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Bob Moon: I was buying an electronic gizmo online last night, when an alert popped up that the New Year observance in China would delay the arrival of my order. Today marks the start of a new lunar calendar — and the most important holiday in China. It’s a time when the cogs in China’s massive economic machine stop turning and take a break. But for those doing business there, it’s a stressful time.
Marketplace China correspondent Rob Schmitz explains why.
Rob Schmitz: At a factory in the Yangtze delta city of Suzhou, a worker in a white lab coat drills the final screw into a microphone. Then she steps up to it.
Worker: Wei, wei, wei…
She performs a sound check, repeating “hello” in Chinese. Factory manager Robert Kong looks over her shoulder. He’s not thinking of hellos. With the New Year’s holiday approaching, he’s wondering which of his workers is about to say “good bye.”
Robert Kong: The big challenge is trying to predict whether people who leave for their hometowns will come back or not. That’s the big question mark.
Kong works for U.S. company Shure Electronics. He says five years ago, he was turning away migrants who wanted to work here. These days, he meets with other factory managers to brainstorm how to prevent workers from quitting.
Kong: For example, you could give a cash reward when people return. Maybe a couple hundred to a thousand dollars when they return.
But it could take more than that.
Geoffrey Crothall: This year is different simply because migrant workers have got much more options.
Geoffrey Crothall is with the workers advocacy group China Labor Bulletin. He says two things are happening: On the one hand, living costs are rising in cities like Suzhou. On the other, economic conditions are improving in the migrants’ hometowns. So companies that manufacture in China are scrambling to replace workers. Most are handing out raises. When that doesn’t cut it, the companies migrate themselves.
Crothall: A lot of them already are thinking about relocating to provinces further inland. And we’re seeing that with Foxconn, which is setting up huge, new manufacturing facilities in Henan and Sichuan, and I think many other companies will follow that.
Foxconn, by the way, assembles iPads and iPhones for Apple. Crothall says it’s no longer a big deal to move your factories away from the big port cities. Over the past five years, China’s built a shiny, new high-speed rail network. That’s freed up space on the old rail lines for freight. So manufacturing further inland is now an affordable option. But some companies are making a bigger move. Last week, leather goods brand Coach announced it would move its factories from China to Vietnam and India.
But American leather goods-maker Artisan is staying put. At its factory here, in the Yangtze delta town of Changshu, hundreds of workers sew zippers onto leather purses. Last year, managers had workers fill out a survey, asking them what it would take to make them happier. Many complained they had to take days off just to buy train tickets when they went home for the New Year holiday, says factory manager Yu Jie.
Yu Jie: Our workers spent a long time waiting line to get tickets. It wasn’t good for them, and it wasn’t good for us, either. It reduced our output. Now the managers travel to Shanghai and stand in line and buy the tickets for them. Everyone seems happier.
They may seem happier, but when I ask manager Yu if I can talk with his workers, he gives me a firm “no.” The company may be willing to get workers train tickets and explore ways to make them happier, but letting them talk to a journalist is a step too far, for now.
In Shanghai, I’m Rob Schmitz for Marketplace.
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