'Cheap China' era ends as factory workers wise up

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Story highlights

  • One U.S. middle man in China says "the jobs have left"
  • Chinese workers are demanding better pay, conditions
  • U.S. election campaigns are playing to blue-collar fears
  • Jobs won't return to the U.S., Schwall says, asking "where will they land"
The Chinese factory floor ain't what it used to be. Heavy industry machines now sit idle, where once hundreds of workers would have crammed into Dickensian sweat shops, slaving away for little pay.
China's army of migrant workers are smarter than ever, demanding higher pay and better conditions, armed with tough government labor laws.
Ben Schwall has ridden the wave of China's economic boom and now says the tide is turning.
"When I first came to China you had 200 people outside the factory gate trying to get in," he says. "People would ask favors -- 'can you get my cousin a job?' Now that's gone and I'm asking -- 'do you have a cousin who can come help me?'"
Schwall is an old-style middle man. For two decades he's matched product-hungry Western companies with Chinese manufacturers.
It worked for him, and it worked for the buyer and the supplier. But it also left him branded a traitor: an American helping China steal American jobs.
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It's a catch-cry that's making a comeback in this U.S. election year. Already anti-Chinese television commercials are playing to blue-collar fears.
Schwall says it is nonsense.
"China's not taking these jobs, the jobs have left... the question is where are they landing?" he says.
Yes, it is true those jobs landed in their millions in China, transforming mid-sized towns into booming cities.
China became the world's factory, running up breakneck economic growth.
But Schwall says that was another era. "Cheap China" is finished. Increased costs, he says, are just part of the equation. The nature of work in China is changing; out with the old dirty factory jobs and in with cleaner high-tech industries.
Yang Chunhong is feeling the brunt of these changes. He was once a factory worker himself. Now he is the boss and simply can't find enough staff.
The orders keep coming, he says, but who will fill them?
"The lack of workers will definitely have an impact on my business. We turned down many orders from our clients because we don't have enough workers to make these products. It definitely has a huge impact," he says.
While bosses may struggle, for now at least China's army of migrant workers is reaping the rewards.
Hu Yalan, 23, came here to Guangdong in southern China from her home province two years ago.
Her first job paid her RMB1700 a month, about $300.
Now she wants double that and is scouring Guangdong's busy job market to upgrade.
"I think it's a matter of improving my ability," she says. There are big factories offering "good salary" and "job training," she says.
China is following a path chartered by the United States a generation ago. It is in transition. Old industries will fold as it enters a new era of higher paid, smarter work.
Ironically, President Obama is leading the call for manufacturing to return stateside. It is seen as an answer to America's stubbornly high unemployment.
Old China hands like Ben Schwall say, forget about it.
"The reality is jobs like this are not coming back to the U.S. It may be unpleasant, you may say I'm un-American but it is just the reality of it," he says.
But with an election looming, that's not really a message U.S. politicians are keen to send to disenchanted voters.
In meetings in Washington with China's presumptive President, Xi Jinping, President Obama has continued to raise his concerns about China's economic policies, what he argues is an artificially low currency and unfair export advantage.
China's real challenge is to bridge the gap between the old and new industries, between the low paid and better paid, more demanding workers. If it fails the task, China may soon have its own political slogan: "India is stealing Chinese jobs!"