South China labour woes worsen on export slump

SHENZHEN, China, Dec 11 - China has witnessed a sharp increase in labour arbitration cases in its southern export hub of Guangdong as exports shrink, state media said on Thursday.

More than 60,000 applications for labour arbitration had been made in the provincial capital of Guangzhou so far this year, around the same number as for the previous two years combined, the China Daily reported, citing the Guangzhou labour and social security bureau.

Thousands of Guangdong factories have folded from a series of blows including falling western demand for China-made goods, rising production costs and the strong yuan currency.

"About 60 percent of the claims are for back pay, with most of the rest being appeals for compensation from people who have been made redundant," Xie Yingjian, the director of the arbitration office of the bureau, was quoted as saying.

"The global economic crisis has led to the closure of many firms, especially labour-intensive ones, and pushed dozens of others to the brink of bankruptcy. Downsizing and layoffs were inevitable."

China announced on Wednesday its exports shrank unexpectedly in November by 2.2 percent on a year earlier as the world's fourth-largest economy became ensnared in the global credit crunch.

Guangdong, which handles around 25 percent of all labour disputes in China each year, has seen rising social tensions from the economic downturn including recent riots by laid-off factory workers and taxi-driver strikes.

"Because the economic crisis is forcing so many businesses to shut production, the government is worried ... I'd say that about 60 to 70 percent of businesses here (in Shenzhen and nearby Dongguan) are in bad shape," said Jian Hui, a freelance labour organiser in Shenzhen and workers' rights advocate.

"Mostly factories have been letting go of only part of their workforce, but the way things look there'll be more and more mass dismissals next year."

In the southern boomtown of Shenzhen, white-collar city workers have also been grappling with grim employment prospects. Ah hom, 28, said he'd spent the past four months in a futile search for work after being laid off from his banking job.

"It very difficult to find a job right now. A lot of my friends have lost work or had their salaries cut," he said outside a teeming job centre in Shenzhen's Luohu district.

"If I don't find work soon, I may return home after the Lunar New Year," said the Hubei native.

Already, large numbers of laid-off factory workers from the province have been heading home at train stations for good.

Many migrant maids are skipping customary year-end visits home rather than risk losing increasingly scarce jobs.

The maids face the twin pressures of falling demand for their services and rising competition as women recently laid off from factory jobs turn to housekeeping work.

"This year has been especially difficult because of long waiting times between jobs," said a woman surnamed Wan who works as a nanny near Beijing's wealthy business district.

China's economy grew 11.9 percent in 2007, its fifth straight year of double-digit growth. But the pace has slowed sharply in recent months and the World Bank is forecasting just 7.5 percent growth in 2009.

This would be below the 8 percent growth benchmark seen as necessary to create enough jobs and guarantee social stability.