Dongguan, once the heart of China's manufacturing industry, is now facing a critical turning point in its labor market. This shift, known as the "Lewis Turning Point," marks the transition from an abundance of surplus labor to a labor shortage. As rural workers move from agriculture to industry, the supply of cheap labor has dwindled, leading to a fundamental change in the dynamics of the workforce. On February 16, the city was shrouded in mist, and the streets were eerily quiet. Despite the approaching Lantern Festival, many factory towns remained deserted. Canteens and fast food shops stood empty, and the once-bustling roads were nearly devoid of people. Recruiters, once eager and full of energy, now faced a stark contrast—workers who were no longer interested in the offers being made. The Zhitong Talent Market, one of the largest in Dongguan, had a different atmosphere. Recruitment booths were often left unattended, with few job seekers showing up. At Luming Road in Qingxi Town, where the Hardware Factory once drew crowds, the recruitment ads now failed to attract even a single inquiry. The situation painted a clear picture: the labor market was changing rapidly, and companies were struggling to adapt. According to official data from 2007, Dongguan had over 12 million migrant workers at its peak. Since then, no new figures have been released, but it’s evident that the number has been steadily declining. Many factory owners, like He Jianchen, owner of a clothing factory in Dalang, are pessimistic about the future. “There’s no alternative but to find other outlets,” he said. OEM factories, which rely heavily on low-cost labor, are under immense pressure. Wages have become the central issue in this labor crisis. A young man from Hunan told the reporter, “No one wants a monthly salary below 2,000 yuan.” He Jianchen added, “Wages keep rising, but workers aren’t satisfied, and companies are also unhappy.” This tension is felt across thousands of small and medium-sized enterprises in Dongguan, many of which are now struggling to stay afloat. The minimum wage in Dongguan has increased multiple times since 2005, with the rate of increase accelerating each time. From 770 yuan in 2005 to 920 yuan in 2007, and later reaching 1,100 yuan, these changes reflect the growing pressure on employers. However, many workers remain skeptical about the promises of higher wages. As Liu Quanzhi explained, “Most of the high wages don’t actually reach the workers. They work overtime and still face deductions for food and accommodation.” Despite these challenges, some companies are trying to attract workers with better offers. “Guaranteed salary of 1,150 yuan/month” or “up to 1,800 yuan/month” are common claims, but reality often falls short. Even when wages do rise, many factories compensate by increasing overtime hours or reducing benefits like free meals. Cai Xiaomei, a senior manager at the Zhitong Talent Market, noted that while the minimum wage serves as a baseline, it doesn’t necessarily translate into better pay for most workers. “The real benefit should go to management, R&D, and technology,” she said. “Workers’ wages haven’t really improved.” The economic slowdown in Dongguan mirrors the labor shortage. After decades of rapid growth, the city’s GDP expansion has slowed significantly. In 2007, the labor shortage became more apparent, and the GDP growth rate dropped to its lowest in over 20 years. By 2009, the government set a modest target of 5.3%, and even last year’s 10.3% growth fell short of expectations. As migrant workers leave for better opportunities elsewhere, public infrastructure and services built for a booming population may now be underutilized. Empty factories, abandoned buildings, and quiet townships tell the story of a city in transition. Many factory owners are looking to real estate or relocation as alternatives. With fewer workers and rising costs, the future of Dongguan’s manufacturing sector remains uncertain. But for now, the city continues to adjust, hoping to find a way forward in an evolving landscape.

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