Companies in the Pearl River Delta area, the country's manufacturing powerhouse, are raising wages to attract migrant workers amid fears of a worsening labor shortage, a survey has shown.

The survey was conducted by the service center of Guangzhou human resources markets, which looked at 252 companies with at least 200 employees each.

The poll found out that the average monthly salary offered to new staff was up 13 percent from last year at 1,160 yuan (US$162).

The survey also showed that nearly 70 percent of the companies said they will hire new employees this year, up 20 percent from the same period of last year.

Still, the number of job-hunters has decreased and are said to be more picky, the Guangzhou Daily reported.

The first job fair in Guangzhou after the Spring Festival break on Friday reportedly offered about 7,000 vacancies, but attracted only 4,000 job-seekers.

Figures from the Guangzhou labor authority showed that sectors such as the textile, toy-making, construction, catering, electronics and service industries were top of the list for workers.

It was particularly difficult for the textile and toy-making industries to hire workers since such companies could offer an average monthly salary of just 960 yuan, far below what is available across the board, the labor authority said.

The situation was said to be similar in other cities in the Pearl River Delta region, such as Shenzhen and Dongguan, which has seen industrial restructuring and experienced the impact of the new labor law, researchers said.

However, research by the Asian Footwear Association showed that close to 1,000 shoemaking factories closed or moved out of the Pearl River Delta region last year, with 25 percent setting up in Southeast Asian countries, 50 percent in other mainland cities and about 25 percent adopting a wait-and-see approach.

"The industrial repositioning of the Pearl River Delta region has forced some of the companies in the region, especially those with less competitive edge in the market, to close or move out," Ding Li, a researcher with Guangdong Academy of Social Sciences, said.

"The flow of migrant labor has been a clear indication of that."

The appreciation of the yuan, raw material price hikes and adjustment of export policies have also seen many private firms and companies funded by businesses from Hong Kong, Macao and Taiwan slowing down demand for migrant workers, the Guangdong labor authority said.

(China Daily February 19, 2008)