double and double again.

“This is clearly the market of the future,” says Freidhelm Engler, General Motors director of design in China. “It’s not going to slow down.”

Read On

This is a great article. It nails Chinese people's expectations of cars. Chrome is huge. Harmony in colors is key. And the back seat passenger controls the radio and the sunroof (many car owners have hired drivers driving them around).

Although I wasn't alive in the United States in the 50s and 60s, I'm pretty sure that the car boom during that time is in some way analogous to the car boom going on in China right now. In the 50s, President Eisenhower dreamed of an interstate highway system and built it. Last year, China's leaders stimulated its economy with billions and billions of dollars spent on infrastructure spending. Highways are a big part of that "infrastructure." China, in its own way, is reliving this:



Like Americans a generation or two ago, young Chinese people view car ownership as a status symbol and are proud to drive. Cars have been deprived from most Chinese people for so long that many jump when they have the chance to make the purchase (not to mention that car ownership is an absolute prerequisite for many young urban men hoping to find a suitable bride).

I don't necessarily think that China's decision (it's not just happening, the powers that be have decided to go this route) to make China a car-owning society is a good thing. I believe that I know the drawbacks of car ownership almost as much as anybody.

My hometown of Kansas City has "more miles of limited access highway lanes per capita than any other large metro area in the United States." I don't have international rankings, but considering how developed the United States' interstate highway system is, I feel safe in saying that Kansas City has the most highway lanes per capita of any city on Earth. Interstates 29, 35, and 70 coming together here, indeed, make Kansas City the highway mecca of the world.

What's the consequence? Many Kansas Citians would say our city is "convenient." Here in KC, we don't have many traffic jams. Yes, we can zip around to different parts of the metropolitan area with great ease.

But after having lived abroad and outside of Kansas City for many years, I often wonder why we're so crazy for our cars. Why do we put this "convenience" of zipping around on unsafe highways above living in a more compact land area? And at what cost - both monetarily and culturally - are these highways?

To me, Kansas City's addiction to cars is bordering on disgusting. I'm more and more convinced that being dependent upon cars is a burden rather than a convenience or expression of freedom.

Highlights

On the left hand side of this blog, below the "Labels" section, is a list of links titled "The Best of Mark's China Blog." It has links to some of the accolades this blog has received and to some of the "best" posts made over the past year and a half.

Several friends have told me that my post from last year - Second-hand Smoke, Warmth, and Chatting with the (Soon-to-be) Inlaws - is the best post I've made on this blog. That is the post I made last year to ring in the Chinese new year. Seeing that we just had Chinese new year this year, it's a good read right now.

Qian (aka. Jackie from the article above) and I had a nice Chinese New Year this year. We had my parents over for dumplings on Saturday night. That is how Qian's family spent New Year's in China and I was happy that we were able to continue the tradition here in the States. We missed being in China a lot this past week though.

I hope everyone reading this had a happy Chinese New Year and will have a prosperous Year of the Tiger.

Notes From Xi'an Worth Checking Out

One of my best friends in the world has an excellent China blog going these days.

Richard, a bloke from Newcastle, England who arrived in Xi'an at the same time I did in 2006, has the newest incarnation of his blog/web page really looking good. The site is called Notes From Xi'an. I strongly suggest adding it to your RSS Feed or blog reading list.

Richard is one of the most thoughtful and intelligent people I know. Over my last couple years in Xi'an, we met up one morning each week for coffee buzzes and discussions on China news, the failing Western economies, globalization, philosophy, love, and life (and everything else in between).

He has a particularly good series of articles about his Spring Festival experiences posted right now. Check these out before the most China most special holiday of the year comes this weekend. Richard's writing puts mine to shame.

I'm an NPR Nerd

I feel like I'm starting every post on here these days with, "I heard a really interesting story about China on NPR today on my drive home..." Oh well. America's National Public Radio is the best source of intelligent news around.

Today, Peter HesslerCountry Driving: A Journey Through China From Farm to Factory." In the feature story/interview, Hessler talked about some of the main themes and characters of his soon-to-be released book:

Today, China is the world's largest producer and consumer of automobiles — about a thousand new drivers register each day in Beijing alone.

Back in 2001, just as China's auto boom was beginning, New Yorker writer Peter Hessler decided to join the masses and apply for a driver's license himself. He spent the next seven years driving around China to see how the car was transforming the country.

His new book, Country Driving, details his observations from the road. It begins with his 7,000-mile road trip, following the Great Wall across northern China.

"Along the way, I would stop in villages, and ... it was really sort of sad because so many of these places are losing population to the south," Hessler tells NPR's Melissa Block. "This is basically the story of today's China ... that you have an estimated 140 million people who have left the countryside to work in factory towns, work on construction crews. Often the only people you see are very old people who no longer work, or the children, the youngest people who are still too young to go out and find jobs."

Read On

I'm really looking forward to reading Country Driving. Hessler's first book, River Town, should be required reading for anyone remotely interested in China.

In addition to this good story on Hessler, NPR also had a nice (if not a bit scathing) story on Shanghai and the coming 2010 World Expo. It too is worth a listen.

Chinese Spring Festival Party Tonight

A couple friends, Qian, and I are heading to this Chinese New Year party tonight. I'm not really sure what to expect. From this poster, it looks like it should be a good evening. This is the second annual event and this year's has sold out. So I'm hopeful that the KCCA knows how to put on a good evening.

Gen Y

Qian and I just moved into an apartment on Saturday. We've been really busy preparing for and executing that. Adding my new job into the mix and things have been crazy. It's all good though. I'll happily take hectic over unemployment.

I haven't had internet access for the past several days and haven't really kept up too much with what's going on in the world.

My friend, Taylor, sent me this interesting article on China's "Generation Y" the other day though.

Here are some of the sections from the Business Week article:

Image from gio.gov.tw

Visit a Chinese city today and you would assume that China is Westernizing. Young people sit in Starbucks (SBUX) drinking lattes, texting friends, and playing online games. However, don't be fooled. In China, 240 million young people are certainly modernizing, but they're also holding tight to Chinese values like responsibility for the extended family, adherence to the middle way or harmony, and care of relationships. Despite surface appearances, China's Generation Y is not becoming Western.

...

Gen-Y Chinese have high expectations for their careers and expect to work diligently to achieve these. However, despite their popular image as the "Me Generation," we find that they hold up traditional family values. Asked "what is really important to you," 45% said "family," with "friends" following at 17% and "career" at 12%. Gen Y feels keenly responsible both for their nuclear family and their grandparents, even for aunts and uncles. They feel responsible despite the fact that there is little personal communication; most say they cannot ask about details of family history or discuss personal subjects with their elders.

We also asked young Chinese to choose one wish that would make their life happier. Surprisingly, 82% chose to do something for their parents, most commonly to provide them an easy life.

...

Our research shows that Gen Yers remain deeply Chinese in their values and perceptions. They do not look like their grandparents, but their motivations and priorities are very similar. Chinese Gen Ys modernize, they do not Westernize.

Our research results show that Gen Y is the first group in China to seriously question one of these core values, as they challenge the preeminence of hierarchy. While they take for granted that hierarchy exists, Gen Yers are less willing than earlier generations to accept it. Hence some of the issues that employers raise about their young staff: "How do we get good results from someone who won't do what we say?" "How do we win their loyalty?" "Why don't they trust us?" These difficult questions demonstrate the area in which Gen Yers are least like their parents: unquestioning acceptance of hierarchy and authority.

For many Western China-watchers, it has been a question of when, rather than if, the Chinese young will claim the right to personal freedom in the wake of economic growth. Looking closely at the Chinese Gen Ys makes us wonder whether this assumption makes sense. Chinese Gen Ys want to keep their society built on collective harmony and effective relationship management. At the same time, their refusal to accept authority unquestioningly indicates a new level of critical thinking.

Read On

I agree a lot of what this article has to say. Family remains at the forefront of nearly all young Chinese people's lives.

I'd like to write more about this but only have a few more minutes right now and want to link up to another article I read a few months ago about America's Generation Y. It, too, paints a nice picture of Gen Y's thinking:

Generation Y is fundamentally conservative. Not politically. But in terms of their lifestyle choices and aspirations. This is a generation that loves their parents. Over 65% of college grads move back in with their parents, and they are not particularly unhappy about it because they have a great relationship with their parents. Adults have been helping Gen Y their whole lives. They are used to their parents' friends helping them, their coaches and tutors, and every time there's a problem, a parent talks with an adult involved and fixes it. So Gen Y loves authority—it has always been good for them.

Think about it: Baby boomers protested Vietnam by taking to the streets and violating laws. Gen Y protested Iraq by playing by the rules and electing Obama. Gen X invented grunge music and jeans at work. Gen Y is making the Beatles hip again—and they love to dress up for work. Gen Y is conservative, kind-hearted, and they follow the rules. Of course they are like this: The world has treated them well.

Gen Y just wants what their parents want for them: a good job, a stable family life, and a life that has meaning. Baby boomers told Gen Y that the most important values were contributing to the greater good and always learning. And Gen Y believes that.

So here's what they want at work: Stability. The only reason Gen Y job hops is keep their learning curve high. No one wants to change jobs all the time. It's scary and difficult and tumultuous. But Gen Y knows that there are no lifetime jobs any more, and we're each responsible for our own careers. The best way to keep yourself employable is to always be learning. So when the learning curve flattens out at work, Gen Y jumps.

This is, of course, exactly what their parents told them to do: "Get off the sofa and do your homework! Don't watch TV! You're wasting your mind! The most important thing is your education!" These kids were overprogrammed after school so they would be exposed to new ideas and learn lots of new things. So of course they expect work to be this way as well. And, just like their parents, when things start looking slow, they panic.

Read On

I've been talking with my parents and some other Americans recently about the Baby Boom generation. No one has said it explicitly, but I'm gathering from people in the generation that they've been a failure. The current state of the world, and particularly America, seems to suggest that they have indeed done a very poor job.

I hope that these two Business Week articles have some truth to them. They paint young people as well-balanced with good heads on their shoulders.