China Has Foreign-Worker Problem, Too

Posted by: Bruce Einhorn on August 11, 2010

While the U.S. and India squabble over H-1B and L-1 work visas for employees of Indian outsourcing companies, there’s a debate about foreign workers going on in China, too. Wait - China? The country with the world’s largest population and a bottomless pool of cheap labor? That China? Hard as it might be for Americans to believe, China has a growing illegal alien problem, too. According to Thursday’s South China Morning Post, officials in southern China’s Guangdong province are concerned about undocumented workers from neighboring countries. The SCMP cites the Nanfang Daily, the official newspaper of the Guangdong government, reporting that the province is about to impose new regulations on foreign workers. “With a huge workforce and strict immigration policies, the mainland is still closed to overseas labourers,” the SCMP reporter, Ivan Zhai, writes. However, local companies are looking for foreign workers thanks, in part, to higher costs associated with a new labor law that calls for better pay and benefits for Chinese workers. “More and more manufacturers are likely to employ illegal labourers from Southeast Asian countries such as Vietnam and Cambodia. The reason is they that they will work for less pay and endure worse working conditions.”

For years, Guangdong officials have talked about the need to upgrade the local economy and shift away from reliance on low-wage labor. That’s happening, as companies like Foxconn (which manufactures for Apple and many others) are moving away from Guangdong. Foxconn is hiring as many as 300,000 workers at a new plant in central China. Not everybody can afford to pick up and move, though. For those companies stuck in Guangdong, hiring low-wage foreign workers is an attractive option, whether local officials like it or not.


Reader Comments

Husin O'Bama

August 12, 2010 12:25 AM

Cheap exports from these unregulated factories employing foreign workers are going to cause endless trade disputes.

Strategery

August 12, 2010 12:33 AM

At least China will actually enforce immigration laws, and they won't have to worry about a liberal judge suspending the law. In addition, the existing population of illegal immigrants won't have any political clout. What China and the USA do have in common is multinational corporations that think they are above the law.

swoosh

August 12, 2010 3:51 AM

Looking back at Chinese history, actually it is not a surprise. For centuries, surrounding nations from South East Asia to East Asia and to Middle East had been looking at China for fortune.

Irwin Hahn

August 12, 2010 8:50 AM

Now, THIS is hilarious!

Newbie

August 12, 2010 11:02 AM

1. China has world's fastest ageing population. This is because of its 'success' in implementing the draconian one-child policy.

2. China has highest number of people worldwide killed in mining disasters.

3. China has world's highest numbers children killed by tainted milk.

4. China has the world's highest number of children killed in kindergartens.

5. China has the highest number of people killed in man-made disasters (mulslides, rains, floods, earthquakes). Yes, they are all man-made because of its 'success' in development.

With so many people dying, it does not have enough people hence the shortage of laborers.

Stone

August 12, 2010 12:30 PM

Wow, China acting like true capitalist. Take advantage of someone's disadvantage to make a bigger profit. Of course they we tell you they have to do this in order to stay competitive with the other capitalist that may already be taking advantage or soon will be. Then these same capitalist will say we are creating jobs and why are they taxed so much. The reason they are taxed so much because they have most of the wealth. But they will whine and use their money to make things go their way. Wait and see.

weaver

August 12, 2010 2:40 PM

But they are working hard and saving the economy from the scourge of high paid nationals, they deserve Chinese citizenship.

evil grin

that guy

August 12, 2010 5:36 PM

Just a classic example of the "race to the bottom" of the global labor pool. Companies will do anything to circumvent a country's sovereignty and laws to turn a buck - or yuan.

The only difference is I'll bet in China you don't have to push 1 for Chinese, 2 for Cambodian, 3 for Thai, etc. just to get some customer service.

America is the new third world. My children will have to learn Spanish just to get decent customer service and Chinese just to get a job.

Husin O'Bama

August 12, 2010 10:53 PM

Now the Chinese are producing cheap goods which the rest of the world cannot do without.

It would be better for China to push some of its most labour intensive polluting industry to Cambodia and Vietnam so that the Chinese themselves can also enjoy the even ultra-cheap goods that will be produced.

terry

August 13, 2010 3:28 AM

The root of the phenomenon, I think, is the natural character of capital---existence for profit.

Jerry

August 13, 2010 5:05 AM

I think people should look at this illegal immigration problem in China by a more open point,After all ,China ,especially south China,really facing a lack-of-employee problem,market have need for it, then it comes.

jcage

August 13, 2010 2:00 PM

To Newbie
Feeling self-righteous again our resident Hindu Nationalist

I guess that India is the paradise on Earth according to you! Half of all the world poor are in India and follow this link:
http://www.newkerala.com/news2/fullnews-44.html"India is a major case in point. There are more MPI poor people in eight Indian states alone (421 million in Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh, and West Bengal) than in the 26 poorest African countries combined (410 million)."

jcage

August 13, 2010 2:03 PM

Newbie wrote on
August 12, 2010 11:02 AM
"5. China has the highest number of people killed in man-made disasters (mulslides, rains, floods, earthquakes). Yes, they are all man-made because of its 'success' in development"

I did not know that EArthquake and rain were man made, is this what is being taught in India? I can not believe that the USA outsource all her IT job to India if this Newbie represent the best and brightest that India has to offer!

obsthetimes

August 13, 2010 6:08 PM

Let 20 million north koreans illegally enter the PRC and then bankrupt social services and hold rallies in Beijing.
The USA should learn from China instead of automatically preaching.

Mirada

August 14, 2010 7:17 AM

If the company can not swift the place that workforce is lower salaries, they may think some ways to appeal people for central china, and they are willing to accept lower salaries. But it's a temp solution to the problem.

Daniel Kroc

August 14, 2010 11:32 AM

Cambodia.

The big story is that Cambodia has an illegal immigration problem. What? Cambodia? A nation that recently saw 1/3 of its population murdered?

Yes. Vietnamese have flooded into Cambodia to work and run small businesses.

Why? Because Vietnam is such a repressive place. Vietnamese complain that the government and police take too much - too much corruption.

Vietnamese --> go to Cambodia or Thailand or China.
Cambodians --> go to Thailand or China.
Thais --> SIngapore or M East.
Chinese --> Thailand, Malaysia, M East, Singapore, Japan, Korea, Taiwan -- anywhere pretty much.

Confusing.

But there is a lesson in here somewhere.

Daniel Kroc
www.DanielKroc.com
www.danielkroc.posterous.com

carrie

August 14, 2010 9:16 PM

To Newbie, the absolute highest numbers for chinese disaster do not mean anything!!! coz china has such a large polulation! try the percentage would be more fair!!!

Sn0burd

August 15, 2010 12:20 PM

Maybe they need 'The Great Wall' II ?Here's a win/win...put the foreign workers on the job of building the wall, then boot them out!

Taishan

August 18, 2010 2:40 PM

People are like water, they take the path of least resistance. If it is easier to earn a living in China than in Cambodia, then people will work their way into the country. As the Chinese economy continues to develop, the problem will only get worse. The Chinese people need to be patient and put this in historical perspective. There was a time when 90%+ of the Chinese population wanted to leave the country. Now there are people wanting to get in. And this is a better problem. The illegals may someday include large numbers of Thai, Indians, Pakistani's, Burmese, etc.

Georgie M

August 24, 2010 7:47 PM

Newbie, were you ever good in maths in school?

Did you ever add up the numbers of people killed by your examples? Then ask yourself this simple question. What is the percentage of those killed in your examples in relation to their total population of 1.3 billion? You would find a few zeros after the decimal point.

The real answer is that China has seen dramatic gains in most measures of quality of life in addition to more common economic numbers. Over 500 million Chinese (about double the US population) have been lifted from the poverty line within the last 20 odd years. Foreign investments in China continue to rise and this simply translates to the need for more workers.

Concrete example. Foxconn alone employs in excess of 200,000 workers. Recently in light of the focus on suicides etc they increase the workers' pay rates by 80%. Honda was also forced to double the worker's wages. Where else in the world have you ever seen wages being doubled in a single day?

Factories are now being forced by tight labour market and increasing wages along the coastal belt to move into the central and western provinces. These are all indications of a tight labour market - hence the illegal migrants in Chinese factories.

Silvus

August 29, 2010 8:53 AM

Taishan wrong about the immirgration from India. Remember the chinese fought a backstabbing war years ago. Took nearly a third of India for that matter (but they must have done a better job in improving infrastructure).The chinese simply put are the new world leaders with us, the indians as there sidekicks. Historically India and China were the largest econimies in the world India sometimes first china sometimes first. So like honestly? So like newbie? you have any sources? Those figures don't look anything real. you criticze either china or india I am there (you weren't being critcizied Taishan i was just saying).
And before anyone says that o "if india and china fought a war how in the world will they be allies". Who knows really no guarntee but each has an army of god knows how many lol.That should be an answer...

Jim

September 1, 2010 3:13 PM

The Western countries allowed its corporations to focus only on profit and thus move manufacturing to third world countries. We pretended that we had the brains, they had the brawn. Now we are seeing that they have both. Using the technology we gave them, they are now taking over. All great countries diminish. It is now the turn of the USA, Canada and Europe.

replacement battery

September 5, 2010 11:48 PM

Take advantage of someone's disadvantage to accomplish a bigger profit. Of advance they we acquaint you they accept to do this in adjustment to break aggressive with the added backer that may already be demography advantage or anon will be. Then these aforementioned backer will say we are creating jobs and why are they burdened so much. The acumen they are burdened so abundant because they accept best of the wealth.
www.all-good-battery.com

Observer

September 6, 2010 7:29 AM

Let us put to rest once and for all the misinformation by hate mongering racists posing as decent and humane people on the one child policy in China.

After world war 2, China was desperately short of housing, sewerage, schools, etc. in the cities. The average area of housing per person was probably around as low as 4 square metres. Clean water availability, food production, waste disposal, etc. was in short supply. Superhuman efforts were successful in curbing diseases by bare foot doctors and universal education was introduced to educate the hundreds of millions of people. In such crisis circumstances, the central committee or cabinet (similar to the American congress) debated and approved the one child policy. The majority of the chinese citizens understand and support this prudent policy. What racists deliberately omit is that the policy applies only to the cities and the han majority. Ethnic minorities and rural areas were not subjected to the policy. Note that the so called uighur activist Rebiya Kadeer had 10 children, she is simply a naive traitor paid by foreign propaganda agencies). Forced abortions is a myth perpetuated by racists and if any, the numbers are small and insignificant in China with its large population. It is like saying 1000 prisoners in China means that China is totalitarian. We all know that prison population and executions in America are the highest in the world with disproportionate numbers in blacks and hispanics.

So Newbie, I pity you - so full of hate, so naive or mean to go around spreading misinformation and hatred. May your God forgive you and let you see the light to be a decent person.

Time has proven the wisdom of the chinese leaders and there are serious suggestions now for India to adopt similar policies. One final note is that last year, the more prosperous chinese counties announced grants or gift of money (equivalent to $100,000) to parents whose single child has passed away due to accidents or illness and the parents too old to have another child. This gift is to recognise the sacrifice of the parents and their contribution to the nation - it shows the compassion and decency of the chinese mentality.

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Bloomberg Businessweek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies.

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