The Malaysian Insider

BEIJING, Sept 22 — “Commander” Zhang Quanshou is used to emergencies, but an onslaught of urgent requests from factories in southern Shenzhen has left him shell-shocked.

The 40-year-old, whose many years of experience deploying armies of cheap labour to Chinese factories earned him the nickname “Commander of Migrant Workers”, has been besieged by demands in the past two months to supply thousands of workers overnight.

“Many factories suddenly got new orders, so they are desperate to hire more — even 5,000 or 10,000 workers for each factory are not enough!” he told The Straits Times in a phone interview from Shenzhen, in the exports-dependent coastal province of Guangdong.

Such anecdotal evidence is backed up by official data, with the number of unemployed migrant workers falling to 4.2 million by the end of June from 20 million early this year.

Most of the new jobs were in construction and manufacturing, China’s National Bureau of Statistics said last week.

Once desolated by the global economic crisis which pummelled Western consumer demand and shrank China’s exports, Guangdong’s manufacturers are now hoping that the worst is over.

“We’re getting our first batch of orders for Christmas — much later than usual, but at least it gives us hope,” said Li Qiaoqiao, a production line manager in a Guangdong garment factory, which laid off almost half its workers last year.

Beijing’s swift and overwhelming four trillion yuan (RM2 trillion) stimulus plan has already led to promising signs of a V-shaped recovery in areas such as fixed investment and industrial production.

Stock and property markets have soared as China’s banks went on a lending spree, while foreign investment in China rose for the first time in 11 months with a 7 per cent surge last month.

Little wonder then that China has been hailed as the leading light in the world’s nascent recovery, as it steers a steady course towards its 8 per cent growth target this year, silencing pessimists who said growth may plunge to 5.5 per cent.

But the massive export-oriented manufacturing sector — a key pillar of the Chinese economy — is still a wild card, say analysts. They point out that Western consumer appetite for Chinese goods is unlikely to revive in the foreseeable future and local spenders are still tight-fisted.

Exports, while still at levels a quarter below those of a year ago, perked up in July only to soften again last month.

Still, Zhang thinks the recent spate of Christmas orders “is at least an improvement from the dark times”.

In the first quarter, thousands of laid-off workers came to his Quanshun Human Resource Dispatch Company begging for jobs as Guangdong factories faced a 35 per cent plunge in orders.

The situation was similar in other manufacturing hubs such as Wenzhou — China’s “shoe capital” — in eastern Zhejiang province. Xiao Jinkang, who runs a small shoe factory there, said that until recently, he “was miserable reading about the good news of a recovery”.

“It was all about the big state-owned companies and industries like steel and cement benefiting from the stimulus money and bank loans,” he said.

Then in July, hope dawned as a sudden revival in orders — and an accompanying labour squeeze —surfaced.

Xiao also noted that more orders were coming from domestic companies. “I’m tailoring more designs to suit local tastes now,” he said.

Premier Wen Jiabao this month highlighted efforts to spur domestic spending to rebalance an economy overly reliant on exports, at the World Economic Forum in the northern port city of Dalian.

But Chinese consumers, known for their thrift, are unlikely to change quickly enough to offset the large drop in exports, economists pointed out.

That is why China’s economy may lose steam, warned Professor Xu Xiaonian of the China Europe International Business.

“Eight per cent growth seems easy to get but will soon become a luxury,” he said, adding that China is burdened by under-consumption, government overinvestment and industrial overcapacity.

Finance professor Lin Jiang of Guangdong’s Sun Yat-sen University warned of “a W-shaped recovery”, at least for the southern coastal regions’ export sector.

“After the Christmas season, where will demand for Chinese goods come from?” — The Straits Times