Nothing can be done to promptly stem Haining's loss of millions of US dollars worth of exports.

The city, China's leather clothing centre in eastern Zhejiang Province, can not meet international orders flowing in because it is suffering an acute shortage of skilled workers.

The city has more than 2,000 leather clothing manufacturing enterprises. But now they are unable to increase their capacity as it is becoming hard to find new, competent staff.

The same dilemma has faced many industries across China, especially in the major economic powerhouses, the Yangtze River Delta and the Pearl River Delta.

These regions, recording the fastest economic growth in the country in recent years, require a huge pool of technicians to sustain their high rate of development.

The eastern Shanghai Municipality, according to local government's estimation, will suffer a shortage of 18,000 technicians in the next three years in the fields of craft designing, machine tool operation, electric equipment and optimization of optical, mechanical and electronic synthesis.

A recent report on the city's job market in the second quarter of this year shows the job/candidate rate is as high as 36:1 for mechanical cold-forming workers and 27:1 for electronic component manufacturers.

While the southern Guangdong Province is in need of 1.8 million medium-level technicians and 1.2 million senior technicians from 2001 to 2005, according to the local government.

Even in Northeast China, the country's old industrial base and once the cradle of skilled workers, the shortage of technicians is severely hindering the region's revitalization process.

Tens of thousands of skilled workers are urgently needed in Shenyang's equipment manufacturing industry, the local labour department said.

"The dearth of skilled workers has had a negative effect on the development of some products, enterprises and industries," said Mo Rong, vice-director of the Institute of Labour Sciences under the Ministry of Labour and Social Security.

Production capacity in some factories can not be fully realized because of the lack of competent workers, he said.

Official statistics show that among the 70 million workers in the nation, senior technicians account for only 3.5 per cent, compared with a 40 per cent ratio in developed countries.

Meanwhile, product quality is also affected by the shortage of qualified workers.

Statistics show only 70 per cent of products in China are up to standard. Almost 200 billion yuan (US$24 billion) is lost every year because of substandard products.

However, "the technician shortage is not so serious as to affect the country's macro economic performance," Mo Rong said.

"It is an inevitable phenomenon during economic development and industrial upgrading," said Du Yang, a researcher from the Institute of Population and Labour Economics of the Chinese Academy of Social Sciences.

Neighbouring countries like South Korea and Japan all experienced periods of technician shortages during their industrial transformations, Du said.

When a country begins to develop its economy, the first step is to engage in labour-intensive industries and then turn to high-tech industries.

During the process, if supply of high-level skilled workers does not keep up with market demand, technician shortages will occur.

China's coastal area has been developing labour-intensive industries for more than 20 years, and it is time for an industrial upgrade.

"Now the scarcity of skilled workers is the signal that indicates China's industry is transforming from labour-intensive to technology-intensive," Du said.

The current issue is how to solve the problem.

"If it is not settled properly, the effect will become more serious," said Mo from the Institute of Labour Sciences.

The hunger for technicians has led to fierce competition for skilled workers.

After the SARS outbreak last year, bosses of private enterprises in Zhili Town, a children's clothing centre in Huzhou City in Zhejiang, waited around the local railway station, competing to offer higher salaries to workers with basic experience who came there to find work, because of the extreme scarcity of textile machine operators.

In Kunshan of southern Jiangsu, an enterprise offered 280,000 yuan (US$33,800) annual to a senior electric welding worker.

In Zhejiang's capital city of Hangzhou, even if some firms promised a monthly salary of 6,000 yuan (US$725) for a digital machine tool operator - which is more than double the average salary in State enterprises, they could hardly find applicants.

In the capital city of Beijing, more than 95 per cent of over 20,000 graduates from the city's vocational schools this year have found jobs, compared with employment difficulties for university graduates and students returning from overseas.

Enterprises have even booked students who will finish their vocational education in 2005 or 2006, according to the city's labour department.

To cope with the problem of serious technician shortages, local governments are planning to import technicians from overseas countries and regions.

For example, Shanghai has announced it will enrol skilled retired technicians from Japan.

And some technician training schools are taking measures to cultivate workers that the market needs.

They have made plans to increase the number of students for majors that are in great market demand.

"Training adjustment in accordance with market demand is the basis for solving the problem, but government support is also important," Mo Rong said.

The Ministry of Labour and Social Security and the State Asset Supervision and Administration Commission of the State Council jointly launched a move in June to cultivate 500,000 senior technicians in three years.

The initiative, at the same time, is expected to promote the development of skilled workers and technicians at junior and medium levels.

Local government has also made similar efforts recently.

The labour department of Yantai government in Shandong Province suggests enterprises set up a post called chief worker and raise payment, as the city's labour resources only meet 40 per cent of its total demand.

The government expects more and more young people to become technicians with improved salary and other benefits.

"With government's macro control and market adjustment, the problem will be eased in three to five years," Mo Rong said.

According to Mo, the situation is growing better. Technician shortage is a problem stemming from most Chinese thinking entering universities was the only way out for their children.

But now more and more people are beginning to realize that someone with a skill will find work easily and vocational schools are becoming popular choices again.

In Beijing, student numbers in vocational schools increased to 21,000 this year from 16,000 in 2000, though the school numbers fell from 141 in 2000 to 46 at present.

However, government policies towards vocational education and training need to be restructured, says Du Yang from the Chinese Academy of Social Sciences.

"It is correct that China pays great attention to elementary and college education."

But, when the shortage of labour resources becomes urgent, the focus of education should be modified in order of importance and urgency.

China's present education system has led to a structural labour shortage, though the number of workers exceeds market demands.

Currently, courses of vocational education in China are mainly arranged by governments, and do not totally comply with market needs.

Meanwhile, investment in vocational education is limited, Du said.

To increase the development of China's vocational education, a major problem is how to invest in the future, he said.

Government should loosen its policy controls, and encourage social or private capital participating in vocational education.

The sector will boom only with sufficient investment.

In addition, the country's current qualification certification system, which goes against the development of vocational education, needs to be replaced by other measures, Du said.

China has set up a national occupational qualification certificate system with five levels: junior, middle, senior, technician and senior technician.

But problems exist.

In Suzhou, as digital machine tool operators are urgently needed, the local government plans to recruit 50 people, training them to obtain senior technician qualifications as digital machine tool operators.

Applying for senior technician qualification, one must first achieve a certificate as senior skilled worker.

Regretfully, in Suzhou, no one had such a certificate.

(China Daily 08/11/2004 page11)