Dongguan comes to terms with the new economic reality

27 June 2019

Dongguan, the vast Pearl River Delta boomtown that became known as the “factory of the world,” is no longer booming. Factories lie empty and abandoned, shops are boarded up, building sites are silent, cafes and restaurants have hardly any customers. The city has certainly not gone bust but there can be little doubt that, for the time being at least, the good times are over.

In Tangxia, southeastern Dongguan, locals estimate that over the last year one third of the factories have closed down and one third of the township’s estimated half million migrant workers have left. Many migrants stayed in Tangxia over the Lunar New Year in the hope that jobs might open up after the holiday but in the end they packed their bags and went back to their home towns.

The only migrants who returned to Dongguan after the New Year were those who were certain of employment. Even some of those who could find jobs apparently elected to stay behind in their home towns because wages in Dongguan were no longer significantly higher than at home. Moreover, the cost of living in inland provinces was much lower than in Dongguan and by staying at home migrants could make up for lost time with their family after being separated for years on end.

The manager of recruitment centre in central Nancheng district said wages for semi-skilled and experienced workers in particular had fallen dramatically. “Someone earning 3,000 yuan a month last year could expect to get 1,500 yuan this year,” he said. One recruitment advertisement for a nurse offered only 1,400 yuan a month. Unskilled factory workers said their wages had also fallen but not by such a great margin. Assembly line workers could still earn around 1,000 yuan a month, they said. The minimum wage in Dongguan is currently frozen at 770 yuan a month, based on a 40 hour working week, or 7.4 yuan an hour for casual workers.

Today’s migrant workers are very well informed through their extensive text and email networks and clearly understand the vicissitudes of the labour market. They will not waste time and effort looking for work in places where they know there is none. As such there is no vast army of laid-off workers roaming the streets of Dongguan looking for work. Neither do those who have jobs blame the boss for their lower wages and harder conditions. Thanks to exhaustive coverage in the Chinese media, everyone knows about the global economic crisis and they generally accept that times are going to be tough for the foreseeable future. As a rule, protests have only erupted when factories have closed and workers have been laid off with several months’ wages still owing. If they still have a job, most workers seem willing, for the time being at least, to accept pay cuts. However if the salaries offered cannot a provide living wage in Dongguan, and other benefits are cut back, dissatisfaction will obviously begin to rise.

Despite the economic slowdown, many factories, especially those supplying the domestic market, are still doing well and employing large numbers of workers. Several factories in the sprawling electronics district of Liaobu township still have recruitment (zhaopin 招聘) notices posted at their main gates. They specify age and occasionally height requirements and a willingness to work hard. From time to time, small groups of migrants stop to take a look at the notices. They make inquiries about pay and conditions, call their friends on their mobile phones and decide as a group whether or not to apply.

Younger workers generally have a relatively carefree attitude are still picking and choosing which jobs to take up. Older workers, those over 30, and those with families to support are becoming increasingly desperate for work and are willing to accept anything they can get.

Security guards at factories that were hiring said that on average up to one hundred hopefuls turn up each day looking for work, sometimes more, sometimes less. At the recruitment centres, staff said the number people applying for jobs was actually down from last year.

In Tangxia, the new economic reality is exemplified by the gleaming exhibition centre in the township’s newly built administrative district on the outskirts of town, which stands in stark contrast to the dilapidated factories around it. The exhibition hall records the township’s miraculous growth over the last two decades from small town to huge industrial zone containing over 1,200 foreign funded enterprises producing a vast array of manufactured goods and services. All the economic indictors displayed in the exhibition show spectacular year-on-year growth but staff candidly admitted the figures for 2009 and would look very different.

Teachers at one of Tangxia’s adult education institutes were equally pragmatic. The number students enrolling in classes was significantly down, they said, but classes were still going ahead with students particularly keen to improve their English and computer skills. While staff at the township’s luxury Good View Hotel resort said they had not experienced a significant drop in business with many guests from Hong Kong and the mainland still arriving every weekend.

But the people who seemed most relaxed about the economic situation were three teenage workers from Fujian who had traveled by themselves to Guangdong in search of work. One had found a job at an electronic circuit board factory in Huizhou where he had worked for just six days before hoping on a bus to hang out with his friends on the streets of Tangxia. All three teenagers were aware of the difficulty of finding work but said that having fun was more important.

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