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Manufacturers Plan To Pull Out of PRD Citing High Labor Costs

Posted: 07/22/2014 5:13 pm

factory workers prd chinaDespite building up a reputation as the “cradle of manufacturing” for China, the cost of manufacturing may now be too high for some companies to continue doing business in the Pearl River Delta.

According to a poll done by the Chinese Manufacturers’ Association of Hong Kong, almost a third (29.6%) of all Hong Kong companies intend to withdraw their investments from the Pearl River Delta, reports the SCMP. That is 2.7% more than last year.

Furthermore, 32% of Hong Kong manufacturers already have plans to move their factories to other places in Asia that have lower labor costs, including Southeast Asia, rural areas of Guangdong Province, and other parts of China.

Association chairman Irons Sze said labor costs in the PRD have been increasing some 10 to 15% every year. As well, changing local labor policies are cited as a source of frustration for the companies.

Meanwhile, a policy to replace human labor with robots has been spreading throughout the PRD, a trend that can be seen in Shenzhen, Guangzhou and Dongguan. In many of these cases, the main reason given for the replacement is a lack of an available work force, followed by rising costs.

The lack of workers is cited as the main reason for hukou reform in Guangdong province, encouraging some 11 million migrant workers to come and reside in less populated areas of the province.

Related:

Photo: Compassionate English

Haohao

Dongguan to Accelerate Replacement of Factory Workers with Robots

Posted: 06/27/2014 8:00 am

robot manufacturing The City of Dongguan has passed a resolution that will accelerate the replacement of human labor with robots throughout the city, reports the Dongguan Times.

Called the “Promotion of Dongguan Enterprises to ‘Switch from Human to Machine Labor’ Plan (2014-2016)”, the resolution looks to replace human workers with robots through the implementation of 1,000-1,500 projects in factories throughout the city by 2016.

The resolution targets companies with concentrated labor requirements, or companies that are tech-oriented.

READ: Shenzhen Firm Continues Trend of Replacing Human Labor with Robots

The resolution seeks to open two to three dedicated robot industry parks by 2020, and anywhere from six to eight robot facilities in concentrated neighborhoods. The plan is said to be valued at over RMB 700 million.

While not a law, the resolution strongly urges Dongguan companies to begin adopting technological advancements as part of their production. Companies seem to be responding favorably to the plan. Ninety-two percent of Dongguan factories are in favor of replacing human labor with robots, the report says. Forty-nine percent of Dongguan factories have already cut 10% of their labor, while 20% have cut over 30% of their labor.

READ: Strikes on the Rise as Workers Set to Be Replaced by Robots

The idea of robots replacing human workers is hardly a new phenomenon in the Pearl River Delta. Guangzhou passed a similar resolution which aims to have 80% of all manufacturing production performed by robots by 2020.

A recent rumor that Foxconn plans to hire 100,000 extra workers to accommodate production of the next iPhone has fueled speculation its Shenzhen location will be the site of the record-setting hiring boom. Whether the rumor is true or not, any new recruits at Foxconn will have to contend with the million robots that are set to join the assembly line by the end of this year.

Meanwhile, as Dongguan and other PRD cities look to decrease their labor force, 17 million new residents are expected to settle in rural cities around Guangdong as hukou resident restrictions are relaxed.

Related:

Photo: Dongguan Times

Haohao

Sudden Death Overtime: Dongguan Man Dies After Working 190 Hours of OT

Posted: 04/17/2014 12:58 pm

work to death dongguan overtime factory stress derchun engineer

Your job sucks, but man, you work hard at it. Whether from a culture that views hard work as a virtue or from a work industry that makes unreasonable demands of its employees, the message remains the same: Work will set you free.

If only the cost to freedom was simply diligence.

For a 33 year-old Jiangxi man named Liu working for a company called Derchun Industries in Dongguan, hard work may have prompted a fatal end.

When Liu was found dead in his apartment on April 9,  Liu’s family immediately suspected overwork to be the cause of death. As Guangzhou Daily reports, their suspicions are confirmed by Liu’s paycheck: in the time leading up to his death, Liu had worked a full 31 days in March and accumulated 190 hours of overtime.

RELATED: Shenzhen College Graduate Literally Works Himself to Death

Liu, neither a smoker or drinker, had been dead for three days before he was discovered when he failed to show up at work, something he had never done besides also never having been late. A developmental engineer, Liu was described as a model worker at the factory and if you ever wanted to know how that is defined at Derchun Industries, this was Liu’s typical work day:

  • work 8am-12pm
  • half hour off for lunch
  • work 12:30-5:30pm
  • have dinner for half an hour
  • work 6-9:30pm

 

Yes, that’s 12 hours. Liu would do this every day; he is basically the equivalent of a cable news channel. Since he started working at Derchun in March of last year, Liu has never had a day off from work up until the day he died.

RELATED: 29 Guangdong Cops Died Last Year in Line of Duty,
21 from “Overwork”

A spokesperson for Derchun Industries expressed his condolences and promptly explained all this is what Liu would have wanted:

“This past March, Xiao Liu worked 190 hours of overtime; on this point, the company will not refute. But Xiao Liu had voluntarily worked overtime so as to correspond to factory production requirements. Also, every time Liu would work overtime, he would sign a company form stating that he was doing it voluntarily.”

Of course, this would mean that for the month of March alone, Liu signed 31 overtime request forms, causing suspicion that he may have died of tendinitis.

Even though cultural reforms in China have allowed young people to choose their own romantic interests, a common complaint often heard is “I’m too busy working to go on a date.” If cases like Liu’s are any indication, this would mean that Chinese are less prone to Skillex in nightclubs than dancing with the devil in the pale moonlight.

Photo: Guangzhou Daily

Haohao

Holiday reading: why the iPhone is built in Shenzhen

Posted: 01/26/2012 10:49 am

Between the Spring Festival feasts, visiting flower markets and chowing down on tang yuan, we thought we’d pass an interesting article your way.

The New York Times has recently completed a two-part series on how the US lost out on building the iPhone, some of which are now assembled here in Shenzhen.  The first article goes into detail explaining what Shenzhen can do, and how the US has fallen behind:

An eight-hour drive from that glass factory is a complex, known informally as Foxconn City, where the iPhone is assembled. To Apple executives, Foxconn City was further evidence that China could deliver workers — and diligence — that outpaced their American counterparts.

That’s because nothing like Foxconn City exists in the United States.

The facility has 230,000 employees, many working six days a week, often spending up to 12 hours a day at the plant. Over a quarter of Foxconn’s work force lives in company barracks and many workers earn less than $17 a day. When one Apple executive arrived during a shift change, his car was stuck in a river of employees streaming past. “The scale is unimaginable,” he said.

The entire article is well worth a read.  The second part, which looks at the safety of Foxconn plants in China, is also highly-recommended.

 

 

Haohao

Maybe the air will improve? Shenzhen to move factories

Posted: 11/29/2011 1:41 pm

Maybe more days like this?

Good news for Shenzhen, maybe not so much for people in other towns in Guangdong.

China has announced that it will begin cleaning up the air in Shenzhen (and Beijing, which badly needs it) by moving 10,000 factories over the next five years.  The announcement came at the start of a climate change conference in South Africa.

The Times of India has a few more details:

The shutdown will give the local government 7.5 million square meters of land to develop into high-end industry, state run Xinhua quoted Science, Industry, Trade and Information Technology Commission as saying.

Shenzhen mayor Xu Qin said 4,000 factories will be transferred to an industrial park in the neighbouring city of Shanwei and 5,500 will be shifted to other cities in Guangdong province.

So Shenzhen’s air problem will now become Shanwei’s (I’m sure they’re thrilled).

Even though “closing” factories or improving their efficiency would be better than simply “moving” them, it’s a good first step to clearing the air in what should be one of China’s prettiest southern cities.

Haohao
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