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Dongguan joins China's assembly line

By Alex Frew McMillan

vtech line
Dongguan's workers are almost all female, rural and young, saving for a few years before marriage

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DONGGUAN, China (CNN) -- The workers at Dongguan Nokia Mobile Phones Co. understand how China's economic boom works.

At their standard salaries of 1,000 yuan ($120) a month, it would take them an entire two months' wages to buy one of the basic cell phones they produce. They don't get a discount from Nokia.

But they churned out 11.6 million phones last year, half for export and half for sale in China. The employees work 12 hours a day, six days a week if it's busy.

When they're done, they return to the dormitories at the back of the factory where they live, eat and sleep.

Still, Dongguan Nokia has no trouble attracting workers, and it needs plenty. It uses 15 people for an assembly line that one or two employees would run in Europe.

Labor is cheap in China, and there's plenty of supply.

"If we are looking for 100 workers, we post a notice here, and it's easy for us to attract 100 people," general manager C.K. Choi said.

A vast migrant population

The Dongguan operation, which opened in 1995, is one of only two Chinese plants for the Finnish cell-phone company, which also has a plant in Beijing.

nokia
Companies like Nokia are the crown jewel of Dongguan's manufacturing, but most are small and low-end

It's no accident that the factory found its way to Dongguan, a hard-scrabble city in southern Guangdong province, 70 kilometers northwest of Hong Kong.

Dongguan is a product of the new China, open for business and begging to become the world's factory.

It is well on its way. The city has just 1.5 million residents, officially. They are outnumbered three to one by migrant workers from China's hinterland, who boost its total population to 6.5 million.

Many of them work in the 14,000 companies backed by overseas capital in the city. Companies like Nokia are the crown jewels, but most of the operations are small. Just 33 of the Fortune 500 operate here.

Hong Kong and Taiwanese businesses began arriving in the 1980s. Those two places still account for 88 percent of the $16 billion in foreign overseas investment that has come to Dongguan.

Young women in droves

Companies that left Hong Kong and Taiwan in search of cheap workers have found them on the mainland in droves.

v tech workre
Donggaun's workers sent home $1.6 billion last year from their assembly line, typically low-tech jobs

Young women in search of jobs flock to Dongguan from rural China, from provinces such as Guanxi, Hunan and Jiangxi.

The factory workers are overwhelmingly female -- 72 percent of Dongguan's migrants are women -- and young, mostly between 18 and 22.

The majority stay five years and save their wages. Then they move back home to get married. Turnover is high, with 10 percent or more of the work force heading back home each year.

Dongguan's workers sent back 13 billion yuan ($1.6 billion) to their homes in 2001 alone.

"Dongguan contributes much to the growth of all of China," the city's mayor, Li Gui Kang, said.

'They have simple minds'

At SAE Magnetics, which makes hard disks for companies like Toshiba, they perform repetitive assembly line tasks.

"They have simple minds," To Chor Keung, SAE's director of facility planning said. "If they are stable, they just work here, they don't go out to karaoke, bars, and they can work 16, 17 hours a day."

Other theories as to why almost all the assembly workers are women abound -- small hands make them better at fine tasks, they are better at following instructions, they accept the grind of the factory line.

Though Dongguan sells itself as a high-tech destination, much of the manufacturing is low-tech at best. A business park that hypes itself as the Yue Yuen Hi-Tech Optoelectron Estate mainly produces soles for Nike and adidas sneakers.

li
The city's mayor, Li Gui Kang, says the city's push for higher-paying jobs won't come overnight

The park's operators explain optimistically that it is "in transition," as the cluster of Taiwanese companies there moves from plastic shoe parts to greater things.

In fact, even companies that make tech-related products are decidedly low-end with what they do in Dongguan. They make their money from lines of cheap hands performing repetitive tasks.

Li, the mayor, said the city is trying to appeal to companies that make higher value -added goods, to boost the city's wages and living standards. But he is under no illusion it will change overnight.

"There is a saying that the market is in the United States, the orders are from Taiwan and the manufacturing is in Dongguan," he told reporters who visited on a Better Hong Kong Foundation trip. "I think that kind of system will remain for many years."

Dongguan is the scrappier, poorer cousin of nearby Shenzhen, where one of China's earliest experiments with openness has produced the highest production per capita in the country. (Full story)

Half the cost of Mexico

Dongguan VTech Electronic Industries, the local subsidiary of the Hong Kong cordless-phone producer, closed a factory in Mexico and shifted production to China.

With cheap land and labor, the cost of production in Dongguan is half that of Mexico, operations manager Simon Lau explained.

dorms
Workers live in dorms next to their factories, and some companies have amenities like karaoke bars or gyms

That's true even though the United States is its biggest market, and the phones have to be shipped there. It sells no phones in China.

VTech has an on-campus karaoke bar open to midnight every night and sports facilities to keep its employees happy -- and near work if a big order comes in.

Dongguan's employers stress that they provide everything for their workers, sometimes helping them get back home for the annual Chinese New Year break.

It's the new face of "socialism with Chinese characteristics." On the negative side, some employers, particularly those from Taiwan, aren't beyond stretching China's labor laws with seven-day work weeks and 17-hour days.

Still, the jobs are better than the women would find in their home town or on a rural farm. Anise Zhang Yan Yi, a human-resources clerk with VTech, said she and her fellow workers enjoy being right by their jobs and think themselves lucky.

"I like living in the dorm. It has everything," she said.



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